PDF - Nordic Nanovector

 Prospectus Nordic Nanovector AS (A private limited company incorporated under the laws of Norway) Offering of up to 2,000,000 Subsequent Offering Shares with Subscription Rights for Eligible Shareholders as of 27 June 2014 at a Subscription Price of NOK 25 per Subsequent Offering Share Managers 28 August 2014 NORDIC NANOVECTOR AS
(A private limited company incorporated under the laws of Norway)
Offering of up to 2,000,000 Subsequent Offering Shares with Subscription Rights for Eligible Shareholders as of 27 June
2014 at a Subscription Price of NOK 25 per Subsequent Offering Share
The information in this prospectus (the “Prospectus”) relates to the subsequent offering (the “Subsequent Offering”) in Nordic Nanovector AS
(the “Company”), a private limited company incorporated under the laws of Norway, of up to 2,000,000 new shares with a nominal value of
NOK 0.20 each (the “Subsequent Offering Shares”) at a subscription price of NOK 25 per Subsequent Offering Share (the “Subscription
Price”) as resolved by the general meeting of the Company held on 27 June 2014.
The shareholders of the Company as of 27 June 2014 (and being registered as such in the Norwegian Central Securities Depository (the “VPS”)
on 2 July 2014 pursuant to the three days’ settlement procedure in VPS (the “Record Date”)), other than shareholders in jurisdictions other than
Norway and where an offer to participate in the share issue is not allowed or would require approval or registration of a prospectus or similar
measures, may subscribe for and be allocated Subsequent Offering Shares in the Subsequent Offering (the “Eligible Shareholders”). The Eligible
Shareholders, other than those shareholders who participated in the Private Placement (as hereinafter defined), will be granted 0.4 nontransferable subscription right (the “Subscription Rights”) for each existing Share registered as held by such Eligible Shareholders as of the
Record Date. Each Subscription Right provides a preferential right to subscribe to and to be allocated one Subsequent Offering Share at the
Subscription Price in the Subsequent Offering. Other investors than Eligible Shareholders may not subscribe for or be allocated Subsequent
Offering Shares in the Subsequent Offering.
If not all Subscription Rights are used, then the remaining Subsequent Offering Shares will be allocated to Eligible Shareholders who oversubscribe or subscribe to Subsequent Offering Shares without the use of Subscription Rights. The allocation of the remaining Subsequent Offering
Shares shall take place on the basis of the shareholding as of 27 June 2014 (as registered as of the Record Date) of those Eligible Shareholders
who subscribe to the remaining Subsequent Offering Shares, but so that Shares allocated to the relevant Eligible Shareholder in the Private
Placement or pursuant to Subscription Rights shall be deemed to be allocated Shares.
The subscription period in the Subsequent Offering will commence on 1 September 2014 and expire at 16:00 hours, Central European Time
(“CET”), on 12 September 2014 (the “Subscription Period”).
Subscription Rights that are not used to subscribe for Subsequent Offering Shares before the expiry of the Subscription Period
will have no value and will lapse without compensation to the holder.
Except where the context requires otherwise, references in this Prospectus to “Shares” will be deemed to include the existing Shares and the
Subsequent Offering Shares. All of the Shares are registered in the VPS and are in book-entry form. All of the Shares rank pari passu with one
another and each carry one vote.
THE SUBSCRIPTION RIGHTS AND SUBSEQUENT OFFERING SHARES, HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
UNITED STATES SECURITES ACT OF 1933, AS AMENDED (THE “US SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES OF AMERICA (THE “UNITED STATES”), AND MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO US PERSONS AS DEFINED IN REGULATIONS EXCEPT TO QUIBS IN
RELIANCE ON AN EXCEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE US SECURITES ACT, OR OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH REGULATION S UNDER THE US SECRURITIES ACT.
THIS PROSPECTUS HAS NOT BEEN APPROVED OR REVIEWED BY THE US SECURITIES AND EXCHANGE COMMISSION AND IS NOT
FOR GENERAL DISTRIBUTION IN THE UNITED STATES. FOR CERTAIN OTHER SELLING AND TRANSFER RESTRICTIONS, SEE
SECTION 15 “SELLING AND TRANSFER RESTRICTIONS”.
The due date for the payment of the Subsequent Offering Shares is expected to be on or about 17 September 2014. Delivery of the Subsequent
Offering Shares is expected to take place on or about 22 September 2014 through the facilities of the VPS.
Investing in the Shares, including the Subsequent Offering Shares involves a high degree of risk. See Section
beginning on page 10 and Section
4 “General Information”.
Managers
ABG Sundal Collier
DNB Markets
The date of this Prospectus is 28 August 2014
2 “Risk Factors”
Nordic Nanovector AS – Prospectus
IMPORTANT INFORMATION
This Prospectus has been prepared in connection with the Subsequent Offering of the Subsequent Offering Shares in the Company.
This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the “Norwegian Securities
Trading Act”) and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of
the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as
implemented in Norway (the “EU Prospectus Directive”). This Prospectus has been prepared solely in the English language. The Financial
Supervisory Authority of Norway (Nw.: Finanstilsynet) (the “Norwegian FSA”) has reviewed and approved this Prospectus in accordance with
Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of
the information included in this Prospectus. The approval by the Norwegian FSA only relates to the information included in accordance with predefined disclosure requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in, or
referred to in, this Prospectus.
For definitions of certain other terms used throughout this Prospectus, see Section 17 “Definitions and Glossary”.
The Company has engaged ABG Sundal Collier Norge ASA (“ABG Sundal Collier”) and DNB Markets, a part of DNB Bank ASA (“DNB Markets”)
as “Managers” for the Subsequent Offering.
The information contained herein is current as of the date hereof and subject to change, completion and amendment without notice. In
accordance with Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the
information included in this Prospectus, which are capable of affecting the assessment by investors of the Subsequent Offering Shares between
the time of approval of this Prospectus by the Norwegian FSA and the expiry of the Subscription Period, will be included in a supplement to this
Prospectus. Neither the publication nor distribution of this Prospectus, nor the sale of any Subsequent Offering Share, shall under any
circumstances imply that there has been no change in the Company’s affairs or that the information herein is correct as of any date subsequent to
the date of this Prospectus.
No person is authorised to give information or to make any representation concerning the Company or in connection with the Subsequent Offering
or the sale of the Subsequent Offering Shares other than as contained in this Prospectus. If any such information is given or made, it must not be
relied upon as having been authorised by the Company or the Managers or by any of the affiliates, representatives, advisors or selling agents of
any of the foregoing.
The distribution of this Prospectus and the offer and sale of the Subsequent Offering Shares in certain jurisdictions may be
restricted by law. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the Subsequent Offering
Shares in any jurisdiction in which such offer or sale would be unlawful. Neither this Prospectus nor any advertisement or any
other offering material may be distributed or published in any jurisdiction except under circumstances that will result in
compliance with applicable laws and regulations. Persons in possession of this Prospectus are required to inform themselves about
and to observe any such restrictions. In addition, the Shares are subject to restrictions on transferability and resale and may not
be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they
may be required to bear the financial risks of this investment for an indefinite period of time. Any failure to comply with these
restrictions may constitute a violation of applicable securities laws. See Section 15 “Selling and Transfer Restrictions”.
This Prospectus and the terms and conditions of the Subsequent Offering as set out herein and any sale and purchase of Subsequent Offering
Shares hereunder shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall
have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Subsequent Offering or this Prospectus.
The Subscription Rights and the Subsequent Offering Shares are being offered only in those jurisdictions in which, and only to those persons to
whom, offers and sales of the Subsequent Offering Shares (pursuant to the exercise of the Subscription Rights or otherwise) may lawfully be
made. The Subscription Rights and the Subsequent Offering Shares have not been, and will not be, registered under the U.S. Securities Act, or
under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities
law of any state or other jurisdiction of the United States. Pursuant to this Prospectus, the Subscription Rights and Subsequent Offering Shares
are being offered and sold outside the United States in reliance on Regulation S. The Subsequent Offering will not be made to persons who are
residents of Australia, Canada, Japan or the United States or in any jurisdiction in which such offering would be unlawful. For more information
regarding restrictions in relation to the Subsequent Offering pursuant to this Prospectus, see Section 15 “Selling and Transfer Restrictions”.
The Company is a private limited company incorporated under the laws of Norway. As a result, the rights of holders of the Company’s Shares will
be governed by Norwegian law and its articles of association (the “Articles of Association”). The rights of shareholders under Norwegian law
may differ from the rights of shareholders of companies incorporated in other jurisdictions. The members of the Company’s board of directors (the
“Board Members” and the “Board of Directors”, respectively) and the members of the Company’s senior management team (the
“Management”) are not residents of the United States, and a substantial portion of the Company’s assets are located outside the United States.
As a result, it may be difficult for investors in the United States to effect service of process on the Company or its Board Members and the
members of the Management in the United States or to enforce in the United States judgments obtained in U.S. courts against the Company or
those persons based on the civil liability provisions of the federal securities laws of the United States or other laws of the United States or any
state thereof. Uncertainty exists as to whether courts in Norway will enforce judgments obtained in other jurisdictions, including the United
States, against the Company or Board Members or members of the Management under the securities laws of those jurisdictions or entertain
actions in Norway against the Company or its directors or officers under the securities laws of other jurisdictions. The United States and Norway
do not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and
commercial matters.
In making an investment decision, prospective investors must rely on their own examination, and analysis of, and enquiry into the
Company and the terms of the Subsequent Offering, including the merits and risks involved. None of the Company or the Managers, or
any of their respective representatives or advisers, is making any representation to any offeree or purchaser of the Subsequent Offering Shares
regarding the legality of an investment in the Subsequent Offering Shares by such offeree or purchaser under the laws applicable to such offeree
or purchaser. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase
of the Subsequent Offering Shares.
All Sections of the Prospectus should be read in context with the information included in Section
4 “General Information”.
Nordic Nanovector AS – Prospectus
TABLE OF CONTENTS
1 SUMMARY ............................................................................................................................................... 2 2 RISK FACTORS ...................................................................................................................................... 10 3 RESPONSIBILITY FOR THE PROSPECTUS ................................................................................................... 18 4 GENERAL INFORMATION ......................................................................................................................... 19 5 REASONS FOR THE SUBSEQUENT OFFERING ............................................................................................. 22 6 DIVIDENDS AND DIVIDEND POLICY ......................................................................................................... 23 7 INDUSTRY AND MARKET OVERVIEW ......................................................................................................... 24 8 BUSINESS OF THE COMPANY ................................................................................................................... 31 9 CAPITALISATION AND INDEBTEDNESS ..................................................................................................... 41 10 SELECTED FINANCIAL AND OTHER INFORMATION...................................................................................... 43 11 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE .................................... 51 12 CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL ............................................................. 60 13 TAXATION ............................................................................................................................................. 68 14 THE COMPLETED PRIVATE PLACEMENT AND THE SUBSEQUENT OFFERING .................................................... 71 15 SELLING AND TRANSFER RESTRICTIONS .................................................................................................. 81 16 ADDITIONAL INFORMATION .................................................................................................................... 86 17 DEFINITIONS AND GLOSSARY ................................................................................................................. 87 APPENDICES
APPENDIX A
ARTICLES OF ASSOCIATION ...................................................................................................
A1
APPENDIX B
FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012 .........................
B1
APPENDIX C
UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2014.......
C1
APPENDIX D
SUBSCRIPTION FORM ............................................................................................................
D1
1
Nordic Nanovector AS – Prospectus
1
SUMMARY
Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections
A – E (A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of
securities and the issuer. Because some Elements are not required to be addressed, there may be gaps in the
numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary
because of the type of securities and issuer, it is possible that no relevant information can be given regarding the
Element. In this case a short description of the Element is included in the summary with the mention of “not
applicable”.
Section A – Introduction and Warnings
A.1
Warning
This summary should be read as introduction to the Prospectus;
any decision to invest in the securities should be based on consideration
of the Prospectus as a whole by the investor;
where a claim relating to the information contained in the Prospectus is
brought before a court, the plaintiff investor might, under the national
legislation of the Member States, have to bear the costs of translating
the Prospectus before the legal proceedings are initiated; and
civil liability attaches only to those persons who have tabled the
summary including any translation thereof, but only if the summary is
misleading, inaccurate or inconsistent when read together with the other
parts of the Prospectus or it does not provide, when read together with
the other parts of the Prospectus, key information in order to aid
investors when considering whether to invest in such securities.
A.2
Warning
Not applicable; no consent is granted by the Company for the use of the
Prospectus for subsequent resale or final placement of the Shares.
Section B - Issuer
B.1
B.2
Legal and commercial name
Nordic Nanovector AS.
Domicile and legal form,
The Company is a private limited company organised and existing under
legislation and country of
the laws of Norway pursuant to the Norwegian Private Limited
incorporation
Companies Act. The Company was incorporated in Norway on 2 July
2009. The Company’s registration number in the Norwegian Register of
Business Enterprises is 994 297 422.
B.3
Current operations,
The Company was established in 2009 by Roy H. Larsen and Inven2 AS
principal activities and
on behalf of co-inventors of BetalutinTM, Øyvind S. Bruland and Jostein
markets
Dahle.
The
Company’s
mission
is
to
develop
innovative
radioimmunotherapeutics that target difficult to treat cancers using the
Company’s proprietary nanovector targeting technology. The Company’s
lead product candidate, Betalutin™, is a radionuclide conjugated to a
tumour seeking carrier/antibody. Betalutin™ aims to prolong and
improve the quality of life of people who suffer from non-Hodgkin
Lymphoma (“NHL”). The product candidate is currently undergoing
phase II of a phase I/II dose-escalating clinical trial for treatment of
relapsed NHL. It has been demonstrated in phase I that BetalutinTM can
be safely administered to patients with NHL. It has also been observed
that BetalutinTM has a clinically relevant effect at all dose levels
administered during phase I. The primary objective in phase II is to
investigate tumour response rate in patients receiving BetalutinTM.
Secondary objectives include confirming the recommended dose of
BetalutinTM,
to
investigate
the
safety
and
toxicity,
to
estimate
progression free survival and to estimate overall survival. See Section 8
“Business
of
the
Company”
for
more
information
regarding
the
Company’s business.
The Company intends to commercialise its product candidates through
strategic
alliances
and
partnerships
with
experienced
oncology
businesses and by establishing its own sales and marketing capabilities
2
Nordic Nanovector AS – Prospectus
in selected markets.
B.4a
Significant recent trends
The Company has not experienced any changes or trends outside the
ordinary course of business that are significant to the Group between
31 December 2013 and the date of this Prospectus, nor is the Group
aware of such changes or trends outside the ordinary course of business
that may or are expected to be significant to the Group for the current
financial year, other than the overall market situation and trends
described elsewhere in this Prospectus.
B.5
Description of the Group
The Company is not part of a group and has therefore no interests in
other companies.
B.6
Interests in the Company
As of 25 August 2014, the Company had 345 shareholders. The table
and voting rights
below shows the Company’s 20 largest shareholders as of 25 August
2014.
Shareholders
Number of Shares
Percent
HealthCap VI L.P. .........................................................................................
3,466,667
Inven2 AS1 ..................................................................................................
1,216,855
15.19%
5.33%
Sciencons AS (Roy Hartvig Larsen)..................................................................
1,162,000
5.09%
Artic Funds PLC ............................................................................................
960,000
4.21%
Storebrand Vekst .........................................................................................
800,000
3.51%
Linux Solutions Norge AS ...............................................................................
730,106
3,20%
Radiumhospitalets Forskningsstiftelse ..............................................................
675,447
2.96%
Roy Hartvig Larsen .......................................................................................
579,949
2.54%
Portia AS .....................................................................................................
500,000
2.19%
Verdipapirfondet Storebrand Optima................................................................
482,000
2.11%
Must Invest AS.............................................................................................
406,800
1.78%
Varak AS .....................................................................................................
347,487
1.52%
Holberg Norge..............................................................................................
333,769
1.46%
OM Holding AS .............................................................................................
310,000
1.36%
Canica AS....................................................................................................
300,000
1.31%
J.P. Morgan Chase bank (nominee) .................................................................
300,000
1.31%
Mininaste AS ................................................................................................
300,000
1.31%
Storebrand Norge .........................................................................................
300,000
1.31%
Spar Kapital Investor AS................................................................................
275,000
1.18%
Jostein Dahle ...............................................................................................
268,358
1,17%
Others2 ........................................................................................................
13,714,438
60.09%
HealthCap VI L.P. .........................................................................................
3,466,667
15.19%
1
Co-founder Jostein Dahle (CSO) has acquired 250,358 shares from Inven2 AS at an average price of approximately NOK 3 per share 14 August
2014, while inventor Øyvind Bruland (member of the nomination committee, clinical advisory board and scientific advisory board of the Company)
is the beneficial owner of and has the right to acquire 125,180 shares from Inven2 at the same price. Inventor of HH1, Steinar Funderud, is the
beneficial owner of and has the right to acquire 39,137 shares from Inven2 at average price of approximately NOK 1.70 per share. Furthermore,
inventor of HH1, Erlend Smeland, is the beneficial owner of and has the right to acquire 39,137 shares from Inven2 at average price of
approximately NOK 1.70 per share.
2
Remaining 328 shareholders.
There are no differences in voting rights between the shareholders.
To the extent known to the Company, there are no persons or entities
that, directly or indirectly, jointly or severally, exercise or could exercise
control over the Company. The Company is not aware of any
arrangements the operation of which may at a subsequent date result in
a change of control of the Company.
B.7
Selected historical key
The
financial information
Company’s audited financial statements as of, and for the year ended,
following
selected
financial
information
is
derived
from
the
31 December 2013, with comparable figures for 2012 (the Financial
Statements), as well as the unaudited interim financial information as of,
and for the three and six months ended, 30 June 2014 and 2013 (the
Interim Financial Statements).
The Financial Statements as of, and for the year ended, 31 December
2013, with comparable figures for 2012 have been prepared in
accordance with IFRS. The Interim Financial Statements have been
prepared in accordance with IAS 34.
3
Nordic Nanovector AS – Prospectus
The selected financial information presented herein should be read in
connection
with
the
Financial
Statements
and
Interim
Financial
Statements (included in Appendix B and Appendix C to the Prospectus).
(In NOK)
Year ended
Three months ended
Six months ended 30 June
30 June
31 December
2013
2014
2013
2014
2013
(unaudited)
(unaudited)
(unaudited)
(unaudited)
2012
Statement of comprehensive
income
Operating revenue ........................
118,143
56,367
236,604
167,879
306,061
148,145
Operating profit (EBIT) .................. (15,714,697)
(3,144,801)
(27,606,260)
(5,328,552)
(18,111,110)
(13,745,405)
Profit/(loss) for the period.............. (15,218,663)
(3,074,658)
(26,566,019)
(5,233,297)
(17,010,937)
(13,449,788)
Statement of financial position
Total non-current assets ................
N/A
N/A
666,840
N/A
380,749
276,460
Total current assets ......................
N/A
N/A
58,529,823
N/A
85,641,960
10,669,189
Total assets .................................
N/A
N/A
59,196,663
N/A
86,022,709
10,975,649
Total equity .................................
N/A
N/A
52,210,215
N/A
78,785,292
7,681,131
Total non-current liabilities.............
N/A
N/A
0
N/A
0
0
Total current liabilities ...................
N/A
N/A
6,986,448
N/A
7,237,417
3,294,518
Total liabilities ..............................
N/A
N/A
6,986,448
N/A
7,237,417
3,294,518
Total equity and liabilities ..............
N/A
N/A
59,196,663
N/A
86,022,709
10,975,649
N/A
N/A
(28,012,439)
(6,834,760)
(14,228,175)
(10,797,879)
N/A
N/A
(444,792)
0
(296,277)
(78,041)
N/A
N/A
535,000
62,245,093
87,423,519
135,000
N/A
N/A
(27,922,231)
55,410,333
72,899,067
(10,740,920)
N/A
N/A
51,646,771
62,080,268
79,569,002
6,669,935
Statement of cash flow
Net cash flows from operating
activities .....................................
Net cash flows from investing
activities .....................................
Net cash flows from financing
activities .....................................
Net change in cash and cash
equivalents ..................................
Cash and cash equivalents at
period end ...................................
The following events have had a significant change to the Company’s financial condition and operating results:
-
In 2012, the Company obtained the regulatory approval to proceed to phase I/II clinical trials in Sweden
and Norway. Furthermore, the first patient was included in the BetalutinTM clinical trial. These events have
been necessary for the further development of the Company’s product candidate BetalutinTM.
-
In 2013, the Company completed a private placement of NOK 60 million.
-
In 2013, HealthCap VI L.P (“HealthCap”) commits to invest NOK 50 million in the Company. The
investment will be made in two tranches, each of NOK 25 million. The first tranche was issued in October
2013 as an interest-free loan that is convertible into 1,666,667 ordinary shares in the Company at a price
per share of NOK 15. HealthCap converted the loan into shares 13 May 2014. The second tranche of
1,666,667 shares will be issued and fully paid before or on 15 October 2014. The issue price per share is
NOK 15 also for the second tranche.
-
In 2014, the Company’s lead product candidate, BetalutinTM had been granted orphan-drug designation for
treatment of follicular lymphoma in the USA and Europe. Such orphan-drug designation will provide the
Company with several advantages, including reduced costs related to the clinical development program, as
well as commercial exclusivity for seven years in the USA and ten years in Europe, once the product
reaches the market.
-
In 2014, BetalutinTM clinical trial advances to phase II.
-
On 24 May 2014, the conversion of a convertible loan in the amount of NOK 25,000,005 was registered in
the Norwegian Register of Business Enterprises.
-
In 2014, BetalutinTM patent was approved in both the US and in Europe.
-
The Company, with assistance from the Managers invited certain existing shareholders as well as certain
4
Nordic Nanovector AS – Prospectus
new institutional and professional investors to participate in a bookbuilding process in the Private
Placement. The bookbuilding period lasted from 6 June 2014 and until 17 June 2014. On the basis of orders
received in the bookbuilding process the Board of Directors allocated 10,000,000 new Shares at a price of
NOK 25 per Share, raising NOK 250 million in gross proceeds, subject to the approval of the general
meeting. The general meeting of the Company approved the Private Placement on 27 June 2014.
B.8
Selected key pro forma
Not applicable. There is no pro forma financial information.
financial information
B.9
Profit forecast or estimate
Not applicable. No profit forecast or estimate is made.
B.10
Audit report qualifications
Not applicable. There are no qualifications in the audit reports.
B.11
Insufficient working capital
Not applicable. The Company is of the opinion that the working capital
available to the Company is sufficient for the Company’s present
requirements, for the period covering at least 12 months from the date
of this Prospectus.
Section C - Securities
C.1
Type and class of securities
The Company has one class of shares in issue, and all shares in that
admitted to trading and
class have equal rights to all such other shares in that class as set out in
identification number
the Company’s Articles of Association. The Shares are registered with
the VPS in book-entry form under ISIN NO 001 0597883.
C.2
Currency of issue
The Shares are issued in NOK.
C.3
Number of shares in issue
As of the date of this Prospectus, the Company’s share capital is
and par value
NOK 4,564,275 divided into 22,821,375 Shares with each Share having
a nominal value of NOK 0.20. All the Shares have been created under
the Norwegian Private Limited Companies Act, and are validly issued and
fully paid.
Provided that the Subsequent Offering will be fully subscribed, the
Company’s share capital will be increased by NOK 400,000 from
NOK 4,564,275
to
a
maximum
of
NOK
4,964,275,
divided
into
24,821,375 Shares by issuing 2,000,000 new Shares, all with a nominal
value of NOK 0.20 per Share, which will give a further increase in the
Company’s total share capital from NOK 4,564,275 to a maximum of
NOK 4,964,275, divided into 24,821,375 Shares.
In addition, as described in the Company’s press release dated 27
September 2013, 1,666,666 shares will no later than 15 October 2014
be issued to HealthCap VI L.P. at a subscription price of NOK 15 in
connection with the private placement completed in September 2013.
The Company’s share capital will be increased by NOK 333,333.20 from
NOK 4,964,275 to NOK 5,297,608.20 divided into 26,488,041 Shares.
C.4
Rights attaching to the
Eligible Shareholders not being allocated shares in the Private Placement
securities
will receive 0.4 non-transferable Subscription Rights for each Share held
as of 27 June 2014 (as registered in VPS on the Record Date). Each
Subscription Right gives a preferential right to subscribe for, and be
allocated, one Subsequent Offering Share. Fractional Subscription Rights
will not be issued, and the number of Subscription Rights issued to those
Eligible Shareholders who would otherwise be entitled to fractions of
Subscription Rights will be rounded down to the nearest whole number.
The Company has one class of Shares in issue, and in accordance with
the Norwegian Private Limited Companies Act, all Shares in that class
provide equal rights in the Company. Each of the Company’s Shares
carries one vote.
C.5
Restrictions on transfer
The Articles of Association do not provide for any restrictions on the
transfer of Shares, or a right of first refusal. Share transfers are not
subject to approval by the Board of Directors.
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Nordic Nanovector AS – Prospectus
C.6
Admission to trading
The Company has not applied for admission to trading of the Shares on
any stock exchange or regulated market. The Company aims for a listing
of the Shares on Oslo Børs or another stock exchange or regulated
market before 31 March 2015.
C.7
Dividend policy
The Company will strive to follow a dividend policy favourable to the
shareholders. The amount of any dividends to be distributed will be
dependent on, inter alia, the Company’s investment requirements and
rate of growth. As of the date of this Prospectus, the Company is in a
development phase and is not in a position to pay any dividends. There
can be no assurance that in any given year a dividend will be proposed
or declared, or if proposed or declared, that the dividend will be as
contemplated by the policy.
The Company has not paid any dividends for the years ended 31
December 2013 and 2012 or previous years.
Section D - Risks
D.1
Key risks specific to the
Risks related to the Company and the industry in which the Company
Company or its industry
operates

The Company is in an early stage of development and the Company’s
clinical studies may not prove to be successful.

The Company has incurred significant operating losses since its
inception. The Company expects to incur losses over the next several
years and may never achieve or maintain profitability.

Obtaining regulatory approvals is required for commercialisation of
the Company’s products.

The financial success of the Company requires obtaining acceptable
price and reimbursement.

The success, competitive position and future revenues will depend in
part on the Company’s ability to protect intellectual property and
know-how.

The Company may not be able to maintain sufficient insurance to
cover all risks related to its operations.

The Company operates in a highly competitive industry.

The Company relies, and will continue to rely, upon third-parties for
clinical trials and manufacturing.

The Company may not be able to develop new product candidates.

The Company may not be able to enter into partner agreements.

The proceeds of the Private Placement are not expected to fund the
Company until a commercial stage has been reached.

The Company faces an inherent business risk of liability claims in the
event that the use or misuse of the compounds results in personal
injury or death.

The Company is reliant on key personnel and the ability to attract
new, qualified personnel.

Most of the Company’s expenses have since inception been related to
research and development and accordingly, the Company has
accumulated substantial net losses and expects such losses to
continue as it continues product and clinical development and with
the aim to obtain regulatory marketing authorisation of products
derived from its technology.

The Company’s results will be exposed to exchange rate risks.

The Company is exposed to commercial risk.

The Company may face competition from low-cost generic products.
6
Nordic Nanovector AS – Prospectus

The Company’s results may be affected by changes in public
sentiment.

The Company’s business involves use of hazardous materials,
chemicals, biological and radioactive compounds and is thus exposed
to environmental risks.
Risks related to laws, regulations and litigation

The Company is exposed to risks related to changes in regulatory
environment.

Even if the Company obtains regulatory approval for a product
candidate, the Company’s products will remain subject to regulatory
scrutiny.

If the Company fails to complete clinical development and clinical
trials, obtain regulatory approval, or successfully commercialize the
Company’s product, the Company’s business would be significantly
harmed.
Risks related to the financing and market risk

In order to execute the Company’s growth strategy, the Company
may require additional capital in the future, which may not be
available.

Future debt levels could limit the Company’s flexibility to obtain
additional financing and pursue other business opportunities.

Interest rate fluctuations could affect the Company’s cash flow and
financial condition in addition to the price of the Shares.

One of the factors that may influence the price of the Shares is its
annual dividend yield as compared to yields on other financial
instruments. Thus, an increase in market interest rates will result in
higher yields on other financial instruments, which could adversely
affect the price of the Shares. The Company may encounter financial
reporting risks.
D.3
Key risks specific to the
Risks related to the Shares
securities

The market value of the Shares may fluctuate significantly, which
could cause investors to lose a significant part of their investment.

The Company’s ability to pay dividends is dependent on the
availability of distributable reserves.

Future sales, or the possibility for future sales, including by existing
shareholders, of substantial number of shares may affect the Shares’
market price.

Future issuances of Shares or other securities may dilute the holdings
of shareholders and could materially affect the price of the Shares.

Pre-emptive rights to secure and pay for Shares in any additional
issuance may not be available to U.S. or other shareholders.

Investors may not be able to exercise their voting rights for Shares
registered in a nominee account.

The Company may be unwilling or unable to pay any dividends in the
future.

Investors may be unable to recover losses in civil proceedings in
jurisdictions other than Norway.

Norwegian law may limit shareholders’ ability to bring an action
against the Company.

The transfer of Shares is subject to restrictions under the securities
laws of the United States and other jurisdictions.

Shareholders outside of Norway are subject to exchange rate risk.
7
Nordic Nanovector AS – Prospectus
Section E - Offer
E.1
Net proceeds and estimated
The transaction costs for the Company related to the Private Placement
expenses
and Subsequent Offering is estimated to be NOK 11 million (including VAT)
based on the assumption that 2,000,000 Subsequent Offering Shares are
applied for and allocated in the Subsequent Offering. Based on the same
assumption, the net proceeds of the Private Placement and Subsequent
Offering will be approximately NOK 289 million out of which NOK 48.7
million is net proceeds from the Subsequent Offering.
E.2a
Reasons for the Offering
The Subsequent Offering is conducted in order to provide the Eligible
and use of proceeds
Shareholders who did not participate in the Private Placement with the
opportunity to subscribe to and be allotted Shares at the same
subscription price as that applied in the Private Placement.
The principal intended use of the net proceeds from the Subsequent
Offering and the Private Placement will be towards the continued
development
of
lead
product
candidate
BetalutinTM
in
non-Hodgkin
Lymphoma, to finance the clinical trials of BetalutinTM phase II and to
expand the number of potential indications for BetalutinTM.
E.3
Terms and conditions of the
The Private Placement:
Offering
The Company, with assistance from the Managers invited certain existing
shareholders as well as certain new institutional and professional investors
to participate in a bookbuilding process in the Private Placement. The
bookbuilding period lasted from 6 June 2014 and until 17 June 2014. On
the basis of orders received in the bookbuilding process the Board of
Directors allocated 10,000,000 new Shares at a price of NOK 25 per
Share, raising NOK 250 million in gross proceeds, subject to the approval
of the general meeting. The general meeting of the Company approved the
Private Placement on 27 June 2014.
The Subsequent Offering:
The Subsequent Offering consists of an offer by the Company to issue up
to 2,000,000 Subsequent Offering Shares at a Subscription Price of NOK
25 per Subsequent Offering Share, being equal to the subscription price in
the Private Placement. Subject to all Subsequent Offering Shares being
issued, the Subsequent Offering will result in NOK 50 million in gross
proceeds to the Company.
Eligible Shareholders, being shareholders of the Company as of 27 June
2014 (and being registered as such in the VPS on the 2 July 2014 pursuant
to the three days’ settlement procedure in VPS) other than shareholders in
jurisdictions other than Norway and where an offer to participate in the
share issue is not allowed or would require approval or registration of a
prospectus or similar measures, may subscribe for and be allocated new
Shares
in
the
Subsequent
Offering.
Other
investors
than
Eligible
Shareholders may not subscribe for or be allocated Shares in the
Subsequent Offering.
The Eligible Shareholders, other than those shareholders who participated
in the Private Placement (as hereinafter defined), will be granted 0.4
Subscription Right for each existing Share registered as held by such
Eligible Shareholders as of the Record Date. Each Subscription Right
provides a preferential right to subscribe to and to be allocated one
Subsequent Offering Share at the Subscription Price. The number of
Subscription Rights issued to each shareholder will be rounded downwards
to the nearest whole number of rights.
If not all Subscription Rights are used, then the remaining Subsequent
Offering Share will be allocated to Eligible Shareholders who oversubscribe or subscribe to Subsequent Offering Shares without the use
Subscription Rights. The allocation of the remaining Subsequent Offering
Share shall take place on the basis of the shareholding as of 27 June 2014
8
Nordic Nanovector AS – Prospectus
(as registered as of the Record Date) of those Eligible Shareholders who
subscribe to the remaining Subsequent Offering Shares, but so that Shares
allocated to the relevant Eligible Shareholder in the Private Placement or
pursuant to Subscription Rights shall be deemed to be allocated Shares.
The Subscription Period will commence on 1 September 2014 and end on
12 September 2014 at 16:00 hours (CET). Subscription Rights which
are not exercised before 12 September at 16:00 hours (CET) will
have no value and will lapse without compensation to the holder.
The completion of the Subsequent Offering Shares is not dependent upon
any conditions.
The Company will announce the definitive amount of the Subsequent Offer
on 15 September 2014 by a press release on the Company’s website.
The payment of the Subsequent Offering Shares allocated to a subscriber
falls due on 17 September 2014. The delivery of the Subsequent Offering
Shares allocated to such subscriber in the Subsequent Offering is expected
to take place on or about 22 September 2014.
E.4
Material and confliction
The Managers or their affiliates have provided from time to time, and may
interests
provide in the future, investment and commercial banking services to the
Company and its affiliates in the ordinary course of business, for which
they may have received and may continue to receive customary fees and
commissions. The Managers do not intend to disclose the extent of any
such investments or transactions otherwise than in accordance with any
legal or regulatory obligation to do so.
Beyond the abovementioned, the Company is not known with any interest
of natural and legal persons involved in the Private Placement or the
Subsequent Offering.
E.5
Selling shareholders and
There are no selling shareholders in connection to the Private Placement or
lock-up agreements
the Subsequent Offering.
Pursuant to the Lock-up Undertaking, each of the members of the Board of
Directors, key employees and Vidar Hansson have given an undertaking
that will restrict its ability to issue, offer, sell or transfer Shares, as
applicable, for a period of six months from 27 June 2014. The Lock-up
Undertaking will not apply to (i) Shares acquired in the Private Placement
or after 27 June 2014, (ii) the sale of Shares to finance the strike price for
share options or the tax triggered by such sale or the exercise of share
options; or (iii) the acceptance of an offer for all shares in the Company.
E.6
Dilution resulting from the
The percentage of immediate dilution resulting from the Private Placement
Offering
for the Company’s shareholders who did not participate in the Private
Placement is approximately 41%.
The percentage of immediate dilution resulting from the Subsequent
Offering, based on an issuance of 2,000,000 Subsequent Offering Shares
under the Subsequent Offering, for the existing shareholders who do not
participate in the Subsequent Offering is approximately 8%.
E.7
Estimated expenses
Not applicable. The expenses related to the Subsequent Offering will be
charged to investor
paid by the Company.
9
Nordic Nanovector AS – Prospectus
2
RISK FACTORS
An investment in the Subsequent Offering Shares involves inherent risk. Before making an investment decision with
respect to the Subsequent Offering Shares, investors should carefully consider the risk factors and all information
contained in this Prospectus, including the financial statements and related notes. The risks and uncertainties
described in this Section 2 are the material known risks and uncertainties faced by the Company as at the date hereof
that the Company believes are relevant to an investment in the Subsequent Offering Shares. An investment in the
Subsequent Offering Shares is suitable only for investors who understand the risks associated with this type of
investment and who can afford to lose all or part of their investment. The absence of negative past experience
associated with a given risk factor does not mean that the risks and uncertainties described are not a genuine potential
threat to an investment in the Subsequent Offering Shares. If any of the following risks were to materialise,
individually or together with other circumstances, they could have a material adverse effect on the Company and/or its
business, financial condition, results of operations, cash flows and/or prospects, which may cause a decline in the
value and trading price of the Subsequent Offering Shares, resulting in the loss of all or part of an investment in the
same.
The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their
potential impact on the Company’s business, financial condition, results of operations, cash flows and/or prospects.
The risks mentioned herein may materialise individually or cumulatively. The information in this Section 2 is as at the
date of this Prospectus.
2.1
Risks related to the Company and the industry in which the Company operates
2.1.1
The Company is in an early stage of development and the Company’s clinical studies may not prove to be
successful
The development of pharmaceuticals involves significant risk, and failure may occur at any stage during development
and after marketing approvals have been received, due to safety or clinical efficacy issues. Drug development involves
moving drug candidates through research and extensive testing of activity and side effects in preclinical models before
authorisation is given for further testing in humans in the clinical stage. The clinical stage is divided into three
consecutive phases (I, II and III) with the aim to elucidate the safety and efficacy of a drug candidate before an
application for marketing authorisation can be filed with the health authorities. Each individual development step is
associated with the risk of failure, hence an early stage drug candidate carries a considerable higher risk of failure than
a later stage candidate. Moreover, the commencement and completion of clinical trials may be delayed by several
factors, including but not limited to unforeseen safety issues, issues related to determination of dose, lack of
effectiveness during clinical trials, slower than expected patient recruiting, inability to monitor patients adequately
during or after treatment, inability or unwillingness of medical investigators to follow the proposed clinical protocols
and termination of licence agreements necessary to complete trials.
2.1.2
The Company has incurred significant operating losses since its inception. The Company expects to incur
losses over the next several years and may never achieve or maintain profitability
Since inception, the Company have incurred significant losses. As of 31 December 2013, the loss of the year was NOK
17,010,937 and for the same period for 2012 the Company’s loss was NOK 13,449,788. To date, the Company has
financed its operations mainly through private placements. The Company has devoted substantially all of the
Company’s financial resources and efforts to research and development, including preclinical studies and, since
December 2012, clinical trials. The Company expects to continue to incur significant expenses and losses over the next
several years. The Company’s net losses may fluctuate from quarter to quarter. To become and remain profitable, the
Company must succeed in developing and eventually commercializing products that generate revenue. This will require
the Company to be successful in a range of challenging activities, including completing preclinical testing and clinical
trials of the Company’s products, discovering additional product candidates, obtaining regulatory approval for these
product candidates and manufacturing, marketing and selling any products for which the Company may obtain
regulatory approval. The Company is only in the preliminary stages of these activities. The Company may never
succeed in these activities and, even if it does, may never generate revenue that is significant enough to achieve
profitability.
2.1.3
Obtaining regulatory approvals is required for commercialisation of the Company’s products
The Company will need approvals from the U.S. Food and Drug Administration (FDA) to market in the US and from the
European Medicines Agency (EMA) to market in Europe, as well as equivalent regulatory authorities in other foreign
jurisdictions to commercialise in those regions. It cannot be assured that the Company will receive such regulatory
approvals necessary to commercialise the final products. Regulatory approvals may be denied, delayed or limited for a
number of reasons, as different regulatory authorities around the world have different requirements for approving
10
Nordic Nanovector AS – Prospectus
pharmaceuticals. The authorities have wide discretion in their drug approval process and may request further testing
before approval or post marketing. Delays in obtaining regulatory approvals may delay commercialisation and the
ability to generate revenues from product candidates, impose extra cost on the Company, diminish competitive
advantages and, after product approval, safety or efficacy issues may emerge during post-marketing surveillance
which may result in withdrawal or restriction of the product approval. The Company’s future earnings are likely to be
largely dependent on the timely approval of BetalutinTM for various indications. No assurances can be given with
respect to obtaining such approvals or the timing thereof.
2.1.4
The financial success of the Company requires obtaining acceptable price and reimbursement
In most markets, drug prices and reimbursement levels are regulated or influenced by authorities, other healthcare
providers, insurance companies or health maintenance organisations. Furthermore, the overall healthcare costs to
society have increased considerably over the last decades and governments all over the world are striving to control
them. There can be no guarantee that the Company’s drugs will obtain the selling prices or reimbursement levels
foreseen by the Company. If actual prices and reimbursement levels granted to the Company’s products happen to be
lower than anticipated it would likely have a negative impact on its products’ profitability and/or marketability.
2.1.5
The success, competitive position and future revenues will depend in part on the Company’s ability to
protect intellectual property and know-how
This will require the Company to obtain and maintain patent protection for its products, methods, processes and other
technologies, to preserve trade secrets, to prevent third parties from infringing on proprietary rights and to operate
without infringing the proprietary rights of third parties. To date, the Company holds certain exclusive patent rights in
major markets, however, the Company cannot predict the degree and range of protection any patents will afford
against competitors and competing technologies, including whether third parties will find ways to invalidate or
otherwise circumvent the patents, if and when additional patents will be issued, whether or not others will obtain
patents claiming aspects similar to those covered by the Company’s patents and patents applications, whether the
Company will need to initiate litigation or administrative proceedings, or whether such litigation or proceedings are
initiated by third parties against the Company which may be costly or whether third parties will claim that the
Company’s technology infringes upon their rights.
2.1.6
The Company may not be able to maintain sufficient insurance to cover all risks related to its operations
The Company’s business is subject to a number of risks and hazards, including, but not limited to industrial accidents,
labour disputes and changes in the regulatory environment. Such occurrences could result in damage to properties,
personal injury, monetary losses and possible legal liability. Although the Company seeks to maintain insurance or
contractual coverage to protect against certain risks in such amounts as it considers reasonable, its insurance may not
over all the potential risks associated with the Company’s operations. Any material risks in respect of which the
Company does not have sufficient insurance coverage may result in a material adverse effect on its financial condition,
operating results and/or cash flows.
2.1.7
The Company operates in a highly competitive industry
The biotechnology and pharmaceutical industries are highly competitive with many large players and subject to rapid
and substantial technological change. Developments by others may render the product candidates or technologies
obsolete or non- competitive. The Company’s drug candidates may not gain the market acceptance required to be
profitable even if they successfully complete initial and final clinical trials and receive approval for sale by the relevant
regulatory authorities. Many of the Company’s competitors and potential competitors have substantially greater capital
resources, research and development resources, regulatory and operational experience, manufacturing and marketing
experience and production facilities. If the Company fails to ultimately commercialise products or product candidates
and/or achieve or maintain profitability, an investment in the Shares could ultimately result in a significant or total loss
of the investment.
2.1.8
The Company relies, and will continue to rely, upon third-parties for clinical trials and manufacturing
The Company cannot be certain that it will be able to enter into satisfactory agreements with third-party suppliers or
manufacturers. The Company’s failure to enter into agreements with such suppliers or manufacturers on reasonable
terms, if at all, could have a material and adverse effect on the business, financial condition and results of operations.
The Company needs to ensure that the manufacturing process complies with applicable regulations and manufacturing
practices as well as the Company’s own high quality standards. Any product/product candidate, however, will require
technically complex manufacturing processes or require a supply of highly specialized raw materials. As a result of
these factors, the production of any product/product candidate may be disrupted from time to time. The Company
may also not be able to rapidly alter production volumes to respond to changes in future commercial sale or demand
11
Nordic Nanovector AS – Prospectus
of a product. Poor manufacturing performance of third party manufacturers, a disruption in the supply or the
Company’s failure to accurately predict the demand for any future commercial sale of a product could have a
significant adverse effect on the Company’s business, financial condition or results of operations. In addition, because
the Company’s products are intended to promote the health of patients, any supply disruption could lead to allegations
that the public health has been endangered and could subject the Company to lawsuits.
2.1.9
The Company may not be able to develop new product candidates
The Company’s future success will depend to a large extent upon the Company’s ability to develop its lead product
candidate BetalutinTM. The Company may not have the ability to invent, explore and develop product candidates that
are of value to the medical market. Furthermore, the Company depends upon independent investigators and
collaborators, such as universities and medical institutions, to do the practical part of the chemical, pharmaceutical,
analytical, preclinical and clinical research and development. These collaborators are not employees of the Company
and the amount or timing of the resources they devote to the programs cannot be fully controlled by the Company.
2.1.10
The Company may not be able to enter into partner agreements
The Company’s business strategy is to commercialise its technology partly through collaborative agreements with
pharmaceutical or biotechnology companies. The Company cannot give any assurance that such agreements will be
obtained on acceptable terms, nor that the Company will be able to enter into any such agreements at all.
Furthermore, should such agreements be executed, there can be no assurance that the agreements are not
terminated by the other party.
2.1.11
The proceeds of the Private Placement are not expected to fund the Company until a commercial stage has
been reached
The Company funds, and will continue to fund, the research and development of the product and product candidates to
the stage where a license agreement can be obtained, profitability is attained or the development is discontinued.
There can be no assurance that the proceeds from the Private Placement will be sufficient for the Company to
complete such research and development of any products or product candidates. Consequently, the Company may
seek to raise capital through equity and debt financings or from other sources, collaborative arrangements or strategic
alliances. However, the Company may prove unable to raise such additional capital on commercially acceptable terms,
if at all. If the Company is unable to generate adequate funds from operations or from additional sources, then the
business, results of operations and financial condition may be materially and adversely affected.
2.1.12
The Company faces an inherent business risk of liability claims in the event that the use or misuse of the
compounds results in personal injury or death
The Company has not experienced any clinical trial liability claims to date, but it may experience such claims in the
future. The Company currently maintains clinical trial liability insurance for each trial in each country. The insurance
policy may not be sufficient to cover claims that may be made against the Company. Clinical trial liability insurance
may not be available in the future on acceptable terms, if at all. Any claims against the Company, regardless of their
merit, could materially and adversely affect its financial condition, because litigation related to these claims would
strain the financial resources in addition to consuming the time and attention of the management.
2.1.13
The Company is reliant on key personnel and the ability to attract new, qualified personnel
The Company is highly dependent upon having a highly qualified senior management and scientific team. The loss of a
key employee might impede the achievement of the scientific development and commercial objectives. Competition for
key personnel with the experience that is required is intense and is expected to continue to increase. There is no
assurance that the Company will be able to retain key personnel, nor can assurances be given that the Company will
be able to recruit new key personnel in the future. In addition, the Company relies on its Board Members, members of
the scientific and clinical advisory boards and consultants to assist it in formulating the research and development
strategy. All of the Board Members, the members of the scientific and clinical advisory boards and all of the
consultants are otherwise employed and each such member or consultant may have commitments to other entities
that may limit their availability to the Company.
2.1.14
Most of the Company’s expenses have since inception been related to research and development and
accordingly, the Company has accumulated substantial net losses and expects such losses to continue as it
continues product and clinical development and with the aim to obtain regulatory marketing authorisation of
products derived from its technology
The Company has not yet generated revenues from the sale of any commercial pharmaceutical products, and does not
expect to generate such revenues for several years. The Company expects to continue to incur substantial operating
12
Nordic Nanovector AS – Prospectus
losses until and if such time as licensing revenues and/or product sales generates sufficient revenues to fund
continuing operations. The Company may never be able to generate any revenues from the sale of any commercial
pharmaceutical products or any further revenues from the licensing of its product candidates or attain profitability. The
Company has never paid dividend to its Shareholders and does not anticipate paying any dividends in the foreseeable
future.
2.1.15
The Company’s results will be exposed to exchange rate risks
The value of non-Norwegian currency denominated revenues and costs will be affected by changes in currency
exchange rates or exchange control regulations. The Company undertakes various transactions in foreign currencies
and is consequently exposed to fluctuations in exchange rates. The exposure arises largely from research expenses.
The
Company
is
mainly
exposed
to
fluctuations
in
euro
(EUR)
and
pounds
sterling
(GBP).
A
10%
strengthening/weakening of NOK against the EUR would have a NOK 303,035 positive/negative impact on the
Company’s profit or loss and equity in 2013. The corresponding amount for 2012 is NOK 16,435. A 10%
strengthening/weakening of NOK against the GBP would have a NOK 31,533 positive/negative impact on the
Company’s profit or loss and equity in 2013. The corresponding amount for 2012 is NOK 7,320.
2.1.16
The Company is exposed to commercial risk
The market for cancer products has to date shown itself to be relatively price insensitive to therapy costs. Healthcare
budgets worldwide are however under severe stress. There is a risk that pricing of the kind experienced to date will
become difficult to achieve. Once approval is obtained for a product there is no certainty that the Company or its
licensees will achieve commercial success since several factors will determine this, including clinical performance of the
product, approved indication, competitive environment, pricing and reimbursement. There is no guarantee that after
regulatory approval reimbursement authorities will agree to cover the cost of the product. Delays in reimbursement or
its denial will limit adoption of the product in the market.
2.1.17
The Company may face competition from low-cost generic products
In the long term the Company expects to face competition from lower-cost generic products. The Company’s product
candidate is or is expected to be protected by patent rights that are expected to provide the Company with exclusive
marketing rights in various countries. However, patent rights are of varying strengths and durations. Loss of market
exclusivity and the introduction of a generic version of the same or a similar medicine typically results in a significant
and sharp reduction in net sales for the relevant product, given that generic manufacturers typically offer their
versions of the same medicine at sharply lower prices. The Company’s results may be affected by changes in public
sentiment.
The pharmaceutical industry is under the close scrutiny of the public, governments and the media. In addition, there is
significant pressure on the industry from certain nations to make the products available to their population at
drastically lower costs. Any increase in such negative public sentiment or increase in public scrutiny or pressure from
such nations could lead, among other things, to changes in legislation, to changes in the demand for the products,
additional pricing pressures with respect to the products, or increased efforts to undercut intellectual property
protections. Such changes could adversely affect the Company’s business, financial condition or results of operations.
2.1.18
The Company’s business involves use of hazardous materials, chemicals, biological and radioactive
compounds and is thus exposed to environmental risks
The Company believes that its safety procedures for handling and disposing of such materials comply with the stateof-art standards, however, there will always be a risk of accidental contamination or injury. By law, radioactive
materials may only be disposed of at certain approved facilities. The Company currently stores some of its radioactive
materials on-site. The Company may incur substantial costs related to the disposal of such materials. If liable for an
accident, or if it suffers an extended facility shutdown, the Company could incur significant costs, damages or penalties
that could have a material adverse effect on its business, financial condition and results of operations.
2.2
Risks related to laws, regulations and litigation
2.2.1
The Company is exposed to risks related to changes in regulatory environment
The Company’s international operations could be affected by changes in intellectual property legal protections and
remedies, trade regulations and procedures and actions affecting approval, production, pricing, reimbursement and
marketing of products, as well as by unstable governments and legal systems and inter-governmental disputes. Any of
these changes could adversely affect the Company’s business.
13
Nordic Nanovector AS – Prospectus
2.2.2
Even if the Company obtains regulatory approval for a product candidate, the Company’s products will
remain subject to regulatory scrutiny
Any product candidate for whom the Company obtains marketing approval, along with the manufacturing processes,
qualification testing, post-approval clinical data, labelling and promotional activities for such product, will be subject to
continual and additional requirements of the FDA and other regulatory authorities. These requirements include
submissions of safety and other post-marketing information, reports, registration and listing requirements, good
manufacturing practices, or GMP requirements relating to quality control, quality assurance and corresponding
maintenance of records and documents, and recordkeeping. Even if marketing approval of a product candidate is
granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to
conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the
safety or efficacy of the product. The FDA and other regulatory authorities closely regulates the post-approval
marketing and promotion of pharmaceutical and biological products to ensure such products are marketed only for the
approved indications and in accordance with the provisions of the approved labelling.
In addition, late discovery of previously unknown problems with the Company’s products, manufacturing processes, or
failure to comply with regulatory requirements, may lead to various adverse results, including, but not limited to,
restrictions on such products, manufacturers or manufacturing processes, requirements to conduct post-marketing
clinical trials, withdrawal of the products from the market, refusal to approve pending applications or supplements to
approve applications that the Company submits and refusals to permit the import or export of the Company’s
products.
The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or
delay regulatory approval of the Company’s product candidates. If the Company is slow or unable to adapt to changes
in existing requirements or the adoption of new requirements or policies, or if the Company is not able to maintain
regulatory compliance, it may lose any marketing approval that it may have obtained, which would adversely affect
the Company’s business, prospects and ability to achieve or sustain profitability.
2.2.3
If the Company fails to complete clinical development and clinical trials, obtain regulatory approval, or
successfully commercialize the Company’s product, the Company’s business would be significantly harmed
The Company has not completed clinical development for its product candidate and will only obtain regulatory approval
to commercialize a product candidate if the Company can demonstrate to the satisfaction of the FDA or comparable
foreign regulatory authorities in well-designed and conducted clinical trials that the product candidate is safe, pure and
potent, or effective, and otherwise meets the appropriate standards required for approval for a particular indication.
Clinical trials are lengthy, complex and extremely expensive processes with uncertain results. A failure of one or more
clinical trials may occur at any stage.
The Company has never obtained marketing approval from the FDA or any comparable foreign regulatory authority for
any product candidate. The Company’s ability to obtain regulatory approval of its product candidates depends on,
among other things, completion of additional preclinical studies and clinical trials, whether the Company’s clinical trials
demonstrate statistically significant efficacy with safety issues that do not potentially outweigh the therapeutic benefit
of the product candidates, and whether the regulatory agencies agree that the data from the Company’s future clinical
trials are sufficient to support approval for any of the Company’s product candidates. The final results of the
Company’s current and future clinical trials may not meet the FDA’s or other regulatory agencies’ requirements to
approve a product candidate for marketing, and the regulatory agencies may otherwise determine that its
manufacturing processes or facilities are insufficient to support approval. The Company may need to conduct more
clinical trials than it currently anticipate. Even if the Company receives FDA or other regulatory agency approval, the
Company may not be successful in commercializing approved product candidates. If any of these events occur the
Company’s business could be materially harmed and the value of the Company’s common stock would likely decline.
2.3
Risks related to financing and market risk
2.3.1
In order to execute the Company’s growth strategy, the Company may require additional capital in the
future, which may not be available
To the extent the Company does not generate sufficient cash from operations, the Company may need to raise
additional funds through debt or additional equity financings to execute the Company’s growth strategy and to fund
capital expenditures. Adequate sources of capital funding may not be available when needed or may not be available
on favourable terms. The Company’s ability to obtain such additional capital or financing will depend in part upon
prevailing market conditions as well as conditions of its business and its operating results, and those factors may
affect its efforts to arrange additional financing on satisfactory terms. If the Company raises additional funds by
issuing additional shares or other equity or equity-linked securities, it may result in a dilution of the holdings of
14
Nordic Nanovector AS – Prospectus
existing shareholders. If funding is insufficient at any time in the future, the Company may be unable to fund
acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could
adversely impact the Company’s results of operations, cash flow and financial condition.
2.3.2
Future debt levels could limit the Company’s flexibility to obtain additional financing and pursue other
business opportunities
The Company may incur additional indebtedness in the future. This level of debt could have important consequences
to the Company, including the following:
•
the Company’s ability to obtain additional financing for working capital, capital expenditures, acquisitions or
other purposes may be impaired or such financing may be unavailable on favourable terms;
•
the Company’s costs of borrowing could increase as it becomes more leveraged;
•
the Company may need to use a substantial portion of its cash from operations to make principal and
interest payments on its debt, reducing the funds that would otherwise be available for operations, future
business opportunities and dividends to its shareholders;
•
the Company’s debt level could make it more vulnerable than its competitors with less debt to competitive
pressures, a downturn in its business or the economy generally; and
•
the Company’s debt level may limit its flexibility in responding to changing business and economic
conditions.
The Company’s ability to service its future debt will depend upon, among other things, its future financial and
operating performance, which will be affected by prevailing economic conditions as well as financial, business,
regulatory and other factors, some of which are beyond its control. If the Company’s operating income is not sufficient
to service its current or future indebtedness, the Company will be forced to take action such as reducing or delaying its
business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing its
debt or seeking additional equity capital. The Company may not be able to affect any of these remedies on satisfactory
terms, or at all.
2.3.3
Interest rate fluctuations could affect the Company’s cash flow and financial condition in addition to the
price of the Shares
The Company is exposed to interest rate risk primarily in relation to its future interest bearing debt issued at floating
interest rates and to variations in interest rates of bank deposits. Consequently, movements in interest rates could
have material adverse effects on the Company’s cash flow and financial condition. The Company tries to minimize the
interest rate risk by depositing funds in a number of financial institutions, and by using fixed interest rate deposits.
2.3.4
One of the factors that may influence the price of the Shares is its annual dividend yield as compared to
yields on other financial instruments. Thus, an increase in market interest rates will result in higher yields
on other financial instruments, which could adversely affect the price of the Shares. The Company may
encounter financial reporting risks.
As part of its responsibility to prevent and detect errors and fraud affecting its financial statements, the Company’s
management has set up specific accounting and reporting procedures in relation to, amongst other things, revenue
recognition process, taxation and other complex accounting issues. Any failure to prevent and detects errors and fraud
within the implementation of such procedures may affect its reputation, business, financial results as well as its ability
to meet its objectives.
2.4
Risks related to the Shares
2.4.1
The market value of the Shares may fluctuate significantly, which could cause investors to lose a significant
part of their investment
An investment in the Shares may decrease in market value as well as increase. The market value of the Shares could
fluctuate significantly in response to a number of factors beyond the Company’s control, including quarterly variations
in operating results, adverse business developments, changes in financial estimates and investment recommendations
or ratings by securities analysts, announcements by the Company or its competitors of new product and service
offerings, significant contracts, acquisitions or strategic relationships, publicity about the Company, its products and
15
Nordic Nanovector AS – Prospectus
services or its competitors, lawsuits against the Company, unforeseen liabilities, changes in management, changes to
the regulatory environment in which it operates or general market conditions.
2.4.2
The Company’s ability to pay dividends is dependent on the availability of distributable reserves
Norwegian law provides that any declaration of dividends must be adopted by the shareholders at the Company’s
general meeting of shareholders (the “General Meeting”). Dividends may only be declared to the extent that the
Company has distributable funds and the Company’s Board of Directors finds such a declaration to be prudent in
consideration of the size, nature, scope and risks associated with the Company’s operations and the need to
strengthen its liquidity and financial position. As the Company’s ability to pay dividends is dependent on the availability
of distributable reserves, it is, among other things, dependent upon receipt of dividends and other distributions of
value from its subsidiaries and companies in which the Company may invest.
As a general rule, the General Meeting may not declare higher dividends than the Board of Directors has proposed or
approved. If, for any reason, the General Meeting does not declare dividends in accordance with the above, a
shareholder will, as a general rule, have no claim in respect of such non-payment, and the Company will, as a general
rule, have no obligation to pay any dividend in respect of the relevant period.
2.4.3
Future sales, or the possibility for future sales, including by existing shareholders, of substantial number of
shares may affect the Shares’ market price
The market price of the Shares could decline as a result of sales of a large number of Shares in the market after the
Offering or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also
might make it more difficult for the Company to sell equity securities in the future at a time and at a price that it
deems appropriate.
The Company cannot predict what effect, if any, future sales of the Shares, or the availability of Shares for future
sales, will have on their market price. Sales of substantial amounts of the Shares in the public market following the
Offering, or the perception that such sales could occur, may adversely affect the market price of the Shares, making it
more difficult for holders to sell their Shares or the Company to sell equity securities in the future at a time and price
that they deem appropriate.
2.4.4
Future issuances of Shares or other securities may dilute the holdings of shareholders and could materially
affect the price of the Shares
It is possible that the Company may in the future decide to offer additional Shares or other equity-based securities
through directed offerings without pre-emptive rights for existing holders. Any such additional offering could reduce
the proportionate ownership and voting interests of holders of Shares, as well as the earnings per Share and the net
asset value per Share.
2.4.5
Pre-emptive rights to secure and pay for Shares in any additional issuance may not be available to U.S. or
other shareholders
Under Norwegian law, unless otherwise resolved at a General Meeting, existing shareholders have pre-emptive rights
to participate on the basis of their existing share ownership in the issuance of any new shares for cash consideration.
Shareholders in the United States, however, may be unable to exercise any such rights to subscribe for new shares
unless a registration statement under the U.S. Securities Act is in effect in respect of such rights and shares or an
exemption from the registration requirements under the U.S. Securities Act is available. Shareholders in other
jurisdictions outside Norway may be similarly affected if the rights and the new shares being offered have not been
registered with, or approved by, the relevant authorities in such jurisdiction. The Company is under no obligation to
file a registration statement under the U.S. Securities Act or seek similar approvals under the laws of any other
jurisdiction outside Norway in respect of any such rights and shares and doing so in the future may be impractical and
costly. To the extent that the Company’s shareholders are not able to exercise their rights to subscribe for new shares,
their proportional interests in the Company will be reduced.
2.4.6
Investors may not be able to exercise their voting rights for Shares registered in a nominee account
Beneficial owners of the Shares that are registered in a nominee account (such as through brokers, dealers or other
third parties) may not be able to vote for such Shares unless their ownership is re-registered in their names with the
VPS prior to the general meetings. The Company can provide no assurances that beneficial owners of the Shares will
receive the notice of a general meeting in time to instruct their nominees to either effect a re-registration of their
Shares or otherwise vote for their Shares in the manner desired by such beneficial owners.
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Nordic Nanovector AS – Prospectus
2.4.7
The Company may be unwilling or unable to pay any dividends in the future
Pursuant to the Company’s dividend policy, dividends are only expected to be paid if certain conditions described in
Section 6.1 “Dividend policy” are fulfilled. In addition, the Company may choose not, or may be unable, to pay
dividends in future years. The amount of dividends paid by the Company, if any, for a given financial period, will
depend on, among other things, the Company’s future operating results, cash flows, financial position, capital
requirements, the sufficiency of its distributable reserves, the ability of the Company’s subsidiaries to pay dividends to
the Company, credit terms, general economic conditions, legal restrictions (as set out in Section 6.2 “Legal constraints
on the distribution of dividends”) and other factors that the Company may deem to be significant from time to time.
2.4.8
Investors may be unable to recover losses in civil proceedings in jurisdictions other than Norway
The Company is a private limited company organised under the laws of Norway. All of the Board Members and the
members of the Management reside in Norway, except from Björn Odlander who resides in Switzerland. As a result, it
may not be possible for investors to effect service of process in other jurisdictions upon such persons or the Company,
to enforce against such persons or the Company judgments obtained in non-Norwegian courts, or to enforce
judgments on such persons or the Company in other jurisdictions.
2.4.9
Norwegian law may limit shareholders’ ability to bring an action against the Company
The rights of holders of the Shares are governed by Norwegian law and by the Articles of Association. These rights
may differ from the rights of shareholders in other jurisdictions. In particular, Norwegian law limits the circumstances
under which shareholders of Norwegian companies may bring derivative actions. For instance, under Norwegian law,
any action brought by the Company in respect of wrongful acts committed against the Company will be prioritised over
actions brought by shareholders claiming compensation in respect of such acts. In addition, it may be difficult to
prevail in a claim against the Company under, or to enforce liabilities predicated upon, securities laws in other
jurisdictions.
2.4.10
The transfer of Shares is subject to restrictions under the securities laws of the United States and other
jurisdictions
The Shares have not been registered under the U.S. Securities Act or any U.S. state securities laws or any other
jurisdiction outside of Norway and are not expected to be registered in the future. As such, the Shares may not be
offered or sold except pursuant to an exemption from the registration requirements of the Securities Act and
applicable securities laws. See Section 15 “Selling and Transfer Restrictions”. In addition, there can be no assurances
that shareholders residing or domiciled in the United States will be able to participate in future capital increases or
rights offerings.
2.4.11
Shareholders outside of Norway are subject to exchange rate risk
The Shares are priced in NOK, and any future payments of dividends on the Shares will be denominated in NOK.
Accordingly, investors outside Norway are subject to adverse movements in the NOK against their local currency, as
the foreign currency equivalent of any dividends paid on the Shares or of the price received in connection with any
sale of the Shares could be materially adversely affected.
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Nordic Nanovector AS – Prospectus
3
RESPONSIBILITY FOR THE PROSPECTUS
This Prospectus has been prepared in connection with the Subsequent Offering described herein.
The Board of Directors of Nordic Nanovector AS accepts responsibility for the information contained in this Prospectus.
The members of the Board of Directors confirm that, having taken all reasonable care to ensure that such is the case,
the information contained in the Prospectus is, to the best of their knowledge, in accordance with the facts and
contains no omission likely to affect its import.
28 August 2014
The Board of Directors of Nordic Nanovector AS
Roy Hartvig Larsen
Jónas Einarsson
Olav Steinnes
Chairman
Board member
Board member
Alexandra Morris
Theresa Comiskey Olsen
Bente-Lill Bjerkelund Romøren
Board member
Board member
Board member
Ludvik Sandnes
Björn Ingemar Odlander
Board member
Board member
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Nordic Nanovector AS – Prospectus
4
GENERAL INFORMATION
4.1
Other important investor information
The Company has furnished the information in this Prospectus. No representation or warranty, express or implied is
made by the Managers as to the accuracy, completeness or verification of the information set forth herein, and nothing
contained in this Prospectus is, or shall be relied upon as, a promise or representation in this respect, whether as to
the past or the future. The Managers assume no responsibility for the accuracy or completeness or the verification of
this Prospectus and accordingly disclaims, to the fullest extent permitted by applicable law, any and all liability
whether arising in tort, contract or otherwise which it might otherwise be found to have in respect of this Prospectus or
any such statement.
Neither the Company nor the Managers, or any of their respective affiliates, representatives, advisers or selling
agents, is making any representation to any offeree or purchaser of the Subsequent Offering Shares regarding the
legality of an investment in the Subsequent Offering Shares. Each investor should consult with his or her own advisors
as to the legal, tax, business, financial and related aspects of a purchase of the Subsequent Offering Shares.
Investing in the Subsequent Offering Shares involves a high degree of risk. See Section 2 “Risk Factors”
beginning on page 10.
4.2
Presentation of financial and other information
4.2.1
Financial information
The Company’s audited financial statements as of, and for the year ended, 31 December 2013, with comparable
figures for 2012, have been prepared in accordance with International Financial Reporting Standards as adopted by
the European Union (“IFRS”) (collectively referred to as the “Financial Statements”). The Company’s unaudited
interim financial information as of and for the three and six months ended 30 June 2014 and 2013 (the “Interim
Financial Information”), have been prepared in accordance with International Accounting Standard (“IAS”) 34. The
Financial Statements and Interim Financial Information are attached hereto as Appendix B and Appendix C,
respectively. The Financial Statements for the years ended 2013 and 2012 have been audited by Ernst & Young AS
(“EY”), as set forth in its report thereon included herein. The Interim Financial Information has not been audited or
reviewed. The Financial Statements and the Interim Financial Information is together referred to as the “Financial
Information”.
4.2.2
Industry and market data
This Prospectus contains statistics, data, statements and other information relating to markets, market sizes, market
shares, market positions and other industry data pertaining to the Company’s business and the industries and markets
in which it operates. Unless otherwise indicated, such information reflects the Company’s estimates based on analysis
of multiple sources, including data compiled by professional organisations, consultants and analysts and information
otherwise obtained from other third party sources, such as annual and interim financial statements and other
presentations published by listed companies operating within the same industry as the Company, as well as the
Company’s internal data and its own experience, or on a combination of the foregoing. Unless otherwise indicated in
the Prospectus, the basis for any statements regarding the Company’s competitive position is based on the Company’s
own assessment and knowledge of the market in which it operates.
The Company confirms that where information has been sourced from a third party, such information has been
accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by
that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading.
Where information sourced from third parties has been presented, the source of such information has been identified.
The Company does not intend, and does not assume any obligations to update industry or market data set forth in this
Prospectus.
Industry publications or reports generally state that the information they contain has been obtained from sources
believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has
not independently verified and cannot give any assurances as to the accuracy of market data contained in this
Prospectus that was extracted from these industry publications or reports and reproduced herein. Market data and
statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions.
Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the
researchers and the respondents, including judgments about what types of products and transactions should be
included in the relevant market.
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Nordic Nanovector AS – Prospectus
As a result, prospective investors should be aware that statistics, data, statements and other information relating to
markets, market sizes, market shares, market positions and other industry data in this Prospectus (and projections,
assumptions and estimates based on such information) may not be reliable indicators of the Company’s future
performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to
a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including
those described in Section 2 “Risk Factors” and elsewhere in this Prospectus.
4.2.3
Other information
In this Prospectus, all references to “NOK” are to the lawful currency of Norway, all references to “EUR” are to the
lawful common currency of the EU member states who have adopted the Euro as their sole national currency, and all
references to “USD” or “U.S. Dollar” are to the lawful currency of the United States. No representation is made that
the NOK, EUR or USD amounts referred to herein could have been or could be converted into NOK, EUR or USD, as the
case may be, at any particular rate, or at all. The Financial Information is published in NOK.
4.2.4
Rounding
Certain figures included in this Prospectus have been subject to rounding adjustments (by rounding to the nearest
whole number or decimal or fraction, as the case may be). Accordingly, figures shown for the same category
presented in different tables may vary slightly. As a result of rounding adjustments, the figures presented may not add
up to the total amount presented.
4.3
Cautionary note regarding forward-looking statements
This Prospectus includes forward-looking statements that reflect the Company’s current views with respect to future
events and financial and operational performance. These forward-looking statements may be identified by the use of
forward-looking terminology, such as the terms “anticipates”, “assumes”, “believes”, “can”, “could”, “estimates”,
“expects”, “forecasts”, “intends”, “may”, “might”, “plans”, “should”, “projects”, “will”, “would” or, in each case, their
negative, or other variations or comparable terminology. These forward-looking statements as a general matter are all
statements other than statements as to historic facts or present facts and circumstances. They appear in the following
Sections in this Prospectus, Section 7 “Industry and Market Overview”, Section 8 “Business of the Group” and Section
10 “Selected Financial and Other Information”, and include statements regarding the Company’s intentions, beliefs or
current expectations concerning, among other things, financial strength and position of the Company, operating
results, liquidity, prospects, growth, the implementation of strategic initiatives, as well as other statements relating to
the Company’s future business development and financial performance, and the industry in which the Company
operates.
Prospective investors in the Shares are cautioned that forward-looking statements are not guarantees of future
performance and that the Company’s actual financial position, operating results and liquidity, and the development of
the industry and market in which the Company operates, may differ materially from those made in, or suggested by,
the forward-looking statements contained in this Prospectus. The Company cannot guarantee that the intentions,
beliefs or current expectations upon which its forward-looking statements are based will occur.
By their nature, forward-looking statements involve, and are subject to, known and unknown risks, uncertainties and
assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Because
of these known and unknown risks, uncertainties and assumptions, the outcome may differ materially from those set
out in the forward-looking statements. Important factors that could cause those differences include, but are not limited
to:

implementation of its strategy and its ability to further expand its business and growth;

technology changes and new products and services introduced into the Company’s market and industry;

ability to develop new products and enhance existing products;

the competitive nature of the business the Company operates in and the competitive pressure and changes
to the competitive environment in general;

loss of important clients;

earnings, cash flow, dividends and other expected financial results and conditions;

fluctuations of exchange and interest rates;

changes in general economic and industry conditions;
20
Nordic Nanovector AS – Prospectus

political and governmental and social changes;

changes in the legal and regulatory environment;

environmental liabilities;

changes in consumer trends;

access to funding; and

legal proceedings.
The risks that are currently known to the Company and which could affect the Company’s future results and could
cause results to differ materially from those expressed in the forward-looking statements are discussed in Section 2
“Risk Factors”.
The information contained in this Prospectus, including the information set out under Section 2 “Risk Factors”,
identifies additional factors that could affect the Company’s financial position, operating results, liquidity and
performance. Prospective investors in the Shares are urged to read all Sections of this Prospectus and, in particular,
Section 2 “Risk Factors” for a more complete discussion of the factors that could affect the Company’s future
performance and the industry in which the Company operates when considering an investment in the Company.
These forward-looking statements speak only as at the date on which they are made. The Company undertakes no
obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information,
future events or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or
to persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements
referred to above and contained elsewhere in this Prospectus.
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Nordic Nanovector AS – Prospectus
5
REASONS FOR THE SUBSEQUENT OFFERING
The Subsequent Offering is conducted in order to provide the Eligible Shareholders who did not participate in the
Private Placement with the opportunity to subscribe to and be allotted Shares at the same subscription price as that
applied in the Private Placement. Further, if not all Subscription Rights are exercised, the Subsequent Offering will give
Eligible Shareholders who participated in the Private Placement or who use Subscription Rights the possibility to
subscribe to and, on the basis of shareholding as of 27 June 2014 (as registered as of the Record Date) and subject to
allocation to such Eligible Shareholders in the Private Placement or on the basis of Subscription Rights, be allocated
Subsequent Offering Shares.
The maximum gross proceeds from the Subsequent Offering are NOK 50 million and the maximum net proceeds are
approximately NOK 48.3 million. The principal intended use of the net proceeds from the Subsequent Offering will be
towards the continued development of lead product candidate BetalutinTM in non-Hodgkin Lymphoma, to finance the
clinical trials of BetalutinTM phase II/III and to expand the number of potential indications for BetalutinTM. See Section
14 “The completed Private Placement and the Subsequent Offering” for more information regarding the Private
Placement and Subsequent Offering. Further, see Section 8.10.1 “Research and development” for more information on
how the Company is developing BetalutinTM.
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Nordic Nanovector AS – Prospectus
6
DIVIDENDS AND DIVIDEND POLICY
6.1
Dividend policy
In deciding whether to propose a dividend and in determining the dividend amount, the Board of Directors will take
into account legal restrictions, as set out in the Norwegian Private Limited Companies Act of 13 June 1997 no. 44 (the
“Norwegian Private Limited Companies Act”) (see Section 6.2 “Legal constraints on the distribution of dividends”),
the Company’s capital requirements, including capital expenditure requirements, its financial condition, general
business conditions and any restrictions that its contractual arrangements in place at the time of the dividend may
place on its ability to pay dividends and the maintaining of appropriate financial flexibility. Except in certain specific
and limited circumstances set out in the Norwegian Private Limited Companies Act, the amount of dividends paid may
not exceed the amount recommended by the Board of Directors.
The Company will strive to follow a dividend policy favourable to the shareholders. The amount of any dividends to be
distributed will be dependent on, inter alia, the Company’s investment requirements and rate of growth. As of the date
of this Prospectus, the Company is in a development phase and is not in a position to pay any dividends. There can be
no assurance that in any given year a dividend will be proposed or declared, or if proposed or declared, that the
dividend will be as contemplated by the policy.
The Company has not paid any dividends for the years ended 31 December 2013 and 2012 or previous years.
6.2
Legal constraints on the distribution of dividends
Dividends may be paid in cash, or in some instances, in kind. The Norwegian Private Limited Companies Act provides
the following constraints on the distribution of dividends applicable to the Company:

Section 8-1 of the Norwegian Private Limited Companies Act provides that the Company may distribute
dividends to the extent that the Company’s net assets following the distribution cover (i) the share capital,
(ii) the reserve for valuation variances and (iii) the reserve for unrealised gains. The amount of any
receivable held by the Company which is secured by a pledge over Shares in the Company, as well as the
aggregate amount of credit and security which, pursuant to Section 8–7 to Section 8-10 of the Norwegian
Private Limited Companies Act fall within the limits of distributable equity, shall be deducted from the
distributable amount.
The calculation of the distributable equity shall be made on the basis of the balance sheet included in the
approved annual accounts for the last financial year, provided, however, that the registered share capital,
as of the date of the resolution to distribute dividends, shall be applied. Following the approval of the annual
accounts for the last financial year, the General Meeting may also authorise the Board of Directors to
declare dividends on the basis of the Company’s annual accounts. Dividend may also be resolved by the
General Meeting based on an interim balance sheet which has been prepared and audited in accordance
with the provisions applying to the annual accounts and with a balance sheet date no earlier than six
months before the date of the General Meeting’s resolution.

Dividends can only be distributed to the extent that the Company’s equity and liquidity following the
distribution is considered sound.
The Norwegian Private Limited Companies Act does not provide for any time limit after which entitlement to dividends
lapses. Subject to various exceptions, Norwegian law provides a limitation period of three years from the date on
which an obligation is due. There are no dividend restrictions or specific procedures for non-Norwegian resident
shareholders to claim dividends. For a description of withholding tax on dividends applicable to non-Norwegian
residents, see Section 13 “Taxation”.
6.3
Manner of dividend payment
Any dividend will be paid to the shareholders through the VPS. Investors registered in the VPS whose address is
outside Norway and who have not supplied the VPS with details of any NOK account, will however receive dividends by
check in their local currency, as exchanged from the NOK amount distributed through the VPS. If it is not practical in
the sole opinion of DNB Bank ASA, being the Company’s VPS registrar, to issue a check in a local currency, a check will
be issued in U.S. dollars. The issuing and mailing of checks will be executed in accordance with the standard
procedures of DNB Bank ASA, Foreign Payments Department. The exchange rate(s) that is applied will be DNB Bank
ASA’s exchange rate on the date and time of day for execution of the exchange for the issuance of cheque. Dividends
will be credited automatically to the VPS registered shareholders’ NOK accounts, or in lieu of such registered NOK
account, by check, without the need for shareholders to present documentation proving their ownership of the Shares.
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Nordic Nanovector AS – Prospectus
7
INDUSTRY AND MARKET OVERVIEW
7.1
The pharmaceutical industry
7.1.1
International trends
The global pharmaceutical industry has demonstrated strong growth with a compound annual growth rate (“CAGR”) of
4.0% for several years spanning from 2009 to 2013. The world pharmaceutical industry is currently estimated at USD
808.1 billion. According to Pharmaceuticals Global Industry Guide, the market is expected to grow at a CAGR of 4.9%
until 2018 and reach USD 1,024.5 billion.1
Increasing in 2012, the US market generated 39.2% of the total revenues in the pharmaceutical industry, compared to
Europe’s 24.4%. Sales in emerging markets have been the main driver behind the growth in total revenues, for
example sales in China and Brazil have grown by 21% and 16% respectively. Sales in the US and Europe have
experienced little or no growth.2
Global pharmaceuticals sales from 2011 to 2013 (by region)
7.1.2
Key drivers
Source:http://www.statista.com/statistics/272181/world-pharmaceutical-sales-by-region/ (20/06/2014)
The pharmaceutical market is currently exposed to opposing forces that will determine the industry’s future. A key
positive driver is the demographic shift towards a lager elderly population as well as a longer life expectancy. The
middle class is growing fast, and the social focus on healthcare is increasing. In addition, the number of patients with
chronic diseases is rising as the world population is growing, and new diseases are evolving. These factors are
expected to increase the demand for healthcare products and services in the future.
1
Global Industry Guide, Market Line, 2014
2
The Pharmaceutical Industry in Figures 2013, Efpia, 2013
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Nordic Nanovector AS – Prospectus
Expected number of people 60, 65 and 85 years and older in USA
percent of total population
30
25
20
Age 60 and older
15
Age 65 and older
Age 85 and older
10
5
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
http://www.aoa.gov/AoARoot/Aging_Statistics/future_growth/future_growth.aspx#age (20/06/2014)
Several key drivers are indicating potential for high growth in the industry, but there are also opposing forces currently
impacting the market. Among the most important ones are governmental interference with current market conditions.
Governments and regulatory authorities are trying to limit the power of pharmaceutical companies by instituting
stricter price controls and regulations in order to keep healthcare costs down for the public. Governments are facing
the dilemma of dealing with the conflicting interests as they attempt to keep healthcare costs down for the average
citizen, while at the same time attempting to incentivize pharmaceutical companies to develop new drugs and
treatments for chronic diseases and unmet medical needs.
Drug regulation authorities are also facing a dilemma as they are trying to maintain high standards for the drugs that
receive market authorisation, but at the same time attempting to limit the delay of entry onto the marketplace of
many new effective treatments for unmet medical needs. History provides numerous examples of drugs that have
passed governmental criteria, but later has to be taken off the market because of severe side-effects. Well known
examples of such cases are the drug products Bextra and Vioxx which were withdrawn from the marketplace after
fatalities attributed to the products were reported.
7.2
The cancer market
7.2.1
General
The market for cancer therapeutics has experienced lower growth than anticipated in recent years. World-wide
spending on cancer drugs reached USD 91 billion in 2013, with a compound annual growth rate of 5.4% spanning from
2008 to 2013. The same market grew by a CAGR of 14.2% from 2003 to 2008, which indicates a severe slowdown
that can be explained partly due to fewer major breakthroughs.3
7.2.2
Cancer epidemiology
World Health Organization’s (“WHO”) Globocan report estimates that cancer accounted for 8.2 million deaths in 2012,
which makes it the world’s most deadly disease. In 2012, 32.6 million individuals lived with a 5-year cancer diagnosis,
while 14.1 million new cases of cancer were reported.4 By 2030 American Cancer Society expects the number of new
incidents of cancer to be 21.3 million per year, and that the number of deaths by cancer will increase to 13.2 million.5
7.2.3
Types of cancer treatments
The cancer therapy (oncology) market is a broad market, and the optimal treatment depends on the type and state of
the cancer, as well as the patient’s overall physical condition. A patient’s treatment plan may consist of one or many
3
http://imshealth.com/portal/site/imshealth/menuitem.c76283e8bf81e98f53c753c71ad8c22a/?vgnextoid=19b381d71adc5410VgnVCM1
0000076192ca2RCRD&vgnextchannel=5ec1e590cb4dc310VgnVCM100000a48d2ca2RCRD&vgnextfmt=default (20/06/2014)
4
WHO Globocan 2012
5
Cancer Facts & Figures 2013, American Cancer Society, 2013
25
Nordic Nanovector AS – Prospectus
different treatments, all depending on the situation. Some cancer patients suffer from extreme pain and want to
increase their life quality for the remaining part of their lives, while for others being cured is the target. Among the
most common treatments are: surgery, chemotherapy, radiation therapy, hormonal therapy and targeted therapy.
Surgery
Surgery is used to both diagnose and to treat cancer. During surgery is it possible to remove entire cancer tissue or
parts of cancer tissues to test it to clarify the stage of cancer, and evaluate what measures can be taken in order to
treat the patient. Surgery can in some cases cure the patient from cancer, given that the cancer has not spread to
vital parts of the body prior to surgery being performed.6
Chemotherapy
Chemotherapy is a systematic cancer treatment that involves the use of cytotoxic drugs. This type of treatment may
consist of one drug or a combination of different drugs, and the drugs are either administered intravenously or orally.
Patients may experience severe side-effects from some chemotherapies that make them unable to enjoy their day-today lives. The reason why patients suffer from side-effects is that chemotherapy drugs indiscriminately target both
normal healthy cells as well as cancer cells.7
Radiation therapy
Radiation therapy is a cancer treatment that involves the use of different types of high-energy external beam radiation
to irradiate and destroy cancer cells. Radiation therapy can be used as part of a treatment plan or as monotherapy for
cancer patients. It is a local treatment that targets only the tumour and the surrounding healthy tissue.8
Immunotherapy
Doctors and scientists agree that the immune system can be used to fight cancer, and have in recent years managed
to design therapies that use a patient’s own immune system against cancer. Immunotherapy is a form of therapy
designed to activate a patient’s immune system in the fight against cancer. The immune system can be utilized in
several ways, but the most common is to increase or “boost” the immune system and to stimulate it to recognise the
cancer cells as foreign bodies that are to be removed. This is normally achieved by giving the patients antibodies,
vaccines or non-specific cancer immunotherapies and adjuvants. Immunotherapy is now an important form of
treatment in the fight against many types of cancer.9
Immunoconjugate Therapy
Immunoconjugates are antibodies that are conjugated (joined) to a second molecule, usually a toxin, radioisotope or
label. These conjugates are used as a targeted form of chemotherapy and are often referred to as antibody-drug
conjugates. When an immunoconjugate consists of an antibody joined to a toxin (cytotoxic molecule) it is referred to
as an immunotoxin. Immunotoxin therapy may be effective in treating cancers that do not respond sufficiently to
immunotherapies. When the immunoconjugate consists of an antibody joined to a radioisotope it is refered to as a
radioimmunotherapy.
Radioimmunotherapy
Radioimmunotherapy is a targeted form of cancer treatment that uses monoclonal antibodies to attack the cancer cells
in two ways, first as an immunotherapy and secondly as a targeting agent for a radioactive payload.
Radioimmunotherapy antibodies seek out and attach themselves to receptors (antigens) on the cancer cells. While the
antibody is stimulating the patients’ immunosystem, the attached radioisotope administers a lethal cytotoxic dose of
radiation to the DNA strands in cancer cell and surrounding cancer cells resulting in the death of multiple tumour cells.
In cases where all other treatments have failed, radioimmunotherapy may succeed because of this double
immunotherapy and radiation effect. Radioimmunotherapy is less harmful for the patients because it reduces the
amount of radiation that reaches the healthy tissue in comparison to external beam radiation. The treatment reduces
the amount of radiation that reaches the healthy tissue, but it may still cause side-effects.10
6
http://www.cancer.org/treatment/treatmentsandsideeffects/treatmenttypes/surgery/surgery-treatment-toc (20/06/2014)
7
http://www.macmillan.org.uk/Cancerinformation/Cancertreatment/Treatmenttypes/Chemotherapy/Chemotherapy.aspx (20/06/2014)
8
http://www.macmillan.org.uk/Cancerinformation/Cancertreatment/Treatmenttypes/Radiotherapy/Radiotherapy.aspx (23/06/2014)
9
http://www.cancer.org/treatment/treatmentsandsideeffects/treatmenttypes/immunotherapy/immunotherapy-what-is-immunotherapy
(23/06/2014)
10
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1237157/ (23/06/2014)
26
Nordic Nanovector AS – Prospectus
7.2.4
Non-Hodgkin lymphoma (NHL)
Currently more than 200 different types of cancer exist, and can develop in 60 different organs in the body. Some
cancer types are known for taking thousands of lives every year, and among these are: breast, lung, prostate, bowel,
malignant melanoma and non-Hodgkin Lymphoma cancer.
Non-Hodgkin Lymphoma is a relatively common type of cancer that develops in either B lymphocytes or T
lymphocytes, often referred to as B cells and T cells. B cells and T cells are white blood cells, but B cells make up 80%
of the total lymphocytes, while T cells make up 20%. The lymphatic system is found throughout the body and as such
NHL can start in any part of the body. This type of cancer can develop in a single lymph node, a group of lymph nodes
or in an organ. Once a white blood cell has become a cancer cell, it can easily spread to vital organs including liver,
bone marrow and spleen. In 2012, 386,000 new cases of NHL cancer were reported globally.11
Expected increasing incidence in 7 major markets
Source:
Incidence and mortality
12
Source: SEER Cancer Statistics 2013,
http://seer.cancer.gov/statfacts/html/nhl.html
NHL market expected to reach approximately USD 7
Top selling products in 2012
billion by 2017
Source: Global Data Pharma E-track database 21/11/2013
Source:
http://globocan.iarc.fr/Pages/fact_sheets_population.aspx
When analysing the pharmaceutical market for treatment of non-Hodgkin lymphoma, it should be noted that clinical
and pricing benchmarks have been established for treatment of non-Hodgkin lymphoma and that existing treatments
are viewed as successful. Rituxan (generic name: rituximab) and Treanda (generic name: bendamustin) are used in
combination with each other and with other cytotoxic compounds (chemotherapies), as first-line treatments. Despite
the success of existing therapies in first time disease, it is also to be noted that the mortality rate from relapsed
disease is still approximately 50% of the incidence rate and that there is still a tremendous need for novel therapies.
11 http://www.wcrf.org/cancer_statistics/world_cancer_statistics.php (23/06/2014)
12 Globocan 2002 (http://www-dep.iarc.fr/;); SEER (http://seer.cancer.gov/statistics/); National Cancer Center Hematology Division
http://www.ncc.go.jp/en/ncch/annrep/2001/hematology.html);
Cancer
Research
UK
(http://info.cancerresearchuk.org);
World
Population Prospects (http://esa.un.org/unpp/) Anderson, J. R., Armitage, J. O., & Weisenburger, D. D., (1998) Epidemiology of the
non-Hodgkin’s lymphomas: distributions of the major subtypes differ by geographical locations. Annal Oncol, 9, 717–720.
27
Nordic Nanovector AS – Prospectus
The NHL market is evolving with the recent introductions of new forms of treatment. Among the factors influencing
this change is the launch of Imbruvica and pending launch of idelalisib. Another development is the introduction of new
immunotherapy that target the CD20 antigen on NHL cells and that may replace the current treatment standard
Rituxan. It is it likely that Gazyva will become the new standard for treatment of NHL replacing Rituxan, and that
Rituxan biosimilars may become available during the fall of 2016 upon expiration of the patents protecting Rituxan.
The drug product candidate BetalutinTM which is currently undergoing clinical testing is being developed for treatment
of relapsed follicular lymphoma (“FL”) and relapsed diffuse large B-cell lymphoma (“DLBCL”). These two types of
cancer are currently the most prevalent forms of NHL. There is a high unmet medical need for treatments targeting
DLBCL patients who are not responding to current therapy. In addition is there a moderate to high unmet medical
need for treatments for FL patients. The moderate to high need for FL treatments is based on the low cure rate,
tempered by a slow disease progression.
Follicular lymphoma
A different type of NHL cancer is Follicular lymphoma (FL) which accounts for roughly 22% of all new cases. Each year
it is estimated to be 16,000 new cases of FL in the US, and 6,000 new cases of FL in Germany/France/UK. According
to EUcan, there is an estimated 2014 prevalent population of 140,000 (10,000 relapsed) in the US and 61,000 (4,000
relapsed) in Germany/France /UK.
13
FL is incurable and patients eventually relapse. The standard first line treatment for FL is R-CHOP. The current second
line treatment standard of care is Rituxan-bendamustin. The median overall survival (“MOS”) for FL patients is usually
8-10 years, but the disease course often varies by patient. Various treatments are available, but R-bendamustine is
emerging as the first line treatment of choice for FL. Use of R-bendamustine often involves an additional mix of other
various chemotherapy regimens. Stem cell transplant is often used on healthy patients shortly after high doses of
chemotherapy, but only about 20% of patients undergo stem cell transplantation in second line treatment or later.14
The development pipeline of FL treatments is currently moderately intensive. Idelalisib with a new method of action
(“MOA”) may be on the market in 2014. There is still a need for curative treatment options as well as treatments with
low side-effects to replace current chemotherapy regimens for FL patients.
Diffuse Large B-cell lymphoma
Accounting for approximately one-third of newly diagnosed cases of NHL, DLBCL is the most common type of NHL
cancer. The number of new cases of DLBCL every year is estimated to be 22,000 and 8,000, in US and
Germany/France/UK respectively. Estimates from EU can suggests that there will be a prevalent population of 113,000
(16,000 relapsed) in the US, and 50,000 (7,000 relapsed) in Germany/France/UK in 2014.15
R-CHOP is a combination of Rituxan and a series of four chemotherapy agents and this combination is currently
established as the standard first line treatment for DLBCL patients. R-CHOP has proven efficient, but high risk patients
10-20% of all DLBCL patients, are less likely to respond to this type of treatment and often quickly relapse. R-CHOP
can achieve a permanent remission for more than 5 years for 65% of patients that undergo treatment. If a DLBCL
patient relapses second line therapy is an option, but the optimal type of treatment varies by patient type. Stem cell
therapy is currently used as second line therapy for 45-50% of patients.16
There is a great unmet medical need for patients that do not respond to first line therapy. Due to the demand for new
forms of therapy the DLBCL development pipeline is very competitive, with several drugs in late stages of clinical
trials. Among these are ibrutinib and obinutuzumab, which both are looking at first line treatment in combination with
standard therapy.
13
http://eco.iarc.fr/eucan/Cancer.aspx?Cancer=38#block-mapc-m (07/07/2014)
14
http://www.lymphoma.org/site/pp.asp?c=bkLTKaOQLmK8E&b=6300155 (07/07/2014)
http://www.cancer.gov/cancertopics/pdq/treatment/adult-non-hodgkins/HealthProfessional/page12 (07/07/2014)
http://health.usnews.com/health-news/news/articles/2012/06/03/rediscovered-lymphoma-drug-helps-double-survival-study
(07/07/2014)
15
http://eco.iarc.fr/eucan/Cancer.aspx?Cancer=38#block-mapc-m (07/07/2014)
http://www.lymphoma.org/site/pp.asp?c=bkLTKaOQLmK8E&b=6300139&gclid=CjgKEAjwiumdBRDZyvKvqb_6mkUSJABDyYOzumXG2JF
SKfSIhKvFseTAY1QhRDkjcBQvyKKbJnvDUfD_BwE (07/07/2014) and
16
18
http://www.lymphoma.org/site/pp.asp?c=bkLTKaOQLmK8E&b=6300153(07/07/2014)
http://www.cancer.org/cancer/non-hodgkinlymphoma/detailedguide/non-hodgkin-lymphoma-types-of-non-hodgkin-lymphoma
(07/07/2014) and
19
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2844047/ (07/07/2014) and
http://jco.ascopubs.org/content/23/15/3383.full (07/07/2014) and
19
28
19
Nordic Nanovector AS – Prospectus
7.3
Drug development
7.3.1
Overview
The research and development of pharmaceutical product is a risk filled, time consuming and an expensive process,
that, providing the drug is approved for marketing, has a potential for high returns on investment. On average, 5 out
of 5,000 drugs make it through the preclinical phase, and historically only 1 out of these 5 is approved by the Food
and Drug Administration (“FDA”) for marketing. It takes on average 12 years to develop a drug.17
7.3.2
Phases
The process of developing a drug product candidate is often divided into several phases, each used to describe the
different aspects of the drug product candidate. The different phases are: the discovery phase, the preclinical
development phase and the clinical research phase. If a drug proves functional through these phases and is accepted
by the regulatory authorities, it can be marketed and sold to the public.
The discovery phase is often a time-consuming and complicated process. It involves a lot of research time and effort
as companies may often screen multiple therapeutic targets and several thousand potential drug candidates at this
stage. Most of the potential drug candidates created in this phase do not make it into preclinical testing, but are
discarded based on poor results. The drug candidates that do show promising results are tested more in depth in the
next phase of the drug development. The first patent applications are normally also written at this stage.18
In the preclinical development phase drug candidates that have shown promising results in the discovery phase are
tested further in living organisms. The focus during the preclinical phase is on documenting of a drug candidate’s
safety, efficacy and toxicity in various animal models. Studying a drug’s toxicity (side-effects) is a requirement and
prerequisite to start trials that is imposed by the authorities in order to maximize patient safety during clinical trials.
The preclinical phase also involves extensive testing of dosage and how the drug product candidate should be
administered. If a drug satisfies the necessary requirements it can be tested on humans in what is referred to as the
clinical phase.19
The clinical phase involves extensive testing of the drugs effect on humans, and is divided into three sub-phases.
Phase I
Phase I involves testing on a small population of patients in order to establish the correct dosage and frequency of
medication to be used in the subsequent clinical trials. The optimal dosage is found by gradually increasing the
dosage, and evaluating how the side-effects change. Results describing how the drug is processed, absorbed and
spread through the body is also collected. It is normal to have approximately 20 to 100 individuals under observation
in this process.20
Phase II
Phase II involves more in-depth testing on how effective a drug product candidate is against a specific type of disease.
The drug product candidates’ effect on the patients is evaluated, and the results indicate the potential efficacy of the
drug product candidate. A wider population of as many as a couple of hundred volunteer patients participate in this
part of the clinical trial.21
Phase III
If a drug product candidate successfully completes phase II and it can be evaluated in phase III setting. In this phase
the drug is compared to medication alternatives already in the pharmaceutical market. This is the final step before the
application for marketing of the drug is sent to the authorities, and therefore involves testing on a large population.
The number of volunteers is often several thousand, in order to reduce uncertainty.22
17 http://www.medicinenet.com/script/main/art.asp?articlekey=9877 (23/06/2014)
18
http://www.patientnetwork.fda.gov/learn-how-drugs-devices-get-approved/drug-development-process/step-1-discovery-and-
development (23/06/2014)
19
http://www.patientnetwork.fda.gov/learn-how-drugs-devices-get-approved/drug-development-process/step-2-preclinical-research
(23/06/2014)
20
http://www.cancer.net/navigating-cancer-care/how-cancer-treated/clinical-trials/phases-clinical-trials (23/06/2014)
21
http://www.cancer.net/navigating-cancer-care/how-cancer-treated/clinical-trials/phases-clinical-trials (23/06/2014)
22
http://www.cancer.net/navigating-cancer-care/how-cancer-treated/clinical-trials/phases-clinical-trials (23/06/2014)
29
Nordic Nanovector AS – Prospectus
7.3.3
Development of cancer drugs
The development of a cancer drug can often be shorter and less complicated than development of regular drugs,
because of the great medical need for new therapies, the life threatening nature of the disease, as well as the low
number of patients that can be cured of cancer.

Phase I can involve testing on cancer patients, which will give an early indication of the drugs efficiency.

In some cases promising results from phase II can be sufficient to receive a marketing approval of a drug
product candidate. This is, often referred to as accelerated approval. Companies that receive an accelerated
approval for a drug product candidate are normally required to conduct the rest of the clinical research
program post-approval.

It is possible to apply for fast track if a drug shows superior effectiveness, or avoids serious side effects
compared to treatments that are currently available. A drug has a high probability of being awarded fast
track if it shows exceptional results at an early stage and the market currently lacks any treatment
alternatives.

Health authorities in the USA, the EU and in Japan can also grant certain drugs orphan designation, if the
drug treats a disease that only affects a small number of people. This is a way of stimulating research and
development of drugs for less common diseases. An orphan drug designation can increase a firm’s
profitability because it can charge higher prices per treatment as well as pay lower fees to authorities. In
addition can orphan drug designation grant exclusivity in a market for up to ten years.23
7.3.4
The Orphan drug market
The Orphan drug market is compared with the regular drug market exempted from several governmental regulations
that can increase profitability, and make the research and development process cheaper. The market has shown
promising signs of growth the last couple of years and in 2012 orphan drug sales increased 7.1% to USD 83 billion
from the previous year. That compares with a 2.1% decline in overall prescription drug sales (excluding generics),
which fell to USD 645 billion in the same period. The worldwide orphan drug market is estimated to grow
USD 127 billion by 2018, at a compound annual growth rate double that of the overall prescription drug
pharmaceutical market.24
7.3.5
Development of haematological cancer drugs
It is normal to differentiate between development of hematologic and solid tumour cancer drugs. Drug candidates for
treatment of hematologic cancers have historically shown larger success rates in clinical development than solid
tumour drug candidates. The total probability of success from phase I to approval is estimated to be 36.0% for
hematologic cancers, versus only 9.8% for solid tumours.25
Phase transition probabilities for cancer drugs
Source: Tufts Centre for the Study of Drug Development
23
http://www.fda.gov/forconsumers/byaudience/forpatientadvocates/speedingaccesstoimportantnewtherapies/ucm128291.htm#fasttrack
(23/06/2014)
24
Orphan Drug Report 2013, EvaluatePharma, 2013
25
Joseph A. DiMasi, Ph.D., Director of Economic Analysis at Tufts Center for the Study of Drug Development
30
Nordic Nanovector AS – Prospectus
8
BUSINESS OF THE COMPANY
8.1
Overview
Nordic Nanovector AS was established in 2009 by Roy H. Larsen and Inven2 AS on behalf of co-inventors of
BetalutinTM,
Øyvind
S.
Bruland
and
Jostein
Dahle.
The
Company’s
mission
is
to
develop
innovative
radioimmunotherapeutics that target difficult to treat cancers using the Company’s proprietary nanovector targeting
technology. The Company’s lead product candidate, Betalutin™, is a radionuclide conjugated to a tumour seeking
carrier/antibody. Betalutin™ aims to prolong and improve the quality of life of people who suffer from non-Hodgkin
Lymphoma (“NHL”). The product candidate is currently undergoing a phase I/II clinical trial for treatment of relapsed
NHL. The Company has completed the work in phase I part of the clinical study, but cannot conclude this phase until
final tests have been completed. The Company expects that these tests will be completed late in the third quarter of
2014. The Company’s estimated completion date of the phase II part is third quarter of 2015. See the figure in Section
8.10.1 “Research and development” for an indication of the timeline of the clinical studies. The Company intends to
commercialise its product candidates through strategic alliances and partnerships with experienced oncology
businesses and by establishing its own sales and marketing capabilities in selected markets.
8.2
Competitive strengths
The Company believes that it has a number of competitive strengths that will enable it to successfully commercialize
Betalutin™. These strengths include:
Potential best-in-class product candidate BetalutinTM which is based on a novel therapeutic target and which

has highly promising early clinical data;
BetalutinTM addresses B-cell non-Hodgkin Lymphoma, an orphan drug indication with substantial unmet

medical need;

Strong IP and unique patented technology;

Unencumbered assets with all options open to maximize shareholder value; and

Leadership with strong expertise in nuclear medicine and oncology.
8.3
Strategy
The Company has developed an overall strategy that includes the following elements:

Market driven product development: NHL is a disease that is incurable in the majority of patients and
that needs new forms of treatment. The Company is attempting to address the unmet medical need in the
treatment of NHL by developing a product that targets a novel therapeutic receptor (CD-37) on cancer cells.
By attacking the CD-37 receptor on the cancer cells, the Company hopes to successfully treat patients that
fail to respond to currently approved therapies such as R-CHOP

26
.
Focused development of lead product candidate: The Company is using the majority of its research
efforts on the development of Betalutin™. In this way the Company expects to quickly address development
related issues as they arise, and to shorten and minimize the development time prior to commercialization.

Virtual product development: The Company is employing a virtual company approach to the
development of Betalutin™.27 Most of the Company’s research and development is carried out off-site by
contract research organizations (“CRO’s”) and contract manufacturing organizations (“CMO’s”). The
Company has employed experienced personnel that are capable of directing work that is performed by the
CRO’s and CMO’s. This approach to product development allows the Company to quickly change research
directions and efforts when needed and to quickly bring in new technologies and expertise when necessary.
26
R-CHOP consists of the pharmaceutical products: Rituxamab, cyclophosphamide, doxorubicin, vincristine, and prednisone.
27
A “virtual company approach” means to describe a business approach where most company activities (research studies, product
production, quality control, etc) are carried out by third parties under contract to the company and where the company maintains a
small, qualified management team to oversee the company operations. The advantages of such operation structure are that it allows
the company to carry out its business without the need of large infrastructure, investment, and overhead costs. The Company believes
that it is can more easily start up new activities without major investment, as well as downsize different activities if necessary without
the need to decrease employee numbers.
31
Nordic Nanovector AS – Prospectus
The initial focus market area for the Company is the second-line of treatment of Follicular Lymphoma. The Company
believes that its longer term potential lies in becoming part of the standard of care in the first-line of treatment of
Follicular Lymphoma. See Section 8.7 “Competition” for more information regarding the Company’s competitors.
In the event the ongoing Phase I/II clinical trial demonstrates that Betalutin™ has a significant and lasting clinical
effect on FL patients, the Company intends to pursue an accelerated approval process to bring the product to market
more quickly than would normally be expected. See Section 8.10.1 “Research and development” for an indication of
the timeline of the clinical studies.
The Company targets completion of its ongoing Phase I/II study in Q3 2015 and the remaining clinical program in line
with the figure below in Section 8.10.1 “Research and development”. It cannot be guaranteed that the patient
inclusion in various studies will proceed as planned. Accordingly, there is a risk of delay of the various clinical studies.
8.4
History and important events
The table below provides an overview of key events in the history of the Company:
Year
Event
2009 ..............
Nordic Nanovector AS is established in Oslo, Norway
2010 ..............
1st patent application filing for BetalutinTM
2011 ..............
1st patent application approved in Norway
The Company moves operations from the Norwegian Radium Hospital to Kjelsåsveien 168 B and first fulltime employees are hired
2012 ..............
Regulatory approval to proceed with phase I/II clinical trial in Sweden
Regulatory approval to proceed with phase I/II clinical trial in Norway
Ready-to-use BetalutinTM formulation developed
First patient included in BetalutinTM clinical trial
2013 ..............
Inspection by Norwegian Medicines Agency successfully completed
Successful closing of a Private Placement of NOK 60 million
HealthCap VI L.P (“HealthCap”) commits to invest NOK 50 million
2014 ..............
BetalutinTM patent approved in the US
New clinical advisory board established
BetalutinTM patent granted in Europe
BetalutinTM clinical trial advances to phase II
Granted orphan-drug designation in the US and in EU
Successful closing of NOK 250 million Private Placement
8.5
Overview of the Company’s business
The Company develops innovative anticancer therapeutics against therapeutic targets. The Company has developed a
nanovector based on a tumour specific antibody and a radioactive nuclide. The nanovector seeks out the lymphoma
cells and the radiation destroys them. The lead product candidate Betalutin™ consists of lutetium-177, conjugated to a
tumour seeking murine monoclonal antibody, HH1 28 , against CD-37 antigen, which can be used for irradiation of
malignant metastasized tumours with minimal damage to nearby healthy normal tissue. This technology aims to
prolong and improve the quality of life of people who suffer from hematologic cancer, in particular NHL.
Figure 8.5: Graphic illustration of the lead product candidate BetalutinTM. Source: Company’s management.
28
Antibody HH1 developed by the Norwegian Radium Hospital.
32
Nordic Nanovector AS – Prospectus
The Company uses third party contractors to produce BetalutinTM. See Section 8.10 “Research and development,
patents and licences” for more information on the Company’s research and method of production of BetalutinTM.
8.6
Customers
In addition to treating the various payer groups in the different geographic markets as customers, e.g. US Government
(Medicaid, Medicare Part B, VA/DOD and Medicare Part D), US commercial payers (employer-based insurance), and
European social security systems in the various EU countries, the Company will focus marketing efforts towards the
community based, hospital based, and tertiary centre based prescribing hematologists/Oncologists and Nuclear
Medicine specialists.
Patients with lymphoma are generally referred to a hematologist or oncologist by their primary-care physician (“PCP”)
in order to receive diagnosis and treatment of NHL. Lymphoma patients give a fairly typical presentation and are
generally diagnosed by their PCP. Common symptoms are enlarged lymph node(s) which causes pain. A PCP may
initially treat as an infection until the patient is referred to a hematologist or oncologist. Indolent lymphomas can be
asymptomatic for long periods (months or years). Aggressive lymphomas are more likely diagnosed earlier as lymph
nodes expand rapidly.
Major prescribers of treatment of NHL are hematologists and oncologists in community or tertiary centres.29 The US
National Lymphocare Survey suggests that approximately 80% of NHL patients are initially treated in community
settings. In the United Kingdom most patients are treated in tertiary centres.
8.7
Competition
8.7.1
General information
The current standard of care treatment regimes for the Indolent (represented by FL) and Aggressive (represented by
DLBCL) forms of NHL are shown in the figure below. As can be seen in the figure, rituximab is predominant and used
extensively in both forms of the disease. Rituximab in combination with various cytotoxic agents are the normal
induction treatments in the first and second line setting. The company believes that BetalutinTM can be effective in
second-line setting in patients that do not respond to rituximab and whose cancers are in progression.
Figure: DLBCL means diffuse large B-cell lymphoma; FL means follicular lymphoma. R-CHOP means Rituximab, cyclophosphamide,
doxorubicin, vincristine, prednisone. R-CVP means Rituximab, cyclophosphamide, vincristine, prednisone. R-DHAP means Rituximab,
dexamethasone, cisplatin, cytarabine. R-ICE means Rituximab, ifosfamide, carboplatin, etoposide. Source: Company’s Management.
29
Community centres are primary care centers and refers to health care given by care professional who act as a first point of
consultation for all patients within the health care system. Secondary and tertiary care are specialised consultative health care, usually
from referrals from a primary health professional, in a facility that has personnel and facilities for advanced medical investigation and
treatment. Depending upon the locality, health system organizer, the organization of the health care system the referral process may
differ.
33
Nordic Nanovector AS – Prospectus
The initial focus area for the Company is therefore in the second-line treatment (1) for both FL and DLBCL. The
Company sees a longer term potential in the first-line standard treatment of patients diagnosed with NHL (2) in
combination with rituximab.
8.7.2
Approved products
Generic products which are used for treatment of NHL are the following:

Doxorubicin has an active ingredient of doxorubicin hydrochloride. It is used in diffuse large B-cell
lymphoma stave IV, metastases to peritoneum, sarcoma uterus, mycosis fungoides refractory, recurrent
cancer and endometrial cancer.

Vincristine has active ingredients of cincristine sulphate. It is used in diffuse Large B-cell Lymphoma stage
IV, B-cell lymphoma stage III, non-Hodgkin lymphoma unspecified histology
indolent stage IV,
lymphoproliferative disorder, skin lesion, paraneoplastic pemphigus.

Cyclophosphamide has active ingredients of cyclophosphamide. It is used in endometrial cancer, b-cell
lymphoma stage III, central nervous system neoplasm, eue infection, burkitt’s leukaemia and ependymoma.

Clotrimazole/Canesten is a fungicide and has active ingredients of clotrimacole. It is used in thrush,
athlete’s foot and tinea corporis.

Treanda which is indicated for the treatment of patients with indolent B-cell NHL that has progressed
during six months of treatment with rituximab or a rituximab-containing regimen.
Other approved products include:
Rituxan® is indicated for previously untreated follicular CD20-positive, B-cell NHL in combination with first-line
chemotherapy and in patients achieving a complete or partial response to Rituxan® in combination with chemotherapy,
as single-agent maintenance therapy. Furthermore, non-progressing (including stable disease), low-grade, DV29positive, B-cell NHL, as a single agent, after first-line CVP chemotherapy. Previously untreated diffuse large B-cell,
CD20-positive NHL in combination with CHOP or other anthracycline-based chemotherapy regimens and relapse or
refractory, lowgrade or follicular, CD20-positive, B-cell NHL is treated with Rituxan® as a single agent.
8.7.3
Alternative CD-37 product candidates under development
There are drug candidates other than BetalutinTM that are in an early stage of development30 and which target the CD37 antigen (receptor) on B-cells. These are immunotherapy or immunoconjugate therapies that target the same novel
therapeutic receptor (CD-37) on cancer cells as BetalutinTM. It should be noted that BetalutinTM is the only
radioimmunotherapy in development that targets the CD-37 receptor. Listed in the table below are the competing CD37 based product candidates that the Company is aware of as of the date of this Prospectus:
Product
Drug Name
TRU-016
Company
Emergent
BioSolutions Inc.
Therapy Area
Oncology
Indications
Chronic Lymphocytic
Leukemia (CLL)
Stage
Territory
Phase II
Global
Phase I
Global
Non-Hodgkin LymCutaneous
T-Cell Lymphoma; Multiple
Myeloma (Kahler’s
Disease); non-Hodgkin
Brentuximab
vedotin
Seattle Genetics
Oncology
Lymphoma; Hodgkin
Lymphoma; Leukemias; Diffuse
Large B-Cell Lymphoma; Solid
Tumour; Anaplastic Large Cell
Lymphoma (ALCL); T-Cell
Lymphomasphoma
30
Early stage development involves products in clinical phase I and IIa. See 8.10.1 “Research and development” for more information
regarding the Company’s progress in the development of BetalutinTM.
34
Nordic Nanovector AS – Prospectus
Non-Hodgkin
IMGN-529
ImmunoGen, Inc.
Oncology
Lymphoma; Chronic
Phase I
Global
Phase I
Global
Phase I
Global
Lymphocytic Leukemia (CLL)
Boehringer
BI 836826
Ingelheim
Non-Hodgkin
Oncology
Lymphoma; Chronic
Lymphocytic Leukemia (CLL)
Follicular
TRU-016
Emergent
Rituximab
Bendamustine
BioSolutions Inc.
Lymphoma; Lymphoma; NonOncology
Hodgkin Lymphoma; B-Cell
Lymphomas; Indolent
Lymphoma
8.7.4
Non-CD-37 NHL products under development
There are also product candidates for competing products in late stage clinical development 31 . The figure below
illustrates the number of different types of products/technologies which are being developed:
The table below illustrates the NHL treatment development pipeline (summary of phase III/pre-registration
compounds) for compounds which are targeting both aggressive and indolent NHL:
Drug (Company)
Ibrutinib
(Pharmacyclics
/
Janssen)
Details
 A Btk kinase inhibitor on the market US approved for R/R MCL & R/R CLL in 2013 (ORR data) looking at a
broad NHL
Indication
 Phase II 1L for MCL 1L for DLBCL (non GCB subtype) and 1L for CLL/SLL and 2L indolent NHL
 Phase I RR DLBCL (monotherapy) and Waldenström’s Macroglobulinemia (WM)
 FDA Breakthrough therapy status for MCL CLL/SLL and WM
Obinutuzumab
(Roche /
Biogen)
Ofatumumab
(GSK / Genmab)
 Third generation anti CD20 mAB
 Phase 3 1L DLBCL, 1L indolent NHL Refractory iNHL
 FDA Approved CLL (2013)
 An anti CD20 mAB
 Phase 3 refractory indolent NHL replaced Follicular Lymphoma 2L DLBCL
 Phase 2 Induction & Maintenance iNHL Waldenström’s Macroglobulinemia
 Approved refractory CLL (US EU)
31
Late stage development involves products that are in phase IIb & phase III clinical trials or that have completed phase IIb and phase
III clinical trials. See 8.10.1 “Research and development” for more information regarding the Company’s progress in the development
of BetalutinTM.
35
Nordic Nanovector AS – Prospectus
Lenalidomide
(Celgene)
 A TNF-alpha synthesis inhibitor
 Phase II iNHL (1L RR & maintenance) and phase 3 DLBCL
 Approved in US for 3L Mantle Cell Lymphoma in 2013
 Approved 3 L mantle Cell Lymphoma – (USA, 2013). Approved in US & EU MDS RR MM (1L to be filed
1Q2014)
Bendamustine
(Teva / Symbio
 An akylaing agent
 Phase 3 1L indolent NHL or Mantle Cell lymphoma. Phase 2 R/R DLBCL
(Japan))
 Approved in US, EU & Japan for R/R iNHL. Approved in Japan for Mantle Cell Lymphoma
BiovaxID
 Vaccine consolidation of 1L therapy
(Biovest)
 Follicular Lymphoma (Pre-Reg EU Ph 3 US). Phase I Mantle Cell Lymphoma
 1L NHL filed in US 2012. CRL received requesting PFS data – ongoing BRIGHT study (secondary EP)
One late stage development compound is only targeting indolent NHL:
Drug (Company)
Idelalisib
(Gilead)
Details
 PDK inhibitor: Could be on the market 2H2014 for indolent NHL
 Filed for refractory NHL (US & EU 2013)
 Phase 2 trial (125) was pivotal study for accelerated approval
 Phase 2 trial was in highly refractory patients (refractory to rituximab & an akylaing agent)
 Phase 3 trials were (and are) ongoing with combination therapy in previously treated NHL patients
Some late stage development compounds are only targeting aggressive NHL:
Drug (Company)
Velcade –
bortezomib
(Millenium /
J&J)
Afinitor –
Details
 Proteasome inhibitor
 Phase II 1L MCL: Phase 2 1L DLBCL (promising results in DLBCL non GCB subtype)
 Filing withdrawn in EU & US for relapsed Follicular lymphoma
 Launched RR Mantle Cell lymphoma in US. Phase 3 EU. Launched for MM (US & EU)
 mTOR inhibitor
Everolimus
 Phase 3 DLBCL 1L adjuvant (after CR on rituximab therapy)
(Novartis)

Approved for transplant rejection: renal cell carcinoma, metastatic renal cancer, pancreatic endocrine
tumour, neuroendocrine tumour, astrocytoma, angiomyolipoma
90YEpratuzumab +
Veltuzumab
 CD20 mAB and a CD22 yttrium Y 90 labelled mAB
 Phase III in R/R Aggressive NHL (DLBCL & Mantle Cell lymphoma)
 Positive results for radiolabeled epratuzumab were reported by Immunomedics as far back as 1999
(Immunomedics)
8.7.5
BetalutinTM in the competitive landscape
The Company believes that BetalutinTM has a competitive advantage over competing technologies. See Section 7.2.3
“Types of cancer treatments” for an explanation of the different technologies used in treating NHL. The Company has
identified a few underlying issues facing competing technologies.

Immunotherapy such as rituximab and immune-conjugate therapy uses a single cell kill approach. In theory
the antibody is to seek out their antigen targets on the surface of individual cancer cells to elicit a response
and the cancer cell subsequently dies. Single cell kill approach is, however, in the Company’s view, difficult
because of tumour biology and cell transformation. The BetalutinTM antibody HH1, on the other hand, seeks
the antigen target on the surface of the cancer cells. The radioactive isotope Lu-177 emits a burst of
radiation directly to the tumour cell and surrounding tumour cells. This results in even poorly perfused or
non-antigen expressing cells within a tumour mass suffer the cytotoxic radiation effect.32

Alpha versus beta radiation. Alpha radiation releases high power radiation over short distances. Such
radiation is shown to be effective in treating metastatic cancers in bone close to bone marrow. Beta
radiation, such as BetalutinTM, penetrates more tissue than alpha radiation and is expected to be more
effective in bulky radiation sensitive tumours such as lymphoma.33
32 http://www.cancer.gov/cancertopics/understandingcancer/targetedtherapies/htmlcourse/page4 (17 August 2014)
33
http://www.cancer.org/treatment/treatmentsandsideeffects/treatmenttypes/radiation/radiationtherapyprinciples/radiation-therapy-
principles-how-is-radiation-given-radiopharmaceuticals (9 July 2014)
36
Nordic Nanovector AS – Prospectus
8.8
Information technology
The Company has outsourced the IT environment, including network, servers, set up and support of printers and PCs.
The services are based on a centralized operations/support model.
8.9
Material contracts
The Company has not entered into any material contracts outside the ordinary course of business for the two years
prior to the date of this Prospectus. Further, the Company has not entered into any other contract outside the ordinary
course of business which contains any provision under which any member of the Company has any obligation or
entitlement.
8.10
Research and development, patents and licences
8.10.1
Research and development
The main activities since incorporation have been related to the development and documentation of the Company’s
lead product candidate, Betalutin™. Research and development are done in-house and in collaboration with contract
research organizations and academic institutes. The production process for BetalutinTM and the intermediates have
been developed from a lab scale process to a well-documented clinical supply scale good manufacturing practices
(“Good Manufacturing Practices”)34. The production of antibody is done at Diatec Monoclonals in Oslo, while the
antibody is purified and conjugated at 3P biopharmaceuticals in Spain. Manufacturing of the clinical supplies of
BetalutinTM is currently performed at the Institute for Energy Technology (“IFE”) at Kjeller in Norway and shipped from
there to the study centres.
BetalutinTM is currently in clinical phase II of a phase I/II study for follicular lymphoma. See the illustration below for
an overview of the timeline of the different clinical studies the Company is currently pursuing:
34
“Good Manufacturing Practices” is defined as practices that are required in order to conform to guidelines recommended by agencies
that control authorization and licensing for manufacture and sale of food, drug products, and active pharmaceutical products. These
guidelines provide minimum requirements that a pharmaceutical or a food product manufacturer must meet to assure that the products
are of high quality and do not pose any risk to the consumer or public. Good manufacturing practices, along with good laboratory
practices and good clinical practices, are overseen by regulatory agencies in the United States, Canada, Europe, China, in addition to
other countries.
37
Nordic Nanovector AS – Prospectus
Please see star (*) in the illustration above: In order to achieve a marketing authorization for BetalutinTM in Europe it
may be necessary to run a larger trial with a comparator arm35, which will require more patients than specified in the
table above. The continued development and results in the clinical studies of Betalutin™ has a material effect on the
future prospects of the Company.
The ongoing study is a phase I/II, open-label study in patients with relapsed CD-37 positive non-Hodgkin lymphoma.
The phase I part of the study is a dose escalating study whose objective is to define the maximum tolerable dose of
BetalutinTM, assess safety, toxicity, pharmacokinetics, biodistribution and efficacy of BetalutinTM. The preliminary
phase I data indicates that BetalutinTM can be safely administered to patients with NHL. Approximately ten patients
have been enrolled in the Phase I/II trials. It is too early to know whether patients will have a significant benefit from
Betalutin, but it has been observed that BetalutinTM has a clinically relevant effect at all dose levels administered
during phase I. The completion of the phase I study is expected to be finalised in Q3 2014. The primary objective in
phase II is to investigate tumour response rate in patients receiving BetalutinTM. Secondary objectives include
confirming the recommended dose of BetalutinTM, to investigate the safety and toxicity, to estimate progression free
survival and to estimate overall survival. See Section 4.3 “Cautionary note regarding forward-looking statements” for
more information regarding forward looking statements.
The Company has not initiated phase II of the aggressive lymphoma study as of the date of this Prospectus. The
Company’s strategy will be to first apply for orphan drug designation for aggressive lymphoma prior to starting clinical
trials.
The Company is currently investigating several new possible uses for the CD37 antibody platform and it is in early
discovery phase with testing of new radioimmunoconjugates against other diseases.
The Company does not have any other products under development at the date of the Prospectus. The Company has
an ongoing discovery program that may, in the future, lead to new product candidates, if successful. How long it will
take until a new product candidate is available for clinical development is very uncertain. As such, it is not possible to
assign a value to any other Company research than Betalutin, and therefore it would be inappropriate and misleading
to discuss such other research in the Prospectus.
To support the Company’s research efforts, the Company currently employs a technical staff consisting of three PhDs,
and five Masters, in Biophysics, Chemistry and Physiology. The experience in the field of antibodies and
radioimmunotherapy range from in vitro and in vivo discovery and preclinical studies, via characterization, stability
and development studies to technical transfer and full GMP production and documentation in accordance with
regulatory guidelines. In addition, the Company has experience from all phases of clinical studies, clinical
documentation and regulatory approval processes. The Company is dependent upon having a qualified scientific team
and there is competition for key personnel with the required experience, but the Company has been able to source
such experience when required.
8.10.2
Collaborative research and development agreements
The Company has started research collaboration with the academic research institution INSERM in Montpellier and
Toulouse, funded by a research based innovation grant from the Norwegian Research Council, for determination of the
detailed mechanism of action of BetalutinTM, for 3-dimensional in vivo biodistribution studies and for comparison of
BetalutinTM with other treatments of NHL. The Company is of the opinion that such research and development
collaboration will benefit the Company in its research efforts.
8.10.3
Research and development expenses
Research and development (“R&D”) expenses for 2013 were NOK 17,806,730 of which NOK 12,850,730 in 2013 are
classified as other expenses and NOK 4,956,000 are classified as payroll and related costs. Government grants of NOK
7,587,000 have been recognized in the profit and loss for 2013 as a reduction of the related expense. A breakdown of
the grants for 2013 is included in Section 8.10.4 “Grants” below.
35
Comparator arm means a group of patients receiving a specific treatment in which active drugs are given. Trials involving several
arms treat randomly-selected groups of patients with different patients’ therapies in order to compare their medical outcome.
http://clinicaltrials.gov/ct2/about-studies/glossary (02/07/2014)
38
Nordic Nanovector AS – Prospectus
R&D expenses for 2012 were NOK 10,823,393 which of NOK 7,622,965 are classified as other expenses and NOK
3,200,428 are classified as payroll and related costs. Government grant of NOK 4,186,177 have been recognized in the
profit and loss of 2012 as a reduction of the related expense. A breakdown of the grants for 2012 is included in
Section 8.10.4 “Grants” below.
All expenditure on research activities is recognized as an expense in the period in which it is incurred.
8.10.4
Grants
The Company has been awarded a grant from The Norwegian Research Council (program for user-managed innovation
arena (BIA)) of NOK 10,500,000 in total for the period 2012 through 2015. For the financial year ended 31 December
2013, the Company has recognized NOK 5 million (2012: NOK 1.5 million) classified partly as a reduction of payroll
and related expenses and partly as a reduction of other operating expenses. The Norwegian Research Council has
awarded a grant supporting a PhD for the period 2011 until September 2014 of NOK 1,940,000 in total. For the
financial year 2013, the Company has recognized NOK 651,000 (2012: NOK 638,000) partly as a reduction of payroll
and related expenses and partly as a reduction of other operating expenses.
R&D projects have been approved for SkatteFunn for the period 2012 through 2015. For the financial year 2013, the
Company has recognized NOK 2,386,000 compared with NOK 1,300,000 in 2012. The amount was recognized partly
as a reduction of payroll and related expenses and partly as a reduction of other operating expenses.
The Company was awarded a grant from Innovation Norway of in total NOK 4,500,000 for the period 2010-2012. NOK
450,000 was not retained and has been recognized as an expense in 2013.
8.10.5
Patents
The Company strive to protect the proprietary technologies that the Company believes are important to its business,
including seeking and maintaining patent protection intended to cover the composition of matter of the Company’s
product candidate, its methods of use and other inventions that are important to the Company’s business. The U.S.
Patent and Trademark Office have issued patent no. 8628749 entitled “RADIOIMMUNOCONJUGATES AND USES
THEREOF” and the European Patent Office has granted patent no. 2528627, entitled “RADIOIMMUNOCONJUGATES
AND USES THEREOF”. The issued claims cover the Company’s proprietary radioimmunotherapy technology including
the Company’s lead product candidate Betalutin™. The Company has a “composition of matter” patent on the
complete antibody-chelator-radionuclide complex. The expiry date for the patent is 2031. The patent is also granted in
Norway, Hong Kong, South Africa, New Zealand and has been approved for grant in China. Patent applications are
pending in Mexico, Japan, Australia, Singapore, Thailand, Philippines, Brazil, Canada, Indonesia, Israel, India, Korea,
Russia, and Ukraine.
The Company has also filed patent applications on chimeric versions of Betalutin™ published as PCT application
number WO2013088363. The applications has been filed in USA, Hong Kong, South Africa, New Zealand, China,
Mexico, Japan, Australia, Singapore, Thailand, Philippines, Brazil, Canada, Indonesia, Israel, India, Korea, Russia, and
in the EU.
The ownerships of the above mentioned patents and patent applications are held by the Company.
Applications for protection of the trademark BetalutinTM have been filed and approved in Australia, Canada,
Switzerland, China, EU, Japan, Korea, Russia, Singapore, US, Israel, Mexico, New Zealand, South Africa and Norway.
The Company’s success will depend significantly on its ability to obtain and maintain patent and other proprietary
protection for commercially important technology, inventions and know-how related to its business, defend and
enforce its patents, preserve the confidentiality of the Company’s trade secrets and operate without infringing the valid
and enforceable patents and other proprietary rights of third parties. The Company also relies on know-how and
continuing technological innovation to develop, strengthen, and maintain its proprietary position in the field of cancer
treatment.
The costs of the patents, depending upon the nationality of the patent application, are usually comprised of a one-time
application fee, a yearly maintenance fee, and costs for prosecution and issuance of the patent. The maintenance fee
of patents is currently approximately NOK 125,000 per year for the two patents that have been granted.
The patent positions of biopharmaceutical companies are generally uncertain and involve complex legal, scientific and
factual questions. In addition, the coverage claimed in a patent application can be significantly reduced before the
39
Nordic Nanovector AS – Prospectus
patent is issued, and its scope can be reinterpreted after issuance. Consequently, the Company does not know
whether if its product candidate and future candidates will be protectable or remain protected by enforceable patents
in all relevant countries. The Company cannot predict whether the pending patent applications the Company is
currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will
provide sufficient proprietary protection from competitors. Any patents that the Company holds may be challenged,
circumvented or invalidated by third parties.
The Company also rely on trade secret protection for its confidential and proprietary information.
8.11
Legal proceedings
From time to time, the Company may become involved in litigation, disputes and other legal proceedings arising in the
normal course of business, principally personal injury, property casualty and cargo claims. The Company expects that
these claims would be covered by insurance, subject to customary deductibles. Such claims, even if lacking merit,
could result in the expenditure of significant financial and managerial resources.
The Company is, nor has been during the course of the preceding twelve months, involved in any legal, governmental
or arbitration proceedings which may have, or has had in the recent past, significant effects on the Company’s and/or
the Company’s financial position or profitability, and the Company is not aware of any such proceedings which are
pending or threatened.
8.12
Dependency on contracts, patents and licenses etc.
It is the Company’s opinion that the Company’s existing business or profitability is not dependent upon any contracts.
It is further the opinion of the Company that the Company’s existing business or profitability is not dependent on any
patents or licences other than the patent no. 8628749 issued by the U.S. Patent and Trademark Office and patent no.
2528627 issued by the European Patent Office, as further described in Section 8.10.5 “Patents”.
8.13
Property, plants and equipment
The Company leases premises in Oslo for office and laboratory purposes. The rental agreement for the premises in
which the Company was located as of 31 December 2013 expires on 31 December 2015. This agreement relates to
350 square metres and the annual rental amount is NOK 446,250, except for 2014 when the minimum rental amount
is NOK 334,688 as the Company has been granted a three-month rent-free period. A part of the rented area is shared
with a related party as an incubator service. The related party is a company controlled by the Chairman of the Board.
The Company has entered into a lease agreement for additional office and laboratory space (1,075 square metres) in
the same building with effect from January 2014. The rental agreement also includes limited parking and basement
storage, at NOK 84,500 per annum. The annual rental amount for the additional office and laboratory space from 2014
is NOK 1,352,000. The Company will in addition to this amount be charged for a proportionate share of common
variable costs related to building management.
Lease
Expiry date
Third floor office/laboratory space (sub-leased from January 2014) and basement storage ...................... 31 December 2015
Fourth floor office/laboratory space (from January 2014) ................................................................... 31 December 2019
The rental agreements may not be terminated during the rental period. The Company has the right to extend the
rental agreements with three years.
There are currently no environmental issues that may affect the Company’s utilization of the tangible fixed assets.
The Company does not own any assets which are necessary for production.
40
Nordic Nanovector AS – Prospectus
9
CAPITALISATION AND INDEBTEDNESS
The information presented below should be read in conjunction with the information included elsewhere in this
Prospectus, including Section 10 “Selected Financial and Other Information” and the Financial Statements and related
notes, included in Appendix B to this Prospectus.
The following table sets forth the unaudited capitalisation and net financial indebtedness of the Company as of 30 June
2014. The adjusted unaudited figures are derived from financial information obtained from the Company reflecting
material changes since 30 June 2014 being the Private Placement raising gross proceeds of NOK 250 million in June
2014. Except for this, there has been no material change since 30 June 2014.
9.1
Capitalisation
(In NOK)
As of
Adjusted 30
30 June 2014
June 2014
(unaudited)
(unaudited)
Indebtedness
Total current debt
- Guaranteed ....................................................................................................................
0
- Secured .........................................................................................................................
0
0
0
- Unguaranteed/unsecured ..................................................................................................
6,986,448
6,986,448
- Guaranteed ....................................................................................................................
0
0
- Secured .........................................................................................................................
0
0
- Unguaranteed/unsecured ..................................................................................................
0
0
Total indebtedness ............................................................................................................
6,986,448
6,986,448
Total non-current debt
Shareholders’ equity
a. Share capital1 ................................................................................................................
2,564,275
4,564,275
b. Additional paid-in capital1 ................................................................................................
116,152,479
353,152,479
c. Other reserves ...............................................................................................................
(66,338,190)
(66,338,190)
d. Non-controlling interests .................................................................................................
0
0
Total equity .......................................................................................................................
52,210,215
291,378,564
Total capitalisation ............................................................................................................
59,196,663
298,365,012
1
The Private Placement registered on 4 July 2014 increased the share capital by NOK 2,000,000 from NOK 2,564,275 to NOK 4,564,275, the additional
paid-in capital increased by NOK 237 million (net proceeds of the Private Placement less the share capital increase) from NOK 116,152,479 to NOK
353,152,479 and Cash by NOK 239 million (net proceeds of the Private Placement including the increase in share capital) from NOK 51,646,771 to
NOK 290,464,771. See Section 14 “The completed Private Placement and the Subsequent Offering” for more information on the Private Placement.
41
Nordic Nanovector AS – Prospectus
9.2
Net financial indebtedness
(In NOK)
As of
Adjusted 30
30 June 2014
June 2014
(unaudited)
(unaudited)
Net indebtedness
(A) Cash1 ...........................................................................................................................
51,646,771
(B) Cash equivalents ............................................................................................................
0
0
(C) Interest bearing receivables .............................................................................................
0
0
(D) Liquidity (A)+(B)+(C) ...................................................................................................
51,646,771
290,464,771
(E) Current financial receivables .........................................................................................
6,883,052
6,883,052
(F) Current bank debt...........................................................................................................
0
0
(G) Current portion of long-term debt .....................................................................................
0
0
(H) Other current financial liabilities........................................................................................
0
0
(I) Current financial debt (F)+(G)+(H) ...............................................................................
0
0
(J) Net current financial indebtedness (I)-(E)-(D) ..............................................................
(58,529,823)
(283,581,719)
(K) Long-term interest bearing debt .......................................................................................
0
0
(L) Bonds issued ..................................................................................................................
0
0
(M) Other non-current financial liabilities .................................................................................
0
0
(N) Non-current financial indebtedness (K)+(L)+(M) .........................................................
0
0
(O) Net financial indebtedness (J)+(N) ...............................................................................
(58,529,823)
(283,581,719)
1
290,464,771
The Private Placement registered on 4 July 2014 increased the share capital by NOK 2,000,000 from NOK 2,564,275 to NOK 4,564,275, the
additional paid-in capital increased by NOK 237 million (net proceeds of the Private Placement less the share capital increase) from NOK
116,152,479 to NOK 353,152,479 and Cash by NOK 239 million (net proceeds of the Private Placement including the increase in share capital) from
NOK 51,646,771 to NOK 290,464,771. See Section 14 “The completed Private Placement and the Subsequent Offering” for more information on the
Private Placement.
9.3
Working capital statement
The Company is of the opinion that the working capital available to the Company is sufficient for the Company’s
present requirements, for the period covering at least 12 months from the date of this Prospectus.
9.4
Contingent and indirect indebtedness
As at 30 June 2014 and as at the date of the Prospectus, the Company did not have any contingent or indirect
indebtedness.
42
Nordic Nanovector AS – Prospectus
10
SELECTED FINANCIAL AND OTHER INFORMATION
10.1
Introduction and basis for preparation
The following selected financial information has been extracted from the Company’s audited financial statements as of,
and for the years ended, 31 December 2013 and 2012 (the Financial Statements) (included in Appendix B), as well as
the unaudited interim financial information as of and for the three and six month periods ended 30 June 2014 and
2013 (the Interim Financial Information) (included in Appendix C).
The Financial Statements have been prepared in accordance with IFRS. The unaudited Interim Financial Information
has been prepared in accordance with IAS 34.
The Company’s auditor is Ernst & Young AS, Dronning Eufemias gate 6, 0191 Oslo (“EY”). EY and its auditors are
members of The Norwegian Institute of Public Accountants (Nw.: Den Norske Revisorforening). EY has been the
Company’s auditor since 14 May 2014. Prior to this, Thorsby AS, was the Company’s auditor. Thorsby AS and its
auditors are members of The Norwegian Institute of Public Accountants. The Company choose not to reappoint
Thorsby AS due to the lack of experience with companies with international operations. The Financial Statements for
the years ended 31 December 2013 and 2012 have been audited by EY, and the auditor’s reports are included
together with the Financial Statements in Appendix B. The Interim Financial Information have not been audited or
reviewed.
EY has not audited, reviewed or produced any report on any other information provided in this Prospectus.
The selected financial information included herein should be read in connection with, and is qualified in its entirety by
reference to the Financial Statements and Interim Financial Information included in Appendix B and Appendix C,
respectively, of this Prospectus.
10.2
Summary of accounting policies and principles
For information regarding accounting policies and the use of estimates and judgments, please refer to note 2 of the
Financial Statements included in this Prospectus as Appendix B.
10.3
Condensed statement of comprehensive income
The table below sets out selected data from the Company’s audited statement of comprehensive income for the years
ended 31 December 2013 and 2012 and from the Company’s unaudited interim statement of comprehensive income
for the three and six month periods ended 30 June 2014 and 2013.
(In NOK)
Three months ended
Six months ended
Year ended
30 June
30 June
31 December
2014
2013
2014
2013
(unaudited)
(unaudited)
(unaudited)
(unaudited)
2013
2012
Continuing operations
Operating revenue ..................
118,461
56,367
236,604
167,879
306,061
148,145
Total operating revenue........
118,461
56,367
236,604
167,879
306,061
148,145
Payroll and related expenses ....
2,845,723
977,476
5,923,805
2,233,530
5,247,252
4,432,135
Depreciation ..........................
74,085
40,042
140,854
173,291
236,788
779,468
Other operating expenses ........
12,913,350
2,183,650
21,778,205
3,089,610
12,933,131
8,681,947
Total operating expenses......
15,833,158
3,201,168
27,842,864
5,496,431
18,417,170
13,893,550
Operating profit (loss) ..........
(15,714,697
(3,144,801)
(27,606,260)
(5,328,552)
(18,111,110)
(13,745,405)
Finance income ......................
496,099
70,143
1,040,375
95,449
1,206,884
296,034
Finance expense .....................
65
0
134
194
106,711
417
Financial items, net ..............
496,034
70,143
1,040,241
95,255
1,100,173
295,617
Loss before income tax ......... (15,218,663)
(3,074,658)
(26,566,019)
(5,233,297)
(17,010,937)
(13,449,788)
Finance income and
finance expenses
Income tax ............................
0
0
0
0
0
0
Loss for the year/period ....... (15,218,663)
(3,074,658)
(26,566,019)
(5,233,297)
(17,010,937)
(13,449,788)
0
0
0
0
0
0
income (loss) for the year .... (15,218,663)
(3,074,658)
(26,566,019)
(5,233,297)
(17,010,937)
(13,449,788)
Other comprehensive income
(loss), net of income tax ..........
Total comprehensive
43
Nordic Nanovector AS – Prospectus
(In NOK)
Three months ended
Six months ended
Year ended
30 June
30 June
31 December
2014
2013
2014
2013
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(3,074,658)
(26,566,019)
(0.44)
(2.34)
2013
2012
(5,233,297)
(17,010,937)
(13,449,788)
(0.79)
(1.92)
(2.11)
Loss for the year
attributable to owners of
the company ......................... (15,218,663)
Earnings (loss) per share
Basic and diluted earnings
(loss) per share
10.4
(1.32)
Statement of financial position
The table below sets out selected data from the Company’s audited statement of financial position as of 31 December
2013 and 2012 and from the Company’s unaudited interim statement of financial position as of 30 June 2014.
(In NOK)
As of
As of
30 June
31 December
2014
2013
2012
(unaudited)
Assets
Non-current assets
Property, plant and equipment .............................................................
622,040
335,949
276,460
Total property, plant and equipment ................................................
622,040
335,949
276,460
Receivables
Other non-current receivables..............................................................
44,800
44,800
0
Total non-current receivables ...........................................................
666,840
380,749
276,460
Current assets
Receivables
Other receivables ...............................................................................
6,883,052
6,072,958
4,029,254
Total receivables ..............................................................................
6,883,052
6,072,958
4,029,254
Cash and cash equivalents ................................................................
51,646,771
79,569,002
6,669,935
Total current assets ..........................................................................
58,529,823
85,641,960
10,669,189
Total assets ......................................................................................
59,196,663
86,022,709
10,975,649
Equity and liabilities
Shareholders’ equity
Share capital .....................................................................................
2,564,275
2,214,942
1,277,268
Share premium .................................................................................
116,152,479
92,544,684
30,058,814
Other reserves ..................................................................................
831,651
25,389,837
698,283
Retained earnings (accumulated losses) ................................................
(67,338,190)
(41,364,171)
(24,353,234)
Total shareholders’ equity ................................................................
52,210,215
78,785,292
7,681,131
Accounts payable ...............................................................................
2,730,487
4,499,213
2,085,358
Other current liabilities .......................................................................
4,255,961
2,738,204
1,209,160
Total current liabilities......................................................................
6,986,448
7,237,417
3,294,518
Total liabilities ..................................................................................
6,986,448
7,237,417
3,294,518
Total shareholders’ equity and liabilities ..........................................
59,196,663
86,022,709
10,975,649
Liabilities
Current liabilities
44
Nordic Nanovector AS – Prospectus
10.5
Statement of cash flow
The table below sets out selected data from the Company’s audited statements of cash flows for the years ended 31
December 2013 and 2012 and from the Company’s unaudited interim statements of cash flows for the six months
ended 30 June 2014 and 2013.
(In NOK)
Six months ended
Year ended
30 June
31 December
2014
2013
(unaudited)
(unaudited)
2013
2012
(17,010,937)
(13,449,788)
Cash flows from operating activities
Loss for the period/year .........................
(26,566,019)
(5,233,297)
Interest paid ........................................
0
0
(106,301)
(262)
Interest received ..................................
0
0
1,130,824
293,614
Share option expense employees ............
33,789
65,522
99,579
509,907
Share base payment (board of directors) ..
0
0
592,000
0
Depreciation ........................................
140,854
173,291
236,788
779,468
Adjustments for:
Change in trade receivables....................
(60,067)
46,810
37,056
(28,931)
Change in trade payables .......................
(1,768,726)
(1,699,494)
2,413,855
1,254,381
Changes in receivables related to grants ..
846,132
62,792
(1,162,204)
(166,820)
Changes in other current assets ..............
(1,686,688)
(132,763)
(2,094,180)
(582,105)
Changes in other current liabilities ...........
1,048,286
(117,621)
1,635,344
592,657
(28,012,439)
(6,834,760)
(14,228,175)
(10,797,879)
(444,792)
0
(296,277)
(78,041)
(444,792)
0
(296,277)
(78,041)
Proceeds from new debt ........................
0
4,000,000
0
0
Proceeds from equity issue .....................
535,000
58,245,093
87,423,519
135,000
535,000
62,245,093
87,423,519
135,000
(27,922,231)
55,410,333
72,899,067
(10,740,920)
Net
cash
flows
from
operating
activities .............................................
Cash flows from investing activities
Outflows from acquisition of fixed assets ..
Net
cash
flows
from
investing
activities .............................................
Cash flows from financing activities
Net
cash
flows
from
financing
activities .............................................
Net change in bank deposits, cash and
equivalents ..........................................
Cash and equivalents at beginning of
year....................................................
79,569,002
6,669,935
6,669,935
17,410,855
Cash and equivalents at end of year ...
51,646,771
62,080,268
79,569,002
6,669,935
10.6
Statement of changes in equity
The table below sets out selected data from the Company’s audited statements of changes in equity for the years
ended 31 December 2013 and 2012 and from the Company’s unaudited interim statement of changes in equity for the
six month periods ended 30 June 2014 and 2013.
(In NOK)
Equity-settled
Share
Share
Convertible
share-based
Accumulated
capital
premium
instruments
payments
losses
Total equity
or the year ended 31
December
Balance at 1 January 2012
Loss for the year........................
318,317
30,882,765
0
188,376
(10,903,446)
20,486,012
0
0
0
0
(13,449,788)
(13,449,788)
Other comprehensive income
(loss) for the year, net of
income tax................................
0
0
0
0
0
0
Total comprehensive income
0
0
0
0
(13,449,788)
(13,449,788)
45
Nordic Nanovector AS – Prospectus
(In NOK)
Equity-settled
Share
Share
Convertible
share-based
Accumulated
capital
premium
instruments
payments
losses
Total equity
for the year ..............................
Convertible instruments ..............
0
0
0
0
0
0
0
0
0
509,907
0
509,907
954,951
(954,951)
0
0
0
0
4,000
131,000
0
0
0
135,000
1,277,268
30,058,814
0
698,283
(24,353,234)
7,681,131
0
0
0
0
(17,010,937)
(17,010,937)
0
0
0
0
0
0
for the year ..............................
0
0
0
0
(17,010,937)
(17,010,937)
Convertible instruments
0
0
25,000,000
0
0
25,000,000
Recognition of share-based
share options ............................
Issue of ordinary shares –
capitalization issue .....................
Issue of ordinary shares under
share options ............................
Balance
at
31
December
2012
Loss for the year........................
Other comprehensive income
(loss) for the year, net of
income tax................................
Total comprehensive income
Recognition of share-based
payments .................................
0
592,000
0
99,579
0
691,579
Issue of ordinary shares .............
863,116
59,989,668
0
0
0
60,852,784
Issue of ordinary shares under
share options ............................
14,333
459,417
0
0
0
473,750
Conversion of convertible loan .....
60,225
4,046,076
0
0
0
4,106,301
Share issue costs .......................
0
(2,601,291)
(408,025)
0
0
(3,009,316)
2,214,942
92,544,684
24,591,975
797,862
(41,364,171)
78,785,292
1,277,268
30,058,814
0
698,283
(24,353,234)
7,681,131
0
0
0
0
(5,233,297)
(5,233,297)
0
0
0
0
0
0
for the period ..........................
0
0
0
0
(5,233,297)
(5,233,297)
Convertible instruments ..............
0
0
0
0
0
0
Balance
at
31
December
2013
Balance at 1 January 2013
Loss for the period ....................
Other comprehensive income
(loss) for the period net of
income tax ...............................
Total comprehensive income
Recognition of share-based
payments .................................
0
0
0
65,522
0
65,522
Issue of ordinary shares .............
840,782
59,531,852
0
0
0
60,372,634
share options ............................
14,333
459,417
0
0
0
473,750
Conversion of convertible loan .....
0
0
0
0
0
Issue of ordinary shares under
Share issue costs .......................
(2,601,291)
0
(2,601,291)
Balance at 30 June 2013 .........
2,132,383
87,448,792
0
763,805
(29,586,530)
Balance at 1 January 2014 ......
2,214,942
92,544,684
24,591,975
797,862
(41,364,171)
60,758,450)
78,785,292
Loss for the period .....................
0
0
0
0
(26,566,019)
(26,566,019)
0
0
0
0
0
0
for the period ..........................
0
0
0
0
(26,566,019)
(26,566,019)
Convertible instruments .............
0
0
0
0
0
0
Other comprehensive income
(loss) for the period net of
income tax ...............................
Total comprehensive income
Recognition of share-based
payments ................................
0
0
0
33,789
0
33,789
Issue of ordinary shares .............
0
0
0
0
0
0
535,000
Issue of ordinary shares under
share options ............................
16,000
519,000
0
0
0
Conversion of convertible loan .....
333,333
24,258,642
(24,591,975)
0
0
0
Share issue costs .......................
0
(577,847)
0
0
0
(577,847)
Balance at 30 June 2014 .......... (2,564,175)
116,152,479
0
831,651
(67,338,190)
52,210,215
46
Nordic Nanovector AS – Prospectus
10.7
Sales revenues by geographic area
The table below sets out the Company’s sales revenues by geographic area for the year ended 31 December 2013 and
2012 and from the Company’s unaudited interim statement of comprehensive income for the three and six month
periods ended 30 June 2014 and 2013.
Year ended
(In NOK)
Three months ended
Six months ended
31
30 June
30 June
December
2014
2013
2014
2013
Year ended
31
December
2013
2012
Sales revenues ..........................
118,461
56,367
236,604
167,879
306,061
148,145
- Norway .....................................
118,461
56,367
236,604
167,879
306,061
148,145
Revenue arises from services related to incubator services, outsourcing of employees and income from subleasing of
the laboratory space, instruments and services shared with other companies. Please see Section 10.11 “Related party
transactions” for more information regarding the transactions.
10.8
Liquidity and capital resources
10.8.1
Sources of liquidity
The Company’s principal sources of liquidity are cash flows from equity issues and governmental grants. The Company
primarily uses cash for development of the lead product candidate BetalutinTM which is in clinical trial and necessary
working capital.
The Company believes that the same general combination of funds provided by governmental grants and possible
equity issues will be sufficient to meet the Company’s working capital and capital expenditure requirements for the
foreseeable future.
Furthermore, the Company will continually evaluate strategic business development initiatives and partnering
opportunities, thereby looking into potential licensing of the Company’s patented drug BetalutinTM to third parties. See
Section 8.3 “Strategy” for more information regarding the Company’s strategy.
10.8.2
Restrictions on use of capital
There are currently no restrictions on the use of the Company’s capital resources that have materially affected or could
materially affect, directly or indirectly, the Company’s operations. The Company does not have any debt covenants,
and is therefore not in breach and does not expect to be in breach of such covenants.
10.8.3
Summarized Cash flow information
The following table summarises the Company’s historical cash flows, and is extracted from the Financial Statements as
of and for the years ended 31 December 2013 and 2012, prepared in accordance with IFRS, and the Interim Financial
Statements, prepared in accordance with IAS 34:
(In NOK)
Six months ended
Year ended
30 June
31 December
2014
2013
(unaudited)
(unaudited)
2013
2012
Net cash from/(used in) operating activities .....................
(28,012,439)
(6,834,760)
(14,228,175)
(10,797,879)
Net cash from/(used in) investing activities......................
(444,792)
0
(296,277)
(78,041)
Net cash from/(used in) financing activities......................
535,000
62,245,093
87,423,519
135,000
Net exchange effects on cash ........................................
0
0
0
0
Net cash and cash equivalents at end of period ................
51,646,771
62,080,268
79,569,002
6,669,935
10.8.4
Cash flows from/(used in) operating activities
Six months ended 30 June 2014 compared to the six months ended 30 June 2013
Net cash outflow from operating activities for the six months ended 30 June 2014 was NOK 28,012,439 compared to
NOK 6,834,760 for the six months ended 30 June 2013, an increase in net cash outflow of NOK 21,177,679. This
increase was primarily attributable to increase in clinical trial expenses and increased organization.
47
Nordic Nanovector AS – Prospectus
Year ended 31 December 2013 compared to year ended 31 December 2012
Net cash outflow from operating activities for the year ended 31 December 2013 was NOK 14.2 million compared to
NOK 10.8 million for the year ended 31 December 2012, an increase of NOK 3.4 million. The increase was primarily
attributable to increased organization, increase in clinical trial expenses and production of the antibody HH1 (a
component in BetalutinTM) for the year in 2013. The increase in clinical trial expenses and expanded organization is
reflected in the loss of the period.
10.8.5
Cash flows from/(used in) investing activities
Six months ended 30 June 2014 compared to the six months ended 30 June 2013
Net cash outflow for investing activities for the six months ended 30 June 2014 was NOK 444,792 compared to NOK 0
for the six months ended 30 June 2013, an increase in net cash outflow of NOK 444,792. The increase was primarily
attributable to providing additional staff with necessary computers and equipment.
Year ended 31 December 2013 compared to year ended 31 December 2012
Net cash outflow from investing activities for the year ended 31 December 2013 was NOK 0.3 million compared to
NOK 0.1 million for the year ended 31 December 2012, an increase of NOK 0.2 million. The increase was primarily
attributable to investment in fixed assets in relation to moving into new offices.
10.8.6
Cash flows from/(used in) financing activities
Six months ended 30 June 2014 compared to the six months ended 30 June 2013
Net cash inflow for financing activities for the six months ended 30 June 2014 was NOK 535,000 compared to
NOK 62.2 million for the six months ended 30 June 2013, an increase of NOK 61.7 million. The increase was primarily
attributable to a successful rights issue in May 2014.
Year ended 31 December 2013 compared to year ended 31 December 2012
Net cash inflow from financing activities for the year ended 31 December 2013 was NOK 87.4 million compared to
NOK 0.1 million for the year ended 31 December 2012, an increase of NOK 87.3 million. The increase was primarily
attributable to a rights issue of gross proceeds of NOK 64 million in May 2013 and a convertible loan from HealthCap
of NOK 25 million in September 2013.
10.9
Contractual cash obligations and other commitments
The Company does not have any material contractual cash obligations or other commitments as of the date of this
Prospectus.
10.10
Investments
10.10.1
Principal investment in progress and planned principal investments
There are no significant investments in progress. Costs associated with the development of the Company’s products
are ordinary research and development costs, expensed as they are incurred. The Company finances the current costs
related to R&D with equity and government grants. See Section 8.10.3 “Research and development expenses” for
more information regarding the Company’s expenses related to current and historical research and development
activities.
The Company does not have any other investment plans, firm commitments or obligations to make significant future
investments in tangible or intangible assets, or financial assets. However, the Company may modify its plans in the
future to address, among others, changes in market conditions for its products and changes in the competitive
conditions.
10.10.2
Principal historical investments
Historical investments relate to R&D costs in connection with the development of BetalutinTM. Costs of obtaining and
maintaining patents are also included in the R&D costs.
48
Nordic Nanovector AS – Prospectus
The table below shows the principal historical capital expenditures and investments of the Company for the years
ended 31 December 2013 and 2012.
Year ended
In NOK
31 December
2013
2012
(unaudited)
(unaudited)
Office equipment ...........................................................................................
152,620
Permanent building fixtures .............................................................................
66,866
34,526
0
Laboratory equipment ....................................................................................
59,060
0
Furniture and fittings ......................................................................................
17,731
43,515
Total .............................................................................................................
296,277
78,041
In 2013, all R&D costs for the Company were expensed and amounted to NOK 17,806,730, of which all was directed
towards the BetalutinTM project.
In 2012 R&D costs for the Company were expensed and amounted to NOK 10,823,393, of which all was directed
towards the BetalutinTM project.
There have been no principal investments since the date of the Financial Statements as of, and for the year ended, 31
December 2013, which has been included in this Prospectus as Appendix B.
10.11
Related party transactions
The Company has entered into the following related party transactions:
Incubator services agreement with Sciencons AS
The Company has entered into an incubator service agreement dated 4 May 2011 (with amendments made 9 July
2014) with Sciencons AS, a wholly-owned company of the Chairman of the Board of Directors, Roy Hartvig Larsen.
Pursuant to the agreement, the Company offers an office and laboratory space and related infrastructure, as well as
assistance from lab coordinators and access to the Company’s secretary workforce on an hourly basis. Furthermore,
the employees of Sciencons AS shall be trained in routines and shall take part in the Company’s laboratory quality
system. As consideration for the services rendered under the agreement, Sciencons AS pays NOK 6,337 per month to
the Company.
Incubator service agreement with Oncoinvent AS
The Company has entered into an incubator service agreement with Oncoinvent AS dated 4 May 2011 (with
amendments made 9 July 2014), a company which the Chairman of the Board of Directors, Roy Hartvig Larsen, holds
52.55% of the shares (directly and indirectly through Sciencons AS). The Company offers two offices and laboratory
space and infrastructure in relation to this. Pursuant to the agreement, the Company offers an office and laboratory
space and related infrastructure, as well as assistance from lab coordinators and access to the Company’s secretary
workforce on an hourly basis. Furthermore, the employees of Oncoinvent AS shall be trained in routines and shall take
part in the Company’s laboratory quality system. As consideration for the services rendered under the agreement,
Oncoinvent AS pays NOK 19,010 per month for this service.
Services rendered by chairman of the Board of Directors, Roy Hartvig Larsen
Roy Hartvig Larsen, the Chairman of the Board of Directors, was paid NOK 322,608 for services related to work in
relation to the Private Placement for the Company during Q2 2014 and NOK 113,750 (excl. VAT) for services related to
patent applications for the Company in 2013 and NOK 0 in 2012.
Details of related party transactions:
(In NOK)
Sales (included in
Purchases (included in
Sales (included in
Purchases (included in
revenue):
operating expenses):
revenue):
operating expenses):
Q2 2014
Q2 2013
Q2 2014
Q2 2013
2013
2012
2013
2012
286,983
125,000
341,988
266,869
Companies
controlled by the
chairman of the
Board of Directors
234,227
72,697
322,608
0
49
Nordic Nanovector AS – Prospectus
10.12
No off-balance sheet arrangements
The Company has not entered into and is not a party of any off-balance sheet arrangements.
10.13
Trend information
The Company has not experienced any changes or trends that are significant to the Company between 31 December
2013 and the date of this Prospectus, nor is the Company aware of such changes or trends that may or are expected
to be significant to the Company for the current financial year.
10.14
Significant changes
On 20 May 2014, the Company’s lead product candidate, BetalutinTM had been granted orphan-drug designation for
treatment of follicular lymphoma in the USA by FDA’s Office of Orphan Products Development (“OOPD”). Such orphandrug designation will provide the Company with several advantages, including reduced costs related to the clinical
development program, as well as commercial exclusivity for seven years once the product reaches the market. On
10 June 2014, the Company received such orphan-drug designation in Europe by the EMA and the European
Commission (“EC”). The Company will receive several advantages in Europe, including reduced costs related to the
clinical development program and commercial exclusivity for ten years once the product reaches the market in Europe.
On 24 May 2014, the conversion of a convertible loan in the amount of NOK 25,000,005 was registered in the
Norwegian Register of Business Enterprises. The convertible loan was made available to the Company pursuant to a
Subscription Agreement (the “Subscription Agreement”) entered into with HealthCap on 26 September 2013. The
conversion price for the convertible loan was NOK 15 per share, and the Company issued 1,666,667 new shares to
HealthCap. See Section 12.5 “Authorisation to increase the share capital and to issue Shares” for more information
regarding the conversion of the convertible loan. HealthCap shall pursuant to the Subscription Agreement make an
additional investment in the Company of NOK 25,000,000 by subscribing to new Shares at a price of NOK 15 no later
than 15 October 2014. The Board of Directors has been granted an authorisation to issue 1,666,666 new Shares to
HealthCap for a price of NOK 15 per Share. See Section 12.5 “Authorisation to increase the share capital and to issue
Shares” for more information regarding the Board of Directors’ authorisation to issue Shares to HealthCap.
The Company, with assistance from the Managers invited certain existing shareholders as well as certain new
institutional and professional investors to participate in a bookbuilding process in the Private Placement. The
bookbuilding period lasted from 6 June 2014 and until 17 June 2014. On the basis of orders received in the
bookbuilding process the Board of Directors allocated 10,000,000 new Shares at a price of NOK 25 per Share, raising
NOK 250 million in gross proceeds, subject to the approval of the general meeting. The general meeting of the
Company approved the Private Placement on 27 June 2014. See Section 14.2 “The Private Placement” for more
information regarding the Private Placement.
Except from the above mentioned matters, there have been no significant changes in the financial or trading position
of the Company since date of the Interim Financial Information, which have been included in this Prospectus.
50
Nordic Nanovector AS – Prospectus
11
BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE
11.1
Introduction
The General Meeting is the highest authority of the Company. All shareholders in the Company are entitled to attend
and vote at General Meetings of the Company and to table draft resolutions for items to be included on the agenda for
a General Meeting.
The overall management of the Company is vested in the Company’s Board of Directors and the Company’s
Management. In accordance with Norwegian law, the Board of Directors is responsible for, among other things,
supervising the general and day-to-day management of the Company’s business ensuring proper organisation,
preparing plans and budgets for its activities ensuring that the Company’s activities, accounts and assets management
are subject to adequate controls and undertaking investigations necessary to perform its duties.
The Management is responsible for the day-to-day management of the Company’s operations in accordance with
Norwegian law and instructions set out by the Board of Directors. Among other responsibilities, the Company’s chief
executive officer, or CEO, is responsible for keeping the Company’s accounts in accordance with existing Norwegian
legislation and regulations and for managing the Company’s assets in a responsible manner. In addition, the CEO must
according to Norwegian law brief the Board of Directors about the Company’s activities, financial position and
operating results at a minimum of one time per month.
11.2
The Board of Directors
11.2.1
Overview of the Board of Directors
The Company’s Articles of Association provide that the Board of Directors shall consist of a minimum of three and a
maximum of nine Board Members. The current Board of Directors consist of eight Board Members, as listed in the
table below.
The Board of Directors is in compliance with the independence requirements of the Norwegian Code of Practice for
Corporate Governance dated 23 October 2012 (the “Corporate Governance Code”), meaning that (i) the majority of
the shareholder-elected members of the Board of Directors is independent of the Company’s executive management
and material business contacts, (ii) at least two of the shareholder-elected members of the Board of Directors are
independent of the Company’s main shareholder, and (iii) no members of the Company’s executive management are
on the Board of Directors.
Except from Björn Ingemar Odlander who is the managing partner of HealthCap, all Board Members are independent
of the Company’s significant business relations and large shareholders (shareholders holding more than 10% of the
Shares in the Company).
The Company’s registered office address at Kjelsåsveien 168 B, N-0884 Oslo, Norway serves as c/o addresses for the
Board Members in relation to their directorships of the Company.
11.2.2
The Board of Directors
The names and positions of the Board Members are set out in the table below.
Name
Position
Served since
Term expires
July 2009
AGM 2015
Jonas Einarsson .......................... Board member
20 October 2010
AGM 2015
0
Olav Steinnes ............................. Board member
2 July 2009
AGM 2015
0
Alexandra Morris2 ....................... Board member
12 June 2013
AGM 2015
63,520
Theresa Comiskey Olsen .............. Board member
12 June 2013
AGM 2015
18,000
Bente-Lill Bjerkelund Romøren ...... Board member
12 June 2013
AGM 2015
6,000
Ludvik Sandnes3 ......................... Board member
12 June 2013
AGM 2015
81,000
Björn Ingemar Odlander .............. Board member
26 September 2013
AGM 2015
0
Roy Hartvig Larsen1 .................... Chairman
1
Roy Larsen holds 1,741,949 shares in the Company, of which 1,162,000 are held through Sciencons AS.
2
Alexandra Morris holds 63,520 shares in the Company, of which 57,520 are held through Gordito AS.
3
Ludvik Sandnes holds 81,000 shares in the Company, of which 75,000 are held through Ekornhuset AS.
51
Shares
1,741,949
Nordic Nanovector AS – Prospectus
11.2.3
Brief biographies of the Board Members
Set out below are brief biographies of the Board Members, including their relevant management expertise and
experience, an indication of any significant principal activities performed by them outside the Company and names of
companies and partnerships of which a Board Member is or has been a member of the administrative, management or
supervisory bodies or partner the previous five years.
Roy Hartvig Larsen (PhD), Chairman
Dr. Larsen was one of the founders of Anticancer Therapeutic Invention AS (later Algeta ASA) and inventor of more
than 10 classes of patents/patent applications, including those related to Algeta’s radium-223 and Thorium-227
technology. He is author of more than 50 peer reviewed papers in scientific journals and with a Ph.D. and postdoctoral
experience in radiopharmaceutical chemistry from University of Oslo, Norway and Duke University, Durham, NC, USA,
respectively. He served as Managing Director and later Chief Scientific Officer in Algeta from 1997-2006, where he also
was a Board Member from 1997-2003. He was one of the founders of and the Chairman of the board of Nordic
Nanovector AS from 2009. Dr. Larsen is a Norwegian citizen, and resides in Oslo Norway.
Current directorships and senior management positions....... Oncoinvent AS (chairman) and Sciencons AS (managing director, founder
and chairman).
Previous directorships and senior management positions
last five years ............................................................... Nordic Nanovector AS (board member), Oncoinvent AS (board member)
and Sciencons Limited36 (managing director).
Olav Steinnes (M.Sc.), Board member
Mr. Steinnes is the CFO of Inven2 AS, the technology transfer organization for the University of Oslo and Oslo
University Hospital, Mr. Steinnes has extensive experience from the in-vitro diagnostics industry. He has held various
management positions within finance, marketing and business development in companies like Nycomed ASA and AxisShield Plc. Mr. Steinnes holds an M.Sc in Business Administration from Norwegian School of Economics and Business
Administration, NHH. Mr. Steinnes is a Norwegian citizen, and resides in Norway.
Current directorships and senior management positions....... Inven2 AS (CFO), OstomyCure (Board Member), Odin Therapeutics AS
(chairman), Qotics AS (chairman), AIMS Innovation AS (deputy board
member), Cgene AS (board member), SkiFlex AS (CEO) and SkiFlex AS
(chairman).
Previous directorships and senior management positions
last five years ............................................................... Medinnova AS (CEO), Inven2 AS (CEO), Nordic Nanovector AS (CEO),
Healthy Pointers AS (board member), Mole Genetics AS (board member),
Serodus ASA (board member), Neorad AS (board member), Simsurgery
AS (board member), Setred AS (cairman), Cell Holding AS (chairman)
and Alertis Medical AS (board member)
Jónas Einarsson (M.D.), Board member
Dr. Einarsson is the CEO of the Norwegian Radium Hospital Research Foundation. The Norwegian Radium Hospital
Research Foundation is an experienced pre-seed investor and project developer focused on cancer. Dr. Einarsson has
worked as Chief Regional Medical Officer in Norway and was responsible for building Norway’s first private hospital
institution, Oslo Private Hospital. Einarsson sits on the board of several Norwegian Biotech companies, and was one of
the initiators behind the Norwegian Center of Expertise, Oslo Cancer Cluster. Dr. Einarsson holds a MD from the
University of Oslo. Dr. Einarsson is a Norwegian citizen, and resides in Oslo, Norway.
Current directorships and senior management positions....... Norwegian Radium Hospital Research Foundation (CEO).
Previous directorships and senior management positions
last five years ............................................................... Oslo Cancer Cluster (chairman).
Ludvik Sandnes, Board member
Mr. Sandnes is an Investment Director in Norfund. Ludvik Sandnes has more than 30 years of experience from
international corporate finance and investment banking as Executive Director and as strategic advisor from The Royal
Bank of Scotland, BDO Noraudit, PwC Financial Advisors, Christiania Bank, UNI Storebrand, Orkla Borregaard, Den
Norske Credtibank and Statoil. He has a Bachelor of Commerce and a degree as Certified European Financial Analyst
(AFA) from the Norwegian School of Economics and Business Administration, NHH. Mr. Sandnes is chairing Nordic
Nanovector’s Equity Capital Committee. Mr. Sandnes is a Norwegian citizen, and resides in Bærum, Norway.
36
Sciencons Limited transferred its assets and contracts to the newly established company Sciencons AS in July 2014. Sciencons AS is
the wholly-owned company of the Chairman of the Company.
52
Nordic Nanovector AS – Prospectus
Current directorships and senior management positions....... Pioner Fonds AS (board member).
Previous directorships and senior management positions
last five years ............................................................... Banco Terra (Mozambique) (board member), Norsad Finance Limited
(board member), RBS Norwegian Branch (executive director), Nordisk
Renting AS (board member) and Airside Properties Norway AS (board
member).
Theresa Comiskey Olsen, Board member
Ms. Comiskey Olsen is an Attorney-at-Law (USA) in private practice through the Comiskey Olsen law firm. T. Comiskey
Olsen has more than 20 years of legal experience in the pharmaceutical/life sciences field, with special emphasis on
negotiating and drafting international licensing agreements. Prior to setting up her own law firm, she was General
Counsel and Company Secretary of the Nycomed Group. Comiskey Olsen is currently a Member of the Board of PCI
Biotech Holding ASA and Calpro AS. She holds a Bachelor of Arts degree from the University of Pennsylvania and a
Juris Doctor degree from the University of Detroit Mercy School of Law. Ms Comiskey Olsen is a U.S. citizen and
resides in Norway.
Current directorships and senior management positions....... PCI Biotech Holding ASA (board member), Calpro AS (board member),
FF Bygg (board member) and Vedlikehold AS (board member), Jotunfjell
AS (board member) and Bio Medisinsk Innovasjon AS (deputy board
member).
Previous directorships and senior management positions
last five years ............................................................... Serodus ASA (board member), Nattopharma ASA (board member), Camo
ASA (board member), Aqua biotechnology ASA (board member), Calpro
Diagnostics Inc. (board member), Medsafe ASA (board member) and
Magnus Innovasjon AS (CEO).
Alexandra Morris, Board member
Ms. Morris is a Senior Portfolio Manager at Odin Fund Management. Ms Morris has 12 years’ international experience
from the pharmaceutical industry, as well as 13 years in corporate finance and investment banking with focus on the
Pharma / medtech sectors (Hafslund Nycomed, Pareto Securities, Christiania Markets and Amersham plc). Ms. Morris
is currently a Board Member in Finansmarkedsfondet and is chair of the nomination committee in Kongsberg Gruppen.
Ms. Morris holds a Lic.oec HSG from Universitaet St.Gallen, Switzerland and is an Authorized Financial Analyst (AFA).
Ms. Morris is a U.S and Norwegian citizen, and resides in Oslo, Norway.
Current directorships and senior management positions....... Odin Fund Management (senior portfolio manager), Kongsberg Gruppen
(chair of nomination committee), Anthon B. Nilsen AS (board member),
Finansmarkedsfondet (board member) and Gordito AS (chairman).
Previous directorships and senior management positions
last five years ............................................................... Pronova Biopharma (member of the nomination committee).
Bente-Lill B. Romøren, Board member
Ms. Romøren is a consultant with 36 years of experience from different national and international senior positions from
Novo Nordisk Scandinavia AS. She has a M.Sc. in chemistry. Romøren is currently Board Member in Targovax and
Radiumhospitalets Forskningsstiftelse, chairman of Farmastat and Photocure and chairman of the Ski Jumping
Committee in Trondheim. Ms. Romøren holds an MSc in chemistry from The Norwegian Institute of Technology in
Trondheim. Ms. Romøren is a Norwegian citizen, and resides in Bærum, Norway.
Current directorships and senior management positions....... Targovax (board member), Farmastat (chairman) and Radiumhospitalets
Forskningsstiftelse (board member), Ski Jumping Committee of the
Norwegian Ski Association (president) and Photocure AS (chairman).
Previous directorships and senior management positions
last five years ............................................................... Novo
Nordisk
Scandinavia
AS
(managing
director),
Ski
Jumping
Committee of the Norwegian Ski Association (vice president) and
Kontrollutvalget in The Norwegian Ski Association (Norges Skiforbund).
Dr. Bjørn Odlander, Board member
Dr. Odlander is the founding and managing partner of HealthCap. Dr. Odlander is a Medical Doctor and previously
headed the ABB Aros Health Care Equity Research Team. Prior to joining Aros in 1992, he was active at the Karolinska
Institute pursuing scientific research in the biochemistry of inflammation. In 1990 he published his thesis, rendering
him a PhD degree in Medical Chemistry. He has lectured at several international scientific congresses and is author of
19 scientific papers and of several book chapters. Dr. Odlander is currently the Chairman of HealthCap AB and several
other HealthCap entities. He is also on the Board of Directors of, inter alia, HealthCap Advisor AB, Bone Support AB,
53
Nordic Nanovector AS – Prospectus
Cardoz AB, LTB4 Sweden AB and NVC Holding AB, as well as an observer to the Board of Directors of PulmonX
Corporation. He is a former Director of several listed, as well as unlisted biomedical companies including Biotage AB,
Jerini AG, NicOx SA, Q-Med AB and Wilson Therapeutics. Dr. Odlander holds a Ph.D degree in Medical Chemistry from
Karolinska Institute. Dr. Odlander is a Swedish citizen, and resides in Stockholm, Sweden
Current directorships and senior management positions....... Odlander Fredrikson & Co AB (managing director and board member),
OFP V Advisor AB (managing director), HealthCap AB (chairman) and
chairman of various other subsidiaries of HealthCap, Hydrargyr AB (board
member) LTB4 Sweden AB (board member), Cardox AB (board member),
CashCap Aktiebolag (board member), CC10 Sweden AB (board member),
Douvelle AB (board member), Reel Ventures AB (board member),
Glionova AB (nestleder), Oxthera AB (board member), NVC Holding AB
(board
member),
Bostadsrättsföreningen
Bone
Support
Rosenborghuset
AB
(board
(nestleder),
member),
Bone
Support
Holding AS (board member) and PulmonX Corporation (observer of the
board of directors).
Previous directorships and senior management positions
last five years ............................................................... Wilson Therapeutics AB (board member), MGF Fastighetsaktiebolag
(board member), Faucon AB (board member), Rocaer AB (board
member) and Affibody Medical AB (board member).
11.3
Management
11.3.1
Overview
The Company’s management team consists of five individuals. The names of the members of Management as of the
date of this Prospectus, and their respective positions, are presented in the table below:
Employed with
the Company
Name
Current position within the Company
since
Shares
Jan A. Alfheim1 ......................... Chief Executive Officer
1 August 2011
Bjørg Bolstad ........................... Chief Clinical Officer
1 January 2011
32,000
Jostein Dahle ........................... Chief Scientific Officer
1 January 2011
268,358
Anniken Hagen ......................... Head of Quality Assurance and Regulatory Affairs
8 August 2012
34,837
Tone Kvåle .............................. Chief Financial Officer
11 November 2012
31,761
1
64,334
With effect from 1 September 2014, Mr. Luigi Costa shall commence as CEO of the Company. Mr. Costa holds 64,000 Shares in the Company.
The Company’s registered office address at Kjelsåsveien 168 B, N-0884 Oslo, Norway, serves as c/o address for the
members of Management in relation to their employment with the Company.
11.3.2
Brief biographies of the members of Management
Set out below are brief biographies of the members of Management, including their relevant management expertise
and experience, an indication of any significant principal activities performed by them outside the Company and names
of companies and partnerships of which a member of Management is or has been a member of the administrative,
management or supervisory bodies or partner the previous five years.
Jan A. Alfheim – Chief Executive Officer
Mr. Alfheim has more than 25 years of experience in the healthcare and chemical industries. Before joining Nordic
Nanovector, he worked for the Norwegian cancer drug development company, Clavis Pharma ASA, as Chief Business
Officer and a member of the senior management team. Prior to joining Clavis, Mr. Alfheim spent seven years in the
biotech industry in Canada where he held the positions of Director of Business Development at Neurochem Inc and
President of Stempath Inc. He holds a M.Sc. in chemistry from Concordia University (1985) and a MBA from McGill
University (2002) in Montreal.
Current directorships and senior management positions................. Previous directorships and senior management positions last five
years ..................................................................................... Canadian Norwegian Business Association (board member), Clavis
Pharma ASA (chief business officer) and Norsk Biotekforum (board
member).
54
Nordic Nanovector AS – Prospectus
Bjørg Bolstad – Chief Clinical Officer
Ms. Bolstad has more than 23 years of experience in the pharmaceutical industry. As well as being closely involved in
cross-functional development, she has worked mainly in the clinical area, gaining experience from all phases of clinical
studies and many geographical areas. She has been involved with developing clinical documentation for regulatory
applications including IND, NDA and MAA. Prior to joining Nordic Nanovector, she was employed as Director Clinical
Research in Algeta ASA for 7 years, and was responsible for clinical phase II and III studies in Algeta’s core project.
Before this, Ms. Bolstad held a position at Photocure ASA for 3 years with responsibility for the company’s clinical
studies in the US. Previously, Ms. Bolstad was 10 years in Nycomed Imaging (now GE Healthcare) responsible for
international clinical studies. Ms. Bolstad holds a M.Sc. in physiology from the University of Oslo (1987).
Current directorships and senior management positions................. Previous directorships and senior management positions last five
years ..................................................................................... Algeta ASA (senior management position).
Jostein Dahle – Chief Scientific Officer
Dr. Dahle has more than 15 years of experience in cancer research. He has previously been CEO of Nordic Nanovector
and leader of the Radioimmunotherapy group at Institute for Cancer Research at the Norwegian Radium Hospital. He
holds a Ph.D. in radiation biology from University of Oslo (2000) and a M.Sc. in biophysics from Norwegian University
for Science and Technology in Trondheim (1995). Dr. Dahle is one of the inventors of Betalutin and has published
more than 45 papers in the field of cancer and biotechnology.
Current directorships and senior management positions................. Previous directorships and senior management positions last five
years ..................................................................................... Nordic Nanovector (CEO and co-founder), Radioimmunotherapy
group (group leader), Institute for Cancer Research, Norwegian
Radium Hospital 2005-2010 and Forskerforbundet at OUS (board
member).
Anniken Hagen – Head of Quality Assurance and Regulatory Affairs
Ms. Hagen has more than 20 years of experience from the pharmaceutical industry and most of these within
radiopharmacy. In her previous position, she was Head of QA and responsible for building facilities and QMS for GMP
manufacturing of positron emission radiopharmaceuticals (PET) at Oslo University Hospital. The organization achieved
manufacturing license under her management and she was QP for the manufacturing activities. Previously Ms. Hagen
worked in Algeta ASA as QC manager and was also a part of the team compiling documentation for regulatory
applications including IND application. From a prior employer, Pronova Biomedical AS, she also has experience with
drug delivery systems for among others, anticancer therapeutics. Ms. Hagen is a trained chemist and earned a Cand.
Scient. and Cand. Mag. in radiochemistry from the University of Oslo.
Current directorships and senior management positions................. Previous directorships and senior management positions last five
years ..................................................................................... Oslo University Hospital (senior management position), Norsk
Medisinsk Sykdomssenter AS (senior management position) and
Algeta ASA (senior management position).
Tone Kvåle – Chief Financial Officer
Tone Kvåle has more than 16 years of experience from the biotech industry. Prior to joining Nordic Nanovector, she
was employed as CFO in NorDiag ASA. In addition, she has held senior management positions at Kavli Holding AS,
Invitrogen/Life Technologies, US and Dynal Biotech AS. She is currently a board member of Badger Explorer ASA,
which is registered on the Oslo Stock Exchange (ticker: BXPL). Tone Kvåle has a diploma in Finance & Administration
from Harstad University College (1990).
Current directorships and senior management positions................. Badger Explorer ASA (board member).
Previous directorships and senior management positions last five
years ..................................................................................... NorDiag ASA (CFO).
Luigi Costa – Chief Executive Officer (with effect from 1 September 2014)
Mr. Costa has more than 20 years of experience in the international pharmaceuticals and biotech industry. Previously,
he held the position of vice president of Europe, Middle East and Africa for Onyx Pharmaceuticals, a global
biopharmaceutical company based in San Francisco, California. Mr. Costa was responsible for the startup of the
company’s international organisation and for the prelaunch and launch of its hematology drug, Kyprolis, in over fifty
countries outside the USA. Prior to joining Onyc Pharmaceuticals, he spent eight years with Amgen holding leading
55
Nordic Nanovector AS – Prospectus
management positions including head of International Oncology Franchise and general manager of Italy and France.
He has also held various positions with Eli Lilly. He holds a BSc in Business Administration from the University of
Parma and an MBA from SDA Bocconi in Milan. Mr. Costa is an Italian citizen who resides in Switzerland.
Current directorships and senior management positions.................
Previous directorships and senior management positions last five
years ..................................................................................... Onyx
Pharmaceuticals
(head
of
International),
Amgen
Italy
(managing director) and Amgen France (managing director).
11.4
Remuneration and benefits
11.4.1
Remuneration of the Board of Directors
No remuneration was paid to the Board of Directors in 2013. In the Extraordinary General Meeting held on 26
September 2013, it was resolved that the following Board Members would receive shares as compensation for 2013:
Vidar Hansson, Alexandra Morris, Theresa Comiskey Olsen, Bente-Lill B. Romøren and Ludvik Sandnes. Each Board
Member was awarded 6,000 shares at the nominal value per share of NOK 0.20 each. This represents a benefit of NOK
14.80 per share and a total of NOK 444,000 was expensed in the third quarter of 2013 (Financial Statement 2013
IFRS) as the shares were issued in October 2013.
11.4.2
Remuneration of Management
The total remuneration paid to the members of the Management in 2013 was NOK 5,228,766. The table below sets out
the remuneration of the Management in 2013.
Name
Salary
Jan A. Alfheim1, CEO
Other remuneration
Pensions costs
1,283,616
50,000
71,892
Tone Kvåle, CFO
940,933
7,694
79,296
Bjørg Bolstad, CCO
857,007
19,422
63,036
Jostein Dahle, CSO
862,844
57,985
53,376
Anniken Hagen, Head of QA and RA
784,279
38,190
59,196
1
Effective from 1 September 2014, Mr. Costa shall commence as managing director of the Company. He will be entitled to an
annual salary of CHF 375,000. In addition, Mr. Costa will be eligible for a target performance bonus for up to 40% of the annual
base salary if certain targets set by the Board of Directors are met.
11.5
11.5.1
Share option program
Overview
In order to strengthen the common interests between the employees and the Company’s shareholders, the Board of
Directors has received an authorisation by the General Meeting to facilitate a share option program directed towards
the Company’s employees. The authorisation is up to 10% of the share capital of the Company following HealthCap’s
investment in the second tranche in the amount of NOK 25 million, but prior to the Private Placement and the
Subsequent Offering. See Section 12.5 “Authorisation to increase the share capital and to issue Shares”.
The Company has granted share options to its employees in two different rounds. The first round was granted in 20112012 and the second round was granted in 2014. Each share option may be converted into one ordinary Share of the
Company on exercise. The options are equity-settled, provided, however, that the Company may elect to settle
options in cash. Other than the share option program described below in this Section, there are no other share option
programs or arrangements in place for any employee of the Company.
56
Nordic Nanovector AS – Prospectus
11.5.2
First round option program
The following options were granted under the first round option program to both Management and employees:
Grant
Exercise price
Expiry date
date
Number of options
Granted on 5 July 2011 .................................................. 150,000
(NOK)
5 Jul 2011 15 Jan 2015
2 Feb 2012
6.25
Granted on 2 February 2012 ..........................................
90,000
2 Feb 2016
6.75
Granted on 12 April 2012 ..............................................
40,000 12 Apr 2012 12 Apr 2016
6.75
Granted on 17 April 2012 ..............................................
15,000 17 Apr 2012 17 Apr 2015
6.75
Granted on 11 October 2012 ..........................................
50,000 11 Oct 2012 11 Oct 2016
6.75
The options vest in three steps at milestones that are significant to the responsibilities of the employee. Generally 1/3
vests immediately upon grant, the remaining 2/3 vested in two portions (1/3 each time) at the achievement of defined
milestones. Options may be exercised twice a year, either in the period from 15 January to 15 February or 1 August to
15 September each year from the date of vesting until expiry. As of the date of the Prospectus, 20,000 options have
been granted to the Company’s employees and are included in the table above.
The following members of the Management received options in the first round option program:
Exercise
Number of options
Grant date
outstanding
Expiry
price (NOK)
2013
2012
Jan A. Alfheim (CEO) .....................................................
90,000
90,000
2 Feb 2012
2 Feb 2016
6.75
Jostein Dahle (CSO) ......................................................
40,000
60,000
5 Jul 2011
15 Jan 2015
6.25
Anniken Hagen (Head of QA and RA) ...............................
13,333
40,000
12 Apr 2012
12 Apr 2016
6.75
Tone Kvåle (CFO) .........................................................
30,000
30,000
11 Oct 2012
11 Oct 2016
6.75
5 Jul 2011
15 Jan 2015
6.25
Bjørg Bolstad (CCO) ......................................................
60,000
60,000
Total ...........................................................................
233,333
280,000
11.5.3
Second round option program
The following options are outstanding under the second round option program:
Exercise
Number of options
Grant
Expiry
price
date
date
(NOK)
Granted on 9 July 2014 ................................................. 43,800 9 Jul 2014 9 July 2021 25
The options vest in accordance with the following schedule: (i) 25% of the options shall vest on 15 January 2015, and
(ii) 1/36 of the remaining options shall vest each month thereafter with the first 1/36 vesting on 15 February 2015.
Furthermore, Mr. Luigi Costa will be granted maximum of 868,106 options in the Company. Each option gives the Mr.
Costa the right, but not the obligation, to subscribe for or purchase (at Group’s choice) one ordinary share in the
Company with a nominal value of NOK 0.20 at the exercise price of NOK 25. The options vest in accordance with the
following schedule: (i) 25% of the options shall vest 12 months after grant date, and (ii) 1/36 of the remaining options
shall vest each month thereafter with the first 1/36 vesting 13 months after initial grant.
The options may be exercised when having vested provided that a liquidity event has occurred. For the purpose of the
option program, a liquidity event means a listing of the Shares of the Company on Oslo Stock Exchange or another
regulated market, or a sale of the Company. The options expire seven years from grant date.
As of the date of this Prospectus, no Board Members or members of the Management, except from Luigi Costa, have
been issued options in the second round option program.
57
Nordic Nanovector AS – Prospectus
11.6
Benefits upon termination
No employee, including any member of Management, has entered into employment agreements which provide for any
special benefits upon termination, except for the newly appointed CEO, Luigi Costa, who has fifteen months’ pay and
the accrued target performance bonus up until the date notice of termination of employment, the current CEO has
three months’ pay after termination of employment and the CFO who has six months pay after termination of
employment in connection with an acquisition of the Company. None of the Board Members or members of the
nomination committee have service contracts and none will be entitled to any benefits upon termination of office.
11.7
Pensions and retirement benefits
For the year ended 31 December 2013, the costs of pensions for members of Management were NOK 326,796. The
Company has no pension or retirement benefits for its Board Members.
For more information regarding pension and retirement benefits, see note 6 to the Financial Statements for the year
ended 31 December 2013, included as Appendix B.
11.8
Loans and guarantees
The Company has not granted any loans, guarantees or other commitments to any of its Board Members or to any
member of Management.
11.9
Employees
As of the date of this Prospectus, the Company has 14 employees37. The table below shows the development in the
numbers of full-time employees over the last two years by geographical location and main category of activity.
Year ended 31 December
2012
2013
Total Company ....................................................................................................
8
7
8
7
By geographic region:
- Norway ...........................................................................................................
By main category of activity:
- Clinical ............................................................................................................
2
1
- Research and Development ................................................................................
3
3
- QA/Regulatory Affairs ........................................................................................
1
1
- Administrative ..................................................................................................
2
2
The table below shows the numbers of employees by geographical location and main category of activity as of the date
of this Prospectus.
As of the date of the Prospectus
Total Company38 .................................................................................................
14
By geographic region:
- Norway39 .........................................................................................................
14
By main category of activity:
- Clinical ............................................................................................................
4
- Research and Development ................................................................................
6
- QA/Regulatory Affairs ........................................................................................
1
- Administrative40 ...............................................................................................
3
37
The Company had 13 full-time employees and one part-time employee working 30%.
38
See footnote 37.
39
See fotnote 37.
40
See footnote 37.
58
Nordic Nanovector AS – Prospectus
11.10
Nomination committee
The Company’s Articles of Association provide for a nomination committee composed of four members. The current
members of the nomination committee are Per Samuelsson (Chairman), Øyvind S. Bruland (B.Sc., M.D., Ph.D.), Egil
Stenshagen and Ole Peter Nordby. The nomination committee is responsible for nominating the shareholder-elected
members of the Board of Directors and make recommendations for remuneration to the members of the Boards of
Directors.
11.11
Clinical advisory board and scientific advisory board
The Company has newly established a clinical advisory board, which has unique competence and experience in
oncology, hematology and nuclear medicine. The clinical advisory board consists of following members: Øyvind S.
Bruland41, M.D., Ph.D., Professor of Clinical Oncology, University of Oslo, Magnus Björkholm, Ph.D., M.D., Professor of
Medicine, Karolinska Institutet, Timothy Martin Illidge, Professor of Targeted Therapy and Oncology and Honorary
Consultant in Oncology, University of Manchester and Christie NHS Trust, Val Lewington, Professor of Clinical
Therapeutic Medicine at King’s College London, Mark Kaminski, M.D., Professor of Hematology/Oncology, University of
Michigan. The responsibilities of the members of the clinical advisory board include the critical review of the
Company’s clinical development programs and advising the Management and the Board of Directors on its technical
efforts.
The current members of the scientific advisory board are the current members of the clinical advisory board including
Michael Lassmann Ph.D., Professor of Medical Physics, University of Würzburg. The scientific advisory board focuses on
giving the Board of Directors and the Management advice in relation to the development of BetalutinTM.
11.12
Corporate governance
The Company has adopted and implemented corporate governance regime which complies with the Corporate
Governance Code.
11.13
Conflicts of interests etc.
Theresa Comiskey Olsen was a board member of Medsafe ASA, a company which was declared bankrupt in 2010. Olav
Steinnes was a board member of Alertis Medical AS, a company which was declared bankrupt in 2009. Mr. Steinnes is
also an employee with Inven2 AS, the largest shareholder in the Company. Other than this, no member of the Board
of Directors and the members of the Management has, or had, as applicable, during the last five years preceding the
date of the Prospectus:

any convictions in relation to fraudulent offences;

received any official public incrimination and/or sanctions by any statutory or regulatory authorities
(including designated professional bodies) or was disqualified by a court from acting as a member of the
administrative, management or supervisory bodies of a company or from acting in the management or
conduct of the affairs of any company; or

been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his or her
capacity as a founder, member of the administrative body or supervisory body, director or senior manager
of a company; or

been selected as a member of the administrative, management of supervisory bodies or member of senior
management of the Company’s major shareholders, customers, suppliers or others.
There are currently no other actual or potential conflicts of interest between the Company and the private interests or
other duties of any of the Board Members and the members of the Management, including any family relationships
between such persons.
41
Øyvind Bruland, is the beneficial owner of and has the right to acquire 125,180 shares in Nordic Nanovector AS from Inven2 AS at an average price of
approximately NOK 3 per share.
59
Nordic Nanovector AS – Prospectus
12
CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL
The following is a summary of certain corporate information and material information relating to the Shares and share
capital of the Company and certain other shareholder matters, including summaries of certain provisions of the
Company’s Articles of Association and applicable Norwegian law in effect as of the date of this Prospectus. The
summary does not purport to be complete and is qualified in its entirety by the Company’s Articles of Association and
applicable law.
12.1
Company corporate information
The Company’s legal and commercial name is Nordic Nanovector AS. The Company is a private limited company
organised and existing under the laws of Norway pursuant to the Norwegian Private Limited Companies Act. The
Company’s registered office and domicile is in the municipality of Oslo, Norway. The Company was incorporated in
Norway on 2 July 2009. The Company’s organisation number in the Norwegian Register of Business Enterprises is 994
297 422, and the Shares are registered in book-entry form with VPS under ISIN NO 0010597883. The Company’s
register of shareholders in VPS is administrated by Nordea Bank Norge ASA, Securities Services – Issuer Services,
Middeltunsgt. 17, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway. The Company’s registered office is located at
Kjelsåsveien 168, N-0884 Oslo, Norway and the Company’s main telephone number at that address is +47 22 18 33
01.
The
Company’s
website
can
be
found
at
www.nordicnanovector.no.
Neither
the
content
of
www.nordicnanovector.no nor any of the Company’s other websites, is incorporated by reference into or otherwise
forms part of this Prospectus.
12.2
Legal structure
The Company is a private limited company incorporated and domiciled in Norway. The Company is not part of a group.
12.3
Share capital and share capital history
As of the date of this Prospectus, the Company’s share capital is NOK 4,564,275 divided into 22,821,375 Shares with
each Share having a nominal value of NOK 0.20. All the Shares have been created under the Norwegian Private
Limited Companies Act, and are validly issued and fully paid.
The Company has one class of shares. Other than the share options described in Section 11.5 “Share option program
”, there are no share options or other rights to subscribe for or acquire Shares issued by the Company. The Company
does not hold any Shares in treasury.
The table below shows the development in the Company’s share capital for the period from 31 December 2011 to the
date hereof:
Change in
Date of registration
Type of change
share capital
Nominal value
New number
New share
(NOK)
(NOK)
of Shares
capital (NOK)
16 January 2012
Share capital increase
106,000
1
106,000
318,317
19 June 2012
Share capital increase
954,951
1
0
1,273,268
19 June 2012
Share split
29 December 2012
Share capital increase
5 June 2013
19 June 2013
25 July 2013
Conversion of convertible loan
25 July 2013
Share capital increase
12 September 2013
31 October 2013
24 February 2014
Share capital increase
24 May 2014
3 July 2014
0
0.2
6,048,023
0
4,000
0.2
20,000
1,277,268
Share capital increase
44,444
0.2
222,220
1,321,712
Share capital increase
810,671.20
0.2
4,053,356
2,132,383.20
60,225.60
0,2
301,128
2,192,608.80
2,000
0.2
10,000
2,194,608.80
Share capital increase
14,332.80
0.2
71,664
2,208,941.60
Share capital increase
6,000
0.2
30,000
2,214,941.60
16,000
0.2
80,000
2,230,941.60
Conversion of convertible loan
333,333.4
0.2
1,666,667
2,564,275.00
Share capital increase
2,000,000
0.2
10,000,000
4,564,275.00
In the period from 31 December 2011 to the date of this Prospectus, and except for the conversion of the NOK 25
million convertible loan in May 2014, no share capital has been paid with assets other than cash.
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Nordic Nanovector AS – Prospectus
12.4
Ownership structure
As of 25 August 2014, the Company had 348 shareholders. The Company’s 20 largest shareholders as of 25 August
2014 are shown in the table below.
#
Shareholders
1
HealthCap VI L.P. .........................................................................
3,466,667
15.19%
2
Inven2 AS1 .................................................................................
1,216,855
5.33%
3
Sciencons AS (Roy Hartvig Larsen) .................................................
1,162,000
5.09%
4
Artic Funds PLC ...........................................................................
960,000
4.21%
5
Storebrand Vekst .........................................................................
800,000
3.51%
6
Linux Solutions Norge AS ..............................................................
730,106
3,20%
7
Radiumhospitalets Forskningsstiftelse .............................................
675,447
2.96%
8
Roy Hartvig Larsen .......................................................................
579,949
2.54%
9
Portia AS ....................................................................................
500,000
2.19%
10
Verdipapirfondet Storebrand Optima ...............................................
482,000
2.11%
11
Must Invest AS ............................................................................
406,800
1.78%
12
Varak AS ....................................................................................
347,487
1.52%
13
Holberg Norge .............................................................................
333,769
1.46%
14
OM Holding AS ............................................................................
310,000
1.36%
15
Canica AS ...................................................................................
300,000
1.31%
16
J.P. Morgan Chase bank (nominee) .................................................
300,000
1.31%
17
Mininaste AS ...............................................................................
300,000
1.31%
18
Storebrand Norge ........................................................................
300,000
1.31%
19
Spar Kapital Investor AS ...............................................................
275,000
1.18%
20
Jostein Dahle ..............................................................................
268,358
1,17%
Others2 ........................................................................................
13,714,438
60.09%
Total ............................................................................................
22,821,375
100%
1
Number of Shares
Percent
Co-founder Jostein Dahle (CSO) has acquired 250,358 shares from Inven2 AS at an average price of approximately NOK 3 per share 14 August 2014,
while inventor Øyvind Bruland (member of the nomination committee, clinical advisory board and scientific advisory board of the Company) is the
beneficial owner of and has the right to acquire 125,180 shares from Inven2 at the same price. Inventor of HH1, Steinar Funderud, is the beneficial
owner of and has the right to acquire 39,137 shares from Inven2 at average price of approximately NOK 1.70 per share. Furthermore, inventor of
HH1, Erlend Smeland, is the beneficial owner of and has the right to acquire 39,137 shares from Inven2 at average price of approximately NOK 1.70
per share.
2
Remaining 328 shareholders.
There are no differences in voting rights between the shareholders.
As of the date of this Prospectus, no shareholder, other than HealthCap (15.19%) Roy Hartvig Larsen (directly and
through his wholly owned company Sciencons AS) (7.63%) and Inven2 AS (5.33%) holds more than 5% or more of
the issued Shares.
In addition, as described in the Company’s press release dated 27 September 2013, 1,666,666 shares will no later
than 15 October 2014 be issued to HealthCap VI L.P. at a subscription price of NOK 15 in connection with the private
placement completed in September 2013.
To the extent known to the Company, there are no persons or entities that, directly or indirectly, jointly or severally,
exercise or could exercise control over the Company. The Company is not aware of any arrangements the operation of
which may at a subsequent date result in a change of control of the Company.
The Company’s Articles of Association do not contain any provisions that would have the effect of delaying, deferring
or preventing a change of control of the Company. The Shares have not been subject to any public takeover bids
during the current or last financial year.
12.5
Authorisation to increase the share capital and to issue Shares
The Board of Directors has been granted an authorisation to increase the share capital by up to NOK 529,760 by the
issuance of 2,648,800 new Shares, corresponding to 10% of the Company’s current share capital following
HealthCap’s investment of their second tranche in the amount of NOK 25 million, but prior to the Private Placement
and issuance of the Subsequent Offering Shares, to be used in connection with the share based incentive program for
the Company’s employees. The authorisation is valid until 26 June 2016. See Section 11.5 “Share option program ” for
more information regarding the Share option program.
In addition, the Board of Directors has been granted an authorisation to increase the share capital by NOK 333,333.20
by issuance of 1,666,666 new Shares, corresponding to 7.30% of the Company’s current share capital, to be used to
61
Nordic Nanovector AS – Prospectus
fulfil the Company’s obligations to issue 1,666,666 new Shares at a subscription price of NOK 15 per Share to
HealthCap pursuant to the Subscription Agreement entered into with HealthCap on 26 September 2013. The
authorisation is valid until 15 October 2014.
The preferential rights of the existing shareholders to subscribe to the new shares pursuant to Section 10-4 of the
Norwegian Private Limited Companies Act may be deviated from by the Board of Directors when using the above
authorisations. The authorisations do not comprise potential share capital increases against contribution in kind or
share capital increases in connection with mergers.
On 27 June 2014, the General Meeting resolved to increase the share capital by minimum NOK 0.20 and maximum
NOK 400,000 by issuing minimum 1 and maximum 2,000,000 new Shares pursuant to the Subsequent Offering,
corresponding to 8.76% of the Company’s current share capital. See Section 14.3 “The Subsequent Offering” for more
information regarding the issuance of new Shares in connection with the Subsequent Offering.
12.6
Other financial instruments
Other than (i) the share options that have been granted by the Company to its employees, see Section 11.5 “Share
option program ”, (ii) the right granted to HealthCap to subscribe to and be allocated 1,666,666 Shares at a
subscription price of NOK 15 per share pursuant to the Subscription Agreement and (iii) the Subscription Rights in the
Subsequent Offering, see Section 14.3 “The Subsequent Offering”, the Company has not issued any warrants,
convertible loans or other instruments that would entitle a holder of any such instrument to subscribe for any shares in
the Company. Furthermore, the Company has not issued subordinated debt or transferable securities other than the
Shares.
12.7
Shareholder rights
The Company has one class of Shares in issue, and in accordance with the Norwegian Private Limited Companies Act,
all Shares in that class provide equal rights in the Company. Each of the Shares carries one vote. The rights attaching
to the Shares are described in Section 12.8 “The Articles of Association and certain aspects of Norwegian law”.
12.8
The Articles of Association and certain aspects of Norwegian law
12.8.1
The Articles of Association
The Company’s Articles of Association are set out in Appendix A to this Prospectus. Below is a summary of provisions
of the Articles of Association.
Objective of the Company
The objective of the Company is to develop, market and sell medical products and equipment and related services in
connection to this.
Registered office
The Company’s registered office is in the municipality of Oslo, Norway.
Share capital and nominal value
The Company’s share capital is NOK 4,564,275 divided into 22,821,375 Shares, each Share with a nominal value of
NOK 0.20.
Board of Directors
The Company’s Board of Directors shall consist of a minimum of three and a maximum of nine Board Members.
Restrictions on transfer of Shares
The Articles of Association do not provide for any restrictions on the transfer of Shares, or a right of first refusal for the
Company. Share transfers are not subject to approval by the Board of Directors.
General meetings
Documents relating to matters to be dealt with by the General Meeting, including documents which by law shall be
included in or attached to the notice of the General Meeting, do not need to be sent to the shareholders if such
documents have been made available on the Company’s internet site. A shareholder may nevertheless request that
documents which relate to matters to be dealt with at the General Meeting are sent to him/her.
62
Nordic Nanovector AS – Prospectus
Nomination committee
The Company shall have a nomination committee. See Section 11.10 “”.
12.8.2
Certain aspects of Norwegian corporate law
General meetings
Through the general meeting, shareholders exercise supreme authority in a Norwegian company. In accordance with
Norwegian law, the annual general meeting of shareholders is required to be held each year on or prior to 30 June.
Norwegian law requires that written notice of annual general meetings setting forth the time of, the venue for and the
agenda of the meeting be sent to all shareholders with a known address no later than one week before the annual
general meeting of Norwegian private limited liability company shall be held, unless the articles of association stipulate
a longer deadline, which is not currently the case for the Company. Pursuant to the Company’s articles of association,
documents relating to matters to be dealt with by the Company’s general meeting, including documents which by law
shall be included in or attached to the notice of the general meeting, do not need to be sent to the shareholders if the
documents are accessible on the Company’s home page. A shareholder may nevertheless request that documents,
which relate to matters to be dealt with by the Company’s general meeting, be sent to him/her.
A shareholder may vote at the general meeting either in person or by proxy appointed at their own discretion.
Although Norwegian law does not require the Company to send proxy forms to its shareholders for general meetings,
the Company plans to include a proxy form with notices of general meetings. All of the Company’s shareholders who
are registered in the register of shareholders maintained with the VPS as of the date of the general meeting, or who
have otherwise reported and documented ownership to Shares, are entitled to participate at general meetings, without
any requirement of pre-registration.
Apart from the annual general meeting, extraordinary general meetings of shareholders may be held if the Board of
Directors considers it necessary. An extraordinary general meeting of shareholders must also be convened if, in order
to discuss a specified matter, the auditor who audits the company’s annual accounts or shareholders representing at
least 10% of the share capital demands this in writing. The requirements for notice and admission to the annual
general meeting also apply to extraordinary general meetings.
Voting rights–amendments to the Articles of Association
Each of the Company’s Shares carries one vote. In general, decisions that shareholders are entitled to make under
Norwegian law or the Company’s Articles of Association may be made by a simple majority of the votes cast. In the
case of elections or appointments, the person(s) who receive(s) the greatest number of votes cast are elected.
However, as required under Norwegian law, certain decisions, including resolutions to waive preferential rights to
subscribe in connection with any share issue in the Company, to approve a merger or demerger of the Company, to
amend Articles of Association, to authorise an increase or reduction in the share capital, to authorise an issuance of
convertible loans or warrants by the Company or to authorise the Board of Directors to purchase the Shares and hold
them as treasury shares or to dissolve the Company, must receive the approval of at least two-thirds of the aggregate
number of votes cast as well as at least two-thirds of the share capital represented at a general meeting. Norwegian
law further requires that certain decisions, which have the effect of substantially altering the rights and preferences of
any shares or class of shares, receive the approval by the holders of such shares or class of shares as well as the
majority required for amending the Articles of Association.
Decisions that (i) would reduce the rights of some or all of the Company’s shareholders in respect of dividend
payments or other rights to assets or (ii) restrict the transferability of the Shares, require that at least 90% of the
share capital represented at the general meeting in question vote in favour of the resolution, as well as the majority
required for amending the Articles of Association. Certain types of changes in the rights of shareholders require the
consent of all shareholders affected thereby as well as the majority required for amending the Articles of Association.
In general, only a shareholder registered in the VPS is entitled to vote for such Shares. Beneficial owners of the Shares
that are registered in the name of a nominee are generally not entitled to vote under Norwegian law, nor is any person
who is designated in the VPS register as the holder of such Shares as nominees. Investors should note that there are
varying opinions as to the interpretation of the right to vote on nominee registered shares. In the Company’s view, a
nominee may not meet or vote for Shares registered on a nominee account (NOM-account). A shareholder must, in
order to be eligible to register, meet and vote for such Shares at the general meeting, transfer the Shares from such
NOM-account to an account in the shareholder’s name. Such registration must appear from a transcript from the VPS
at the latest at the date of the general meeting.
There are no quorum requirements that apply to the general meetings.
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Nordic Nanovector AS – Prospectus
Additional issuances and preferential rights
If the Company issues any new Shares, including bonus share issues, the Company’s Articles of Association must be
amended, which requires the same vote as other amendments to the Articles of Association. In addition, under
Norwegian law, the Company’s shareholders have a preferential right to subscribe for new Shares issued by the
Company. Preferential rights may be derogated from by resolution in a general meeting passed by the same vote
required to approve amending the Articles of Association. A derogation of the shareholders’ preferential rights in
respect of bonus issues requires the approval of all outstanding Shares.
The General Meeting may, by the same vote as is required for amending the Articles of Association, authorise the
Board of Directors to issue new Shares, and to derogate from the preferential rights of shareholders in connection with
such issuances. Such authorisation may be effective for a maximum of two years, and the nominal value of the Shares
to be issued may not exceed 50% of the registered nominal share capital when the authorisation is registered with the
Norwegian Register of Business Enterprises.
Under Norwegian law, the Company may increase its share capital by a bonus share issue, subject to approval by the
Company’s shareholders, by transfer from the Company’s distributable equity or from the Company’s share premium
reserve and thus the share capital increase does not require any payment of a subscription price by the shareholders.
Any bonus issues may be affected either by issuing new shares to the Company’s existing shareholders or by
increasing the nominal value of the Company’s outstanding Shares.
Issuance of new Shares to shareholders who are citizens or residents of the United States upon the exercise of
preferential rights may require the Company to file a registration statement in the United States under United States
securities laws. Should the Company in such a situation decide not to file a registration statement, the Company’s U.S.
shareholders may not be able to exercise their preferential rights. If a U.S. shareholder is ineligible to participate in a
rights offering, such shareholder may not receive the rights at all and the rights may be sold on the shareholder’s
behalf by the Company.
Minority rights
Norwegian law sets forth a number of protections for minority shareholders of the Company, including but not limited
to those described in this paragraph and the description of general meetings as set out above. Any of the Company’s
shareholders may petition Norwegian courts to have a decision of the Board of Directors or the Company’s
shareholders made at the General Meeting declared invalid on the grounds that it unreasonably favours certain
shareholders or third parties to the detriment of other shareholders or the Company itself. The Company’s
shareholders may also petition the courts to dissolve the Company as a result of such decisions to the extent
particularly strong reasons are considered by the court to make necessary dissolution of the Company.
Minority shareholders holding 10% or more of the Company’s share capital have a right to demand in writing that the
Board of Directors convene an extraordinary general meeting to discuss or resolve specific matters. In addition, any of
the Company’s shareholders may in writing demand that the Company place an item on the agenda for any general
meeting as long as the Company is notified in time for such item to be included in the notice of the meeting. If the
notice has been issued when such a written demand is presented, a renewed notice must be issued if the deadline for
issuing notice of the general meeting has not expired.
Rights of redemption and repurchase of Shares
The share capital of the Company may be reduced by reducing the nominal value of the Shares or by cancelling
Shares. Such a decision requires the approval of at least two-thirds of the aggregate number of votes cast and at least
two-thirds of the share capital represented at a general meeting. Redemption of individual Shares requires the consent
of the holders of the Shares to be redeemed.
The Company may purchase its own Shares provided that the Board of Directors has been granted an authorisation to
do so by the General Meeting with the approval of at least two-thirds of the aggregate number of votes cast and at
least two-thirds of the share capital represented at the meeting. The Company’s purchase of own shares cannot lead
to the share capital, with a deduction of the total nominal value of the holding of own shares, is less than the minimal
permitted share capital, and treasury shares may only be acquired if the Company’s distributable equity, according to
the latest adopted balance sheet or an interim balance sheet, exceeds the consideration to be paid for the shares. The
authorisation by the General Meeting of the Company’s shareholders cannot be granted for a period exceeding two
years.
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Nordic Nanovector AS – Prospectus
Shareholder vote on certain reorganisations
A decision of the Company’s shareholders to merge with another company or to demerge requires a resolution by the
general meeting of the shareholders passed by at least two-thirds of the aggregate votes cast and at least two-thirds
of the share capital represented at the general meeting. A merger plan, or demerger plan signed by the Board of
Directors along with certain other required documentation, would have to be sent to all the Company’s shareholders,
or if the Articles of Association stipulate that, made available to the shareholders on the company’s website, at least
one month prior to the general meeting to pass upon the matter.
Liability of members of the Board of Directors
Members of the Board of Directors owe a fiduciary duty to the Company and its shareholders. Such fiduciary duty
requires that the Board Members act in the best interests of the Company when exercising their functions and exercise
a general duty of loyalty and care towards the Company. Their principal task is to safeguard the interests of the
Company.
Members of the Board of Directors may each be held liable for any damage they negligently or wilfully cause the
Company. Norwegian law permits the general meeting to discharge any such person from liability, but such discharge
is not binding on the Company if substantially correct and complete information was not provided at the General
Meeting passing upon the matter. If a resolution to discharge the Board Members from liability or not to pursue claims
against such a person has been passed by the General Meeting with a smaller majority than that required to amend
the Articles of Association, shareholders representing more than 10% of the share capital or, if there are more than
100 shareholders, more than 10% of the shareholders may pursue the claim on the Company’s behalf and in its name.
The cost of any such action is not the Company’s responsibility but can be recovered from any proceeds the Company
receives as a result of the action. If the decision to discharge any of the Company’s directors from liability or not to
pursue claims against the Board Members is made by such a majority as is necessary to amend the Articles of
Association, the minority shareholders of the Company cannot pursue such claim in the Company’s name.
Indemnification of Directors
Neither Norwegian law nor the Articles of Association contains any provision concerning indemnification by the
Company of the Board of Directors. The Company is permitted to purchase insurance for the Board Members against
certain liabilities that they may incur in their capacity as such.
Distribution of assets on liquidation
Under Norwegian law, the Company may be wound-up by a resolution of the Company’s shareholders at the General
Meeting passed by at least two-thirds of the aggregate votes cast and at least two-thirds of the share capital
represented at the meeting. In the event of liquidation, the Shares rank equally in the event of a return on capital.
12.8.3
Shareholder agreements
There are no shareholders’ agreements related to the Shares.
12.9
The VPS and transfer of shares
The Company’s principal share register is operated through the VPS. The VPS is the Norwegian paperless centralised
securities register. It is a computerised book-keeping system in which the ownership of, and all transactions relating
to, Norwegian listed shares must be recorded. The VPS is wholly-owned by Oslo Børs VPS Holding ASA.
All transactions relating to securities registered with the VPS are made through computerised book entries. No physical
share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered
shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must
establish a share account with a Norwegian account agent. Norwegian banks, Norges Bank (being, Norway’s central
bank), authorised securities brokers in Norway and Norwegian branches of credit institutions established within the
EEA are allowed to act as account agents.
As a matter of Norwegian law, the entry of a transaction in the VPS is prima facie evidence in determining the legal
rights of parties as against the issuing company or any third party claiming an interest in the given security. A
transferee or assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such
transferee or assignee has registered such shareholding or has reported and shown evidence of such share acquisition,
and the acquisition is not prevented by law, the relevant company’s Bye-laws or otherwise.
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Nordic Nanovector AS – Prospectus
The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in
respect of registered securities unless the error is caused by matters outside the VPS’ control which the VPS could not
reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be
reduced in the event of contributory negligence by the aggrieved party.
The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any information that the
Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding
any individual’s holdings of securities, including information about dividends and interest payments.
12.10
Shareholder register – Norwegian law
Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. As a general rule, there
are no arrangements for nominee registration and Norwegian shareholders are not allowed to register their shares in
VPS through a nominee. However, foreign shareholders may register their shares in the VPS in the name of a nominee
(bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to provide
information on demand about beneficial shareholders to the company and to the Norwegian authorities. In case of
registration by nominees, the registration in the VPS must show that the registered owner is a nominee. A registered
nominee has the right to receive dividends and other distributions, but cannot vote in general meetings on behalf of
the beneficial owners.
12.11
Compulsory acquisition
Pursuant to the Norwegian Private Limited Companies Act, a shareholder who, directly or through subsidiaries,
acquires shares representing 90% or more of the total number of issued shares in a Norwegian private limited liability
company, as well as 90% or more of the total voting rights, has a right, and each remaining minority shareholder of
the company has a right to require such majority shareholder, to effect a compulsory acquisition for cash of the shares
not already owned by such majority shareholder. Through such compulsory acquisition the majority shareholder
becomes the owner of the remaining shares with immediate effect.
If a shareholder acquires shares representing more than 90% of the total number of issued shares, as well as more
than 90% of the total voting rights, through a voluntary offer in accordance with the Securities Trading Act, a
compulsory acquisition can, subject to the following conditions, be carried out without such shareholder being obliged
to make a mandatory offer: (i) the compulsory acquisition is commenced no later than four weeks after the acquisition
of shares through the voluntary offer, (ii) the price offered per share is equal to or higher than what the offer price
would have been in a mandatory offer, and (iii) the settlement is guaranteed by a financial institution authorised to
provide such guarantees in Norway.
A majority shareholder who effects a compulsory acquisition is required to offer the minority shareholders a specific
price per share, the determination of which is at the discretion of the majority shareholder. However, where the
offeror, after making a mandatory or voluntary offer, has acquired more than 90% of the voting shares of a company
and a corresponding proportion of the votes that can be cast at the general meeting, and the offeror pursuant to
Section 4-25 of the Private Limited Companies Act completes a compulsory acquisition of the remaining shares within
three months after the expiry of the offer period, it follows from the Norwegian Securities Trading Act that the
redemption price shall be determined on the basis of the offer price for the mandatory/voluntary offer unless specific
reasons indicate another price.
Should any minority shareholder not accept the offered price, such minority shareholder may, within a specified
deadline of not less than two months, request that the price be set by a Norwegian court. The cost of such court
procedure will, as a general rule, be the responsibility of the majority shareholder, and the relevant court will have full
discretion in determining the consideration to be paid to the minority shareholder as a result of the compulsory
acquisition.
Absent a request for a Norwegian court to set the price or any other objection to the price being offered, the minority
shareholders would be deemed to have accepted the offered price after the expiry of the specified deadline.
12.12
Foreign exchange controls
There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of
dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of
shareholders of a company that has its shares registered with the VPS who are not residents in Norway to dispose of
their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount
either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange
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transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise
authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance
Administration and the Norwegian FSA have electronic access to the data in this register.
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13
TAXATION
Set out below is a summary of certain Norwegian tax matters related to the purchase, holding and disposal of the
Subsequent Offering Shares. The statements below regarding Norwegian taxation are based on the laws in force in
Norway as at the date of this Prospectus, which may be subject to any changes in law occurring after such date. Such
changes could possibly be made on a retrospective basis.
The summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to
a decision to purchase, own or dispose of the shares in the Company. Shareholders who wish to clarify their own tax
situation should consult with and rely upon their own tax advisors. Shareholders resident in jurisdictions other than
Norway and shareholders who cease to be resident in Norway for tax purposes (due to domestic tax law or tax treaty)
should specifically consult with and rely upon their own tax advisors with respect to the tax position in their country of
residence and the tax consequences related to ceasing to be resident in Norway for tax purposes.
Please note that for the purpose of the summary below, a reference to a Norwegian or non-Norwegian shareholder
refers to the tax residency rather than the nationality of the shareholder.
13.1
Norwegian shareholders
13.1.1
Taxation of dividends
Norwegian Personal Shareholders
Dividends received by shareholders who are individuals resident in Norway for tax purposes (“Norwegian Personal
Shareholders”) are taxable as ordinary income for such shareholders at a flat rate of 27% to the extent the dividend
exceeds a tax-free allowance.
The allowance is calculated on a share-by-share basis. The allowance for each share is equal to the cost price of the
share multiplied by a risk free interest rate based on the effective rate after tax of interest on treasury bills (Nw.:
“statskasseveksler”) with three months maturity. The allowance is calculated for each calendar year, and is allocated
solely to Norwegian Personal Shareholders holding shares at the expiration of the relevant calendar year.
Norwegian Personal Shareholders who transfer shares will thus not be entitled to deduct any calculated allowance
related to the year of transfer. Any part of the calculated allowance one year exceeding the dividend distributed on the
share (“excess allowance”) may be carried forward and set off against future dividends received on, or gains upon
realisation, of the same share.
Norwegian Corporate Shareholders
Dividends distributed from the Company to shareholders who are limited liability companies (and certain similar
entities) resident in Norway for tax purposes (“Norwegian Corporate Shareholders”) qualify for the Norwegian
participation exemption and are effectively taxed at rate of 0.81% (3% of dividend income from such shares is
included in the calculation of ordinary income for Norwegian Corporate Shareholders and ordinary income is subject to
tax at a flat rate of 27%).
13.1.2
Taxation of capital gains on realisation of shares
Norwegian Personal Shareholders
Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. A capital gain or
loss generated by a Norwegian Personal Shareholder through a disposal of shares is taxable or tax deductible in
Norway. Such capital gain or loss is included in or deducted from the basis for computation of ordinary income in the
year of disposal. Ordinary income is taxable at a rate of 27%. The gain is subject to tax and the loss is tax deductible
irrespective of the duration of the ownership and the number of shares disposed of.
The taxable gain/deductible loss is calculated per share, as the difference between the consideration received for the
share and the Norwegian Personal Shareholder’s cost price of the share, including any costs incurred in relation to the
acquisition or realisation of the share. From this capital gain, Norwegian Personal Shareholders are entitled to deduct a
calculated allowance, provided that such allowance has not already been used to reduce taxable dividend income. See
Section 13.1.1 “Taxation of dividends – Norwegian Personal Shareholders” above for a description of the calculation of
the allowance. The allowance may only be deducted in order to reduce a taxable gain, and cannot increase or produce
a deductible loss, i.e. any unused allowance exceeding the capital gain upon the realisation of a share will be annulled.
If the shareholder owns shares acquired at different points in time, the shares that were acquired first will be regarded
as the first to be disposed of, on a first-in first-out basis.
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Norwegian Corporate Shareholders
Norwegian Corporate Shareholders are exempt from tax on capital gains derived from the realisation of shares
qualifying for participation exemption, including shares in the Company. Losses upon the realisation and costs incurred
in connection with the purchase and realisation of such shares are not deductible for tax purposes.
13.1.3
Taxation of Subscription Rights
Norwegian Personal Shareholders
A Norwegian Personal Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation
in Norway. Costs related to the subscription for shares will be added to the cost price of the shares.
Norwegian Corporate Shareholders
A Norwegian Corporate Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation
in Norway. Costs related to the subscription for the shares will be added to the cost price of the shares.
13.1.4
Net wealth tax
The value of shares is included in the basis for the computation of net wealth tax imposed on Norwegian Personal
Shareholders. Currently, the marginal net wealth tax rate is 1.0% of the value assessed. The value for assessment
purposes for shares listed on the Norwegian OTC (“NOTC”) is equal to the share’s proportionate part of the company’s
net wealth tax value as of 1 January in the relevant fiscal year or 1 January in the year of assessment (i.e. the year
following the fiscal year) if the company’s share capital has been increased or reduced in the relevant fiscal year
through deposits from or repayment to the shareholders.
Norwegian Corporate Shareholders are not subject to net wealth tax.
13.2
Non-Norwegian shareholders
13.2.1
Taxation of dividends
Non-Norwegian Personal Shareholders
Dividends distributed to shareholders who are individuals not resident in Norway for tax purposes (“Non-Norwegian
Personal Shareholders”), are as a general rule subject to withholding tax at a rate of 25%. The withholding tax rate
of 25% is normally reduced through tax treaties between Norway and the country in which the shareholder is resident.
The withholding obligation lies with the company distributing the dividends and the Company assumes this obligation.
Non-Norwegian Personal Shareholders resident within the EEA for tax purposes may apply individually to Norwegian
tax authorities for a refund of an amount corresponding to the calculated tax-free allowance on each individual share
(see Section 13.1.1 “Taxation of dividends – Norwegian Personal Shareholders” above). However, the deduction for
the tax-free allowance does not apply in the event that the withholding tax rate, pursuant to an applicable tax treaty,
leads to a lower taxation on the dividends than the withholding tax rate of 25% less the tax-free allowance.
If a Non-Norwegian Personal Shareholder is carrying on business activities in Norway and the shares are effectively
connected with such activities, the shareholder will be subject to the same taxation of dividends as a Norwegian
Personal Shareholder, as described above.
Non-Norwegian Personal Shareholders who have suffered a higher withholding tax than set out in an applicable tax
treaty may apply to the Norwegian tax authorities for a refund of the excess withholding tax deducted.
Non-Norwegian Corporate Shareholders
Dividends distributed to shareholders who are limited liability companies (and certain other entities) not resident in
Norway for tax purposes (“Non-Norwegian Corporate Shareholders”), are as a general rule subject to withholding
tax at a rate of 25%. The withholding tax rate of 25% is normally reduced through tax treaties between Norway and
the country in which the shareholder is resident.
Dividends distributed to Non-Norwegian Corporate Shareholders resident within the EEA for tax purposes are exempt
from Norwegian withholding tax provided that the shareholder is the beneficial owner of the shares and that the
shareholder is genuinely established and performs genuine economic business activities within the relevant EEA
jurisdiction.
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If a Non-Norwegian Corporate Shareholder is carrying on business activities in Norway and the shares are effectively
connected with such activities, the shareholder will be subject to the same taxation of dividends as a Norwegian
Corporate Shareholder, as described above.
Non-Norwegian Corporate Shareholders who have suffered a higher withholding tax than set out in an applicable tax
treaty may apply to the Norwegian tax authorities for a refund of the excess withholding tax deducted.
Nominee registered shares will be subject to withholding tax at a rate of 25% unless the nominee has obtained
approval from the Norwegian Tax Directorate for the dividend to be subject to a lower withholding tax rate. To obtain
such approval the nominee is required to file a summary to the tax authorities including all beneficial owners that are
subject to withholding tax at a reduced rate.
The withholding obligation in respect of dividends distributed to Non-Norwegian Corporate Shareholders and on
nominee registered shares lies with the company distributing the dividends and the Company assumes this obligation.
13.2.2
Capital gains tax
Non-Norwegian Personal Shareholders
Gains from the sale or other disposal of shares by a Non-Norwegian Personal Shareholder will not be subject to
taxation in Norway unless the Non-Norwegian Personal Shareholder holds the shares in connection with business
activities carried out or managed from Norway. If the shares are held in connection with business activities carried out
or managed from Norway, the Non-Norwegian Personal Shareholder will be subject to the same taxation as a
Norwegian Personal Shareholder.
Non-Norwegian Corporate Shareholders
Capital gains derived by the sale or other realisation of shares by Non-Norwegian Corporate Shareholders are not
subject to taxation in Norway.
13.2.3
Taxation of Subscription Rights
Foreign Personal Shareholders
A Foreign Personal Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation in
Norway.
Foreign Corporate Shareholders
A Foreign Corporate Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation in
Norway.
13.2.4
Net wealth tax
Shareholders not resident in Norway for tax purposes are not subject to Norwegian net wealth tax. Non-Norwegian
Personal Shareholders can, however, be taxable if the shareholding is effectively connected to the conduct of trade or
business in Norway.
13.3
VAT and transfer taxes
No VAT, stamp or similar duties are currently imposed in Norway on the transfer or issuance of shares in Norwegian
companies.
13.4
Inheritance Tax
A transfer of shares through inheritance or as a gift does not give rise to inheritance or gift tax in Norway.
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14
THE COMPLETED PRIVATE PLACEMENT AND THE SUBSEQUENT OFFERING
This Section provides information on the completed Private Placement on 27 June 2014 and the Subsequent Offering.
Please note that the Shares in the Private Placement have already been subscribed, paid for and issued.
14.1
Background for the completed Private Placement and the Subsequent Offering
The Private Placement and the Subsequent Offering is being pursued as part of the Company’s strategy to further
develop of BetalutinTM in non-Hodgkin Lymphoma and to continue the work in phase II of the phase I/II clinical study.
As part of this strategy, the Company has decided to introduce new shareholders to the Company and in July 2014
arranged for the quotation of the Shares on the NOTC list. The Company aims for a listing of the Shares on Oslo Børs
or another stock exchange or regulated market before 31 March 2015.
The Subsequent Offering is primarily directed at those Eligible Shareholders who did not participate in the Private
Placement. The Shares offered in the Subsequent Offering are being offered at the same subscription price as in the
Private Placement (i.e. NOK 25 per Share).
The gross proceeds of the Private Placement and the Subsequent Offering are expected to be in the range between
NOK 250 million and NOK 300 million.
14.2
The Private Placement
Following initial discussions with a limited group of potential institutional investors and pursuant to advice received
from the Managers, the Company resolved to invite existing shareholders as well as new institutional and professional
investors to participate in a book-building process in the Private Placement. The bookbuilding period lasted from 6
June 2014 and until 17 June 2014. On the basis of orders received in the bookbuilding process the Board of Directors
allocated 10,000,000 new Shares at a price of NOK 25 per Share, raising NOK 250 million in gross proceeds, subject to
the approval of the general meeting. The general meeting of the Company approved the Private Placement on 27 June
2014.
The Company believes that the Private Placement, the introduction on the NOTC list and the planned listing on Oslo
Børs or another stock exchange or regulated market, in addition to providing equity financing to the Company, provide
the following benefits to the Company:

further access to equity capital markets and the possibility to ensure financing of further growth and
business expansion;

increased liquidity of the Shares, making the shares more attractive as an investment;

make the Company more visible to its partners and investors; and

facilitates industry visibility, increased transparency in market valuation and facilitates transactional
opportunities related to the Company’s traded stock that are connected with a listing of the Company’s
shares.
The new Shares were paid for on 3 July 2014 and the share capital increase relating to the issuance of the new Shares
in the Private Placement was registered with the Norwegian Registry of Business Enterprises on 4 July 2014. The new
Shares were issued to the VPS accounts of the investors participating in the Private Placement on 4 July 2014.
The percentage of immediate dilution resulting from the Private Placement for the Company’s shareholders who did
not participate in the Private Placement is approximately 41%.
A lock-up agreement was entered into between the Managers and certain shareholders, members of the Board of
Directors and key employees in connection with the Private Placement. Please see Section 14.4 “Lock-up” for more
information regarding the Lock-up Undertaking (as defined below).
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Nordic Nanovector AS – Prospectus
14.3
The Subsequent Offering
14.3.1
Overview
The Subsequent Offering consists of an offer by the Company to issue up to 2,000,000 Subsequent Offering Shares at
a Subscription Price of NOK 25 per Subsequent Offering Share, being equal to the subscription price in the Private
Placement. Subject to all Subsequent Offering Shares being issued, the Subsequent Offering will result in
NOK 50 million in gross proceeds to the Company.
Eligible Shareholders, being shareholders of the Company as of 27 June 2014 (and being registered as such in the VPS
on the 2 July 2014 pursuant to the three days’ settlement procedure in VPS) other than shareholders in jurisdictions
other than Norway and where an offer to participate in the share issue is not allowed or would require approval or
registration of a prospectus or similar measures, may subscribe for and be allocated new Shares in the Subsequent
Offering. Other investors than Eligible Shareholders may not subscribe for or be allocated Shares in the Subsequent
Offering.
The Eligible Shareholders, other than those shareholders who participated in the Private Placement (as hereinafter
defined), will be granted 0.4 Subscription Right for each existing Share registered as held by such Eligible
Shareholders as of the Record Date. Each Subscription Right provides a preferential right to subscribe to and to be
allocated one Subsequent Offering Share at the Subscription Price. The number of Subscription Rights issued to each
shareholder will be rounded downwards to the nearest whole number of rights.
If not all Subscription Rights are used, then the remaining Subsequent Offering Shares will be allocated to Eligible
Shareholders who over-subscribe or subscribe to Subsequent Offering Shares without the use Subscription Rights. The
allocation of the remaining Subsequent Offering Shares shall be based on the shareholding as of 27 June 2014 (as
registered as of the Record Date) of those Eligible Shareholders who subscribe to the remaining Subsequent Offering
Shares, but so that Shares allocated to the relevant Eligible Shareholder in the Private Placement or pursuant to
Subscription Rights shall be deemed to be allocated Shares.
The Company will announce the result of the Subsequent Offer on 15 September 2014.
No action will be taken to permit a public offering of the Subsequent Offering Shares in any jurisdiction outside of
Norway. For further information, see Section 15 “Selling and Transfer Restrictions ”.
14.3.2
Resolution relating to the Subsequent Offering and the issue of the Subsequent Offering Shares
In an Extraordinary General Meeting held on 27 June 2014 the Company resolved to increase the share capital by
minimum NOK 0.2 and maximum NOK 400,000 by the issuance of minimum 1 and maximum 2,000,000 new Shares
by adopting the following resolution (translated from Norwegian):
(i)
Provided that the Private Placement (see item 4) is completed, the share capital shall be increased by
minimum NOK 0.2 and maximum NOK 400,000 by the issuance of minimum 1 and maximum 2,000,000
new shares against contribution in cash.
(ii)
The nominal value of each share shall be NOK 0.20.
(iii)
The subscription price shall be NOK 25 per share.
(iv)
The shareholders’ preferential right to the new shares pursuant to Section 10-4 of the Private Limited
Liability Companies Act (“PLC Act”) is deviated from.
(v)
Non-transferable subscription rights shall be issued to the Company’s shareholders as of the date of the
general meeting. The subscription rights are not transferable. For each share held as of the day of the
general meeting, non-transferable subscription rights shall be issued. Each non-transferable subscription
right provides a right to request one share to be issued to the subscriber. No fractional subscription rights
will be issued and the number of subscription rights will be rounded down to the nearest whole number. The
remaining shares may be subscribed to by the shareholders of the Company as of the date of the general
meeting if not all subscription rights are used. The allotment of these remaining shares shall take place on
the basis of shareholding as of the date of the general meeting, but so that shares allotted to the
shareholder in the Private Placement (see item 4) or pursuant to subscription rights shall be deemed to be
allotted shares.
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Nordic Nanovector AS – Prospectus
(vi)
Shareholders in the Company as of the day of the general meeting who are either (a) participating in the
Private Placement (see item 4 above), or (b) in jurisdictions other than Norway and where an offer to
participate in the share issue is not allowed or would require approval or registration of a prospectus or
similar measures, shall not receive subscription rights. If such shareholders receive subscription rights,
these rights cannot be used or transferred.
(vii)
The Company shall issue a prospectus approved by the Norwegian Financial Supervisory Authority (“NFSA”)
in connection with the share issue.
(viii)
The new shares shall be subscribed to on a separate application form in the period from and including
1 September 2014 to 16:00 (CET) on 12 September 2014, provided however that the subscription period
shall not commence until the prospectus has been approved by the NFSA and published. In the event that
the prospectus is not approved and published by 1 September 2014, the subscription period and payment
deadline shall be postponed by the number of days after 1 September 2014 it takes to get the prospectus
approved and published.
(ix)
When subscribing to the shares on the application form the subscriber must grant DNB Markets an
authorization to debit a specific Norwegian bank account for an amount equal to the subscription price of
the subscribed shares. Upon allocation DNB Markets will debit the account for the subscription amount. The
debit will be on or around 17 September 2014.
(x)
The new shares give right to dividends and other shareholder rights in the Company from the time the share
capital increase has been registered in the Norwegian Register of Business Enterprises.
(xi)
The estimated costs related to the share capital increase amount to around NOK 1.7 million.
(xii)
The first sentence of section 4 of the Articles of Association shall be amended to state the Company’s share
capital and number of shares following the share capital increase.
The resolution referred to in items (i) and (vi) of the resolution quoted above is the resolution adopting the Private
Placement.
The pre-emptive rights of the existing shareholders have been set aside in connection with the Subsequent Offering to
obtain that only Eligible Shareholders who did not participate in the Private Placement shall receive Subscription
Rights.
14.3.3
Timetable
The timetable set out below provides certain indicative key dates for the Subsequent Offering:
The date of the Extraordinary General Meeting
27 June 2014
Record Date (i.e. the date on which the Eligible Shareholders and their shareholding appear
2 July 2014
in the VPS) .................................................................................................................
Subscription Period commences .....................................................................................
1 September 2014
Subscription Period ends ............................................................................................... 16.00 hours (CET) 12 September 2014
Allocation of the Subsequent Offering Shares ...................................................................
15 September 2014
Distribution of allocation letters......................................................................................
15 September 2014
Payment Date .............................................................................................................
17 September 2014
Delivery date for the Subsequent Offering Shares .............................................................
On or about 22 September 2014
Commencement of trading in the Subsequent Offering Shares on the NOTC ..........................
22 September 2014
14.3.4
Subscription Price
The Subscription Price in the Subsequent Offering is NOK 25 per Subsequent Offering Share, being the same as the
subscription price in the Private Placement. No expenses or taxes are charged to the subscribers in the Subsequent
Offering by the Company or the Managers.
14.3.5
Subscription Period
The Subscription Period will commence on 1 September 2014 and end on 12 September 2014 at 16:00 hours (CET).
The Subscription Period may not be extended.
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Nordic Nanovector AS – Prospectus
14.3.6
Record Date
The entitlement to participate in the Subsequent Offering and the number of Subscription Rights to be issued, is based
on the shareholding in the Company as of 27 June 2014 (as it appears in the VPS during the Record Date, being 2 July
2014).
For Eligible Shareholders not being allocated shares in the Private Placement, and provided that the delivery of traded
Shares were made with ordinary T+3 settlement in the VPS, Shares that were acquired until and including 27 June
2014 will give the right to receive Subscription Rights, whereas Shares that were acquired from and including 28 June
2014 will not give the right to receive Subscription Rights.
14.3.7
Subscription Rights
Eligible Shareholders not being allocated shares in the Private Placement will receive 0.4 non-transferable Subscription
Rights for each Share held as of 27 June 2014 (as registered in VPS on the Record Date). Each Subscription Right
gives a preferential right to subscribe for, and be allocated, one Subsequent Offering Share. Fractional Subscription
Rights will not be issued, and the number of Subscription Rights issued to those Eligible Shareholders who would
otherwise be entitled to fractions of Subscription Rights will be rounded down to the nearest whole number.
The Subscription Rights will be credited to and registered on each relevant Eligible Shareholder’s VPS account on or
about 1 September 2014 under ISIN NO 0010717267. The Subscription Rights will be distributed free of charge. The
Subscription Rights are non-transferable.
The Subscription Rights may be used to subscribe for Subsequent Offering Shares in the Subsequent Offering before
the expiry of the Subscription Period on 12 September 2014 at 16:00 hours (CET).
The Subscription Rights must be used to subscribe for Subsequent Offering Shares before the end of the
Subscription Period (i.e., 12 September 2014 at 16:00 hours (CET)). Subscription Rights which are not
exercised before 12 September 2014 at 16:00 hours (CET) will have no value and will lapse without
compensation to the holder. Holders of Subscription Rights should note that subscriptions for Subsequent
Offering Shares must be made in accordance with the procedures set out in this Prospectus. The
Subscription Rights are non-transferable.
For VPS technical reasons, Subscription Rights may initially be credited to other shareholders of the Company as of 27
June 2014 than the Eligible Shareholders (the “Ineligible Shareholders”) and/or to Eligible Shareholders who were
allocated Shares in the Private Placement and who should thus not receive Subscription Rights. Such credit specifically
does not constitute an offer to Ineligible Shareholders to subscribe for Subsequent Offering Shares or preferential
rights for Eligible Shareholders who were allocated Shares in the Private Placement. The Company will instruct the
Managers to withdraw any such Subscription Rights from the relevant VPS accounts with no compensation to the
holder.
14.3.8
Subscription procedures and Managers
Subscriptions for Subsequent Offering Shares must be made by submitting a correctly completed Subscription Form to
any of the Managers during the Subscription Period or may, for Norwegian citizens, be made online as further
described below.
Eligible Shareholders will receive Subscription Forms that include information about the number of Subscription Rights
allocated to the Eligible Shareholder, if any, and certain other matters relating to the shareholding.
Subscribers who are residents of Norway with a Norwegian personal identification number (Nw.: personnummer) are
encouraged to subscribe for Subsequent Offering Shares through the VPS online subscription system (or by following
the link on www.dnb.no/emisjoner and www.abgsc.no which will redirect the subscriber to the VPS online subscription
system).
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Nordic Nanovector AS – Prospectus
Correctly completed Subscription Forms must be received by one of the subscription offices set out below, or, in the
case pf online subscriptions, be registered by no later than 16:00 hours (CET) on 12 September 2014 at the following
addresses, fax numbers or e-mails:
DNB Bank ASA, Registrars Department
ABG Sundal Collier
Dronning Eufemias gate 30
Munkedamsveien 45E
P.O. Box 1600 Sentrum
P.O. Box 1444 Vika
N-0021 Oslo
N-0115 Oslo
Norway
Norway
Tel: +47 23 26 81 01
Tel: +47 22 01 60 00
Fax: +47 22 48 29 80
Fax: +47 22 01 60 62
E-mail: [email protected]
E-mail: [email protected]
Subscriptions will not be treated differently based on which of the Managers they are submitted to.
None of the Company or the Managers may be held responsible for postal delays, unavailable fax lines, internet lines
or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all
by the Managers. Subscription Forms received after the end of the Subscription Period and/or incomplete or incorrect
Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of the
Company, the Receiving Agents and/or the Managers without notice to the subscriber.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after
having been received by the Managers. The subscriber is responsible for the correctness of the information filled into
the Subscription Form. By signing and submitting a Subscription Form, the subscribers confirm and warrant that they
have read this Prospectus and are eligible to subscribe for Subsequent Offering Shares under the terms set forth
herein.
There is no minimum subscription amount for which subscriptions in the Subsequent Offering must be made.
Oversubscription (i.e., subscription for more Subsequent Offering Shares than the number of Subscription Rights held
by the subscriber entitles the subscriber to be allocated) and subscription without Subscription Rights by Eligible
Shareholders is permitted. Subscriptions may not be made by others than Eligible Shareholders, and any such
subscriptions will be rejected.
Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are allowed. Please note, however, that
two separate Subscription Forms submitted by the same subscriber with the same number of Subsequent Offering
Shares subscribed for on both Subscription Forms will only be counted once unless otherwise explicitly stated in one of
the Subscription Forms. In the case of multiple subscriptions through the VPS online subscription system or
subscriptions made both on a Subscription Form and through the VPS online subscription system, all subscriptions will
be counted. For the avoidance of doubt, only subscriptions by Eligible Shareholders will be accepted.
14.3.9
Allocation of Subsequent Offering Shares
Allocation of the Subsequent Offering Shares will take place on or about 15 September 2014. Allocation will first be
made to subscribers having validly exercised their Subscription Rights during the Subscription Period, so that each
exercised Subscription Right will give the right be allocated one (1) Subsequent Offering Share. Subscription Rights
that are not used to subscribe for Subsequent Offering Shares before the expiry of the Subscription Period will have no
value and will lapse without compensation to the holder.
If there are any unallocated Subsequent Offering Shares following the allocation on the basis of exercised Subscription
Rights, then the remaining Subsequent Offering Shares shall be allocated to those Eligible Shareholders who have
subscribed to Subsequent Offering Shares without exercising Subscription Rights and those Eligible Shareholders who
have exercised Subscription Rights and over-subscribed (i.e. subscribed to more Subsequent Offering Shares than the
number of Subscription Rights held by the subscriber). The allotment of these remaining Subsequent Offering Shares
among the relevant Eligible Shareholders shall take place on the basis of their respective shareholding in the Company
as of 27 June 2014 (as registered in the VPS on the Record Date), but so that Shares allotted to these Eligible
Shareholders in the Private Placement or pursuant to Subscription Rights shall be deemed to be allocated Subsequent
Offering Shares for the purpose of that allocation.
No fractional Subsequent Offering Shares will be allocated. The Company may round off, reject or reduce any
subscription for Subsequent Offering Shares not covered by Subscription Rights. Notifications of allocated Subsequent
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Nordic Nanovector AS – Prospectus
Offering Shares and the corresponding subscription amount to be paid by each subscriber are expected to be
distributed in a letter from the VPS on or about 15 September 2014.
The Company will release a press release which will be posted on the Company’s website to publish information
relating to the Subsequent Offering, such as the total amount of the Subsequent Offering. The final determination of
the total amount of the Subsequent Offering is expected to be published on or about 15 September 2014.
14.3.10
Payment for the Subsequent Offering Shares
The payment for Subsequent Offering Shares allocated to a subscriber falls due on the Payment Date (17 September
2014). Payment must be made in accordance with the requirements set out in Sections 14.3.10.1 or 14.3.10.2 below.
14.3.10.1 Subscribers who have a Norwegian bank account
Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form, provide the
Managers with a one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the
amount payable for the Subsequent Offering Shares which are allocated to the subscriber.
The specified bank account is expected to be debited on or after the Payment Date. The Managers are only authorised
to debit such account once, but reserves the right to make up to three debit attempts, and the authorisation will be
valid for up to seven working days after the Payment Date.
The subscriber furthermore authorises the Managers to obtain confirmation from the subscriber’s bank that the
subscriber has the right to dispose over the specified account and that there are sufficient funds in the account to
cover the payment.
If there are insufficient funds in a subscriber’s bank account or if it for other reasons is impossible to debit such bank
account when a debit attempt is made pursuant to the authorisation from the subscriber, the subscriber’s obligation to
pay for the Subsequent Offering Shares will be deemed overdue.
Payment by direct debiting is a service that banks in Norway provide in cooperation. In the relationship between the
subscriber and the subscriber’s bank, the standard terms and conditions for “Payment by Direct Debiting – Securities
Trading”, which are set out on page 2 of the Subscription Form, will apply.
14.3.10.2 Subscribers who do not have a Norwegian bank account
Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the
Subsequent Offering Shares allocated to them is made on or before the Payment Date.
Prior to any such payment being made, the subscriber must contact the Managers (DNB Bank ASA, Registrar
Department, Dronning Eufemias gate 30 P.O. Box 1600 Sentrum, Oslo, Norway, telephone number +47 23 26 80 20)
for further details and instructions.
14.3.10.3 Overdue payments
Should any subscriber have insufficient funds on his or her account, or should payment be delayed for any reason, or if
it is not possible to debit the account, interest will accrue on the amount due at a rate equal to the prevailing interest
rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976 no. 100, which at the date of
this Prospectus is 9.50% per annum. The Managers reserve the right (but has no obligation) to make up to three debit
attempts through 25 September 2014 if there are insufficient funds on the account on the Payment Date. Should
payment not be made when due, the Subsequent Offering Shares allocated will not be delivered to the subscriber, and
the Managers reserve the right, at the risk and cost of the subscriber (and that the subscriber will not be entitled to
any profit therefrom), to at any time cancel the subscription and to re-allot or otherwise dispose of the allocated
Subsequent Offering Shares, on such terms and in such manner as the Managers may decide. The Managers further
reserve the right (but have no obligation) to fund the Subscription Price for Subsequent Offering Shares for which
payment has not been made by the subscriber when due, and to take over and/or sell for the subscriber’s account and
risk, without further notice to the subscriber, such Subsequent Offering Shares. The original subscriber will remain
liable for payment of the Subscription Price for the Subsequent Offering Shares allocated to the subscriber, together
with any interest, costs, charges and expenses accrued, and the Company or the Managers may enforce payment for
any such amount outstanding.
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Nordic Nanovector AS – Prospectus
14.3.11
Financial intermediaries
All persons or entities holding Shares or Subscription Rights through financial intermediaries (i.e., brokers, custodians
and nominees) should read this Section 14.3.11. All questions concerning the timeliness, validity and form of
instructions to a financial intermediary in relation to the exercise, sale or purchase of Subscription Rights should be
determined by the financial intermediary in accordance with its usual customer relations procedure or as it otherwise
notifies each beneficial shareholder.
The Company is not liable for any action or failure to act by a financial intermediary through which Shares are held.
Subscription Rights
If an Eligible Shareholder holds Shares registered through a financial intermediary on the Record Date, the financial
intermediary will customarily give the Eligible Shareholder details of the aggregate number of Subscription Rights to
which it will be entitled. The relevant financial intermediary will customarily supply each Eligible Shareholder with this
information in accordance with its usual customer relations procedures. Eligible Shareholders holding Shares through a
financial intermediary should contact the financial intermediary if they have received no information with respect to
the Subsequent Offering.
Eligible Shareholders who hold their Shares through a financial intermediary and who were allocated Shares in the
Private Placement or who are Ineligible Shareholders will not be entitled to exercise Subscription Rights or have
Subscription Rights exercised on their behalf.
Subscription Period
The time by which notification of exercise instructions for subscription of Subsequent Offering Shares must validly be
given to a financial intermediary may be earlier than the expiry of the Subscription Period. Such deadline will depend
on the financial intermediary. Eligible Shareholders who hold their Shares through a financial intermediary should
contact their financial intermediary if they are in any doubt with respect to the deadline.
Subscription
Any Eligible Shareholder who is not an Ineligible Shareholder and who Shares through a financial intermediary as of 27
June 2014 (as registered in the VPS on the Record Date) and wishes to subscribe to Subsequent Offering Shares,
should instruct its financial intermediary in accordance with the instructions received from such financial intermediary.
The financial intermediary will be responsible for collecting exercise instructions from the Eligible Shareholders and for
informing the Managers of their exercise instructions.
Method of Payment
Any Eligible Shareholder who held Shares through a financial intermediary as of 27 June 2014 (as registered in the
VPS on the Record Date) should pay the Subscription Price for the Subsequent Offering Shares that are allocated to it
in accordance with the instructions received from the financial intermediary. The financial intermediary must pay the
Subscription Price in accordance with the instructions in the Prospectus. Payment by the financial intermediary for the
Subsequent Offering Shares must be made to the Managers no later than the Payment Date. Accordingly, financial
intermediaries may require payment to be provided to them prior to the Payment Date.
14.3.12
Delivery of the Subsequent Offering Shares
Subject to timely payment by the subscribers, delivery of the Subsequent Offering Shares allotted to the Eligible
Shareholders is expected to take place on or about 22 September 2014.
14.3.13
Transfer of the Subsequent Offering Shares
The Subsequent Offering Shares may not be transferred before they are fully paid and registered in the share register
of the Company held in the VPS.
14.3.14
The rights conferred by the Subsequent Offering Shares
The Subsequent Offering Shares to be issued in the Subsequent Offering will be ordinary Shares in the Company each
having a par value NOK 0.20.
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Nordic Nanovector AS – Prospectus
The Subsequent Offering Shares will rank pari passu in all respects with the other Shares and carry full shareholder
rights in the Company from the time of registration of the share capital increase pertaining to the Subsequent Offering
with the Norwegian Register of Business Enterprises. The Subsequent Offering Shares will be eligible for any dividend
that the Company may declare after such registration. All Shares, including the Subsequent Offering Shares, will have
voting rights and obligations which are standard under the Norwegian Private Limited Companies Act, and are
governed by Norwegian law. See Section 12.3 “Share capital and share capital history” for a more detailed description
of the Shares.
14.3.15
VPS account
To participate in the Offering, each applicant must have a VPS account. The VPS account number must be stated when
registering an application through the VPS online application system, or on the Subscription Form. VPS accounts can
be established with authorised VPS registrars, which can be Norwegian banks, authorised investment firms in Norway
and Norwegian branches of credit institutions established within the EEA. However, non-Norwegian applicants may use
nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Norwegian
Ministry of Finance. Establishment of VPS accounts requires verification of identification by the relevant VPS registrar
in accordance with Norwegian anti-money laundering legislation (see Section 14.6 “Mandatory anti-money laundering
procedures – VPS account” below).
The Subscription Rights will be registered with the VPS under the ISIN NO 0010717267. The Shares issued in the
Private Placement will from the date of this Prospectus, and the Subsequent Offering Shares will be when issued,
registered in the VPS with the same ISIN as the existing Shares, being NO 001 0597883.
The Company’s registrar with the VPS is Nordea Bank Norge ASA, Securities Services – Issuer Services, Middeltunsgt.
17, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway.
14.3.16
Dilution
The percentage of immediate dilution resulting from the Subsequent Offering, based on an issuance of 2,000,000
Subsequent Offering Shares under the Subsequent Offering, for the existing shareholders who do not participate in the
Subsequent Offering is approximately 8%.
14.3.17
Interests of natural and legal persons involved in the Private Placement and the Subsequent Offering
The Managers or their affiliates have provided from time to time, and may provide in the future, investment and
commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may
have received and may continue to receive customary fees and commissions. The Managers do not intend to disclose
the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory
obligation to do so.
Beyond the abovementioned, the Company is not known with any interest of natural and legal persons involved in the
Private Placement or the Subsequent Offering.
14.3.18
Participation of major existing shareholders and members of the Company’s Management, supervisory and
administrative bodies in the Subsequent Offering
Except for the fact that the members of the Board of Directors and Management (with the exception
of CFO Tone Kvåle who were allocated shares in the Private Placement) will be granted
Subscription Rights, being Eligible Shareholders not being allocated Shares in the Private
Placement, the Company is not aware of whether any major shareholders of the Company or
members of the Company’s Management, supervisory or administrative bodies intend to subscribe
for Subsequent Offering Shares in the Subsequent Offering, or whether any person intends to
subscribe for more than 5% of the Subsequent Offering. Please see Section 0 “
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Nordic Nanovector AS – Prospectus
Ownership structure” for more information the allocation of the shares to major shareholders, Company’s
management, supervisory and administrative bodies.
14.3.19
Publication of information in respect to the Subsequent Offering
Press releases will be posted on the Company’s website. The final number of Subsequent Offering Shares and the total
amount of the Subsequent Offering is expected to be published on or about 15 September 2014.
14.3.20
The Company’s share capital following the Private Placement and the Subsequent Offering
As of the date of this Prospectus, the Company’s share capital is NOK 4,564,275 divided into 22,821,375 Shares, each
with a nominal value of NOK 0.20.
The final number of Subsequent Offering Shares to be issued in connection with the Subsequent Offering will depend
on the number of Subsequent Offering Shares subscribed for by Eligible Shareholders. The maximum number of
Subsequent Offering Shares to be issued is 2,000,000 new Shares, all with a nominal value of NOK 0.20 per Share,
which will give a further increase in the Company’s total share capital from NOK 4,564,275 to a maximum of NOK
4,964,275, divided into 24,821,375 Shares. See Section 12.3 “Share capital and share capital history” for a more
detailed description of the Company’s share capital.
In addition, as described in the Company’s press release dated 27 September 2013, 1,666,666 shares will no later
than 15 October 2014 be issued to HealthCap VI L.P. at a subscription price of NOK 15 in connection with the private
placement completed in September 2013. The Company’s share capital will be increased by NOK 333,333.2 from NOK
4,964,275 to NOK 5,297,608.2 divided into 26,488,041 Shares.
14.4
Lock-up
The Managers have entered into a lock-up agreement with certain shareholders (the “Lock-up Undertaking”), under
which each such shareholder has agreed that it will not, nor any other party acting on its behalf (other than the
Managers), for a period of six months from 27 June 2014, directly or indirectly, without the prior written consent of
the Managers: offer, sell, contract to sell, pledge, mortgage, grant any option to purchase or otherwise dispose of,
directly or indirectly, any Shares (or any other securities convertible into Shares) or enter into any transaction
(including a derivative transaction) having an effect on the market in the Shares similar to that of a sale of Shares, or
publicly to announce any intention to do any of such things, without the prior written consent of the Managers. The
Lock-up Undertakings also relate to the relevant shareholders’ related parties.
The following shareholders have entered into a Lock-up Undertaking:
Shareholder
No. of Shares as of the date of this Prospectus
Management
Jan A. Alfheim (CEO)
64,334
Bjørg Bolstad (CCO)
32,000
Jostein Dahle (CSO)1
258,358
Anniken Hagen (Head of Quality Assurance and Regulatory Affairs)
34,837
Tone Kvåle (CFO)
31,761
Board of Directors
Roy Hartvig Larsen (chairman)2
1,741,949
Alexandra Morris3
63,520
Theresa Comiskey Olsen
18,000
Bente-Lill Bjerkelund Romøren
6,000
Ludvik Sandnes4
81,000
Vidar Hansson (previous board member) (including the Shares held through
Varak AS)5
Total
347,487
2,679,246
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Nordic Nanovector AS – Prospectus
Shareholder
1
No. of Shares as of the date of this Prospectus
Jostein Dahle holds 268,359 Shares in the Company, of which 10,000 Shares are not included in the Lock-up Undertaking.
2
Roy Larsen holds 1,741,949 Shares in the Company, of which 1,162,000 Shares are held through Sciencons AS.
3
Alexandra Morris holds 63,520 Shares in the Company, of which 57,520 Shares are held through Gordito AS.
4
Ludvik Sandnes holds 81,000 Shares in the Company, of which 75,000 Shares are held through Ekornhuset AS.
5
Vidar Hansson holds 347,487 Shares in the Company, of which all Shares are held through Varak AS.
The Lock-up Undertaking will not apply to (i) Shares acquired in the Private Placement or after 27 June 2014, (ii) the
sale of Shares to finance the strike price for share options or the tax triggered by such sale or the exercise of share
options; or (iii) the acceptance of an offer for all shares in the Company.
14.5
Net proceeds and expenses relating to the Subsequent Offering
The transaction costs for the Company related to the Private Placement and the Subsequent Offering is estimated to
be NOK 11 million. The net proceeds will be approximately NOK 289 million subject to completion of the Subsequent
Offering, out of which NOK 48.7 million is net proceeds from the Subsequent Offering (assuming the Subsequent
Offering being fully subscribed. For a description of the use of such proceeds, see Section 5 “Reasons for the
Subsequent Offering”.
No expenses or taxes will be charged by the Company or the Managers to the subscribers in the Subsequent Offering.
14.6
Mandatory anti-money laundering procedures – VPS account
The Subsequent Offering is subject to the Norwegian Money Laundering Act no. 11 of 6 March 2009 and the Norwegian
Money Laundering Regulations no. 302 of 13 March 2009 (collectively, the “Anti-Money Laundering Legislation”).
Subscribers who are not registered as existing customers of the Managers must verify their identity to the Managers in
accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers
who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are
exempted, unless verification of identity is requested by the Managers. Subscribers who have not completed the
required verification of identity prior to the expiry of the Subscription Period will not be allocated Subsequent Offering
Shares.
Furthermore, participation in the Subsequent Offering is conditional upon the subscriber holding a VPS account. The
VPS account number must be stated in the Subscription Form. VPS accounts can be established with authorised VPS
registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit
institutions established within the EEA. Investors may use nominee VPS accounts registered in the name of a nominee.
14.7
Selling and transfer restrictions
The distribution of this Prospectus and the offering and sale of the Subsequent Offering Shares and the Subscription
Rights offered hereby may in certain jurisdictions be restricted by law. Persons in possession of this Prospectus are
required to inform themselves about and to observe any such restrictions. See Section 15 “Selling and Transfer
Restrictions ” for further information.
14.8
Governing law and jurisdiction
This Prospectus, the terms and conditions of the Subsequent Offering and the Subscription Form shall be governed by,
and construed in accordance with, Norwegian law, and the Subsequent Offering Shares will be issued in accordance
with the provisions of the Norwegian Private Limited Companies Act. Any dispute arising out of, or in connection with,
this Prospectus or the Subsequent Offering shall be subject to the exclusive jurisdiction of the courts of Norway, with
Oslo District Court as legal venue.
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Nordic Nanovector AS – Prospectus
15
SELLING AND TRANSFER RESTRICTIONS
15.1
General
The grant of Subscription Rights and issue of Subsequent Offering Shares upon exercise of Subscription Rights and the
offer of unsubscribed Subsequent Offering Shares to persons resident in, or who are citizens of countries other than
Norway, may be affected by the laws of the relevant jurisdiction. Investors should consult their professional advisers
as to whether they require any governmental or other consent or need to observe any other formalities to enable them
to exercise Subscription Rights or purchase Subsequent Offering Shares.
The Company is not taking any action to permit a public offering of the Subscription Rights and Subsequent Offering
Shares in any jurisdiction other than Norway. Receipt of this Prospectus will not constitute an offer in those
jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information
only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives
a copy of this Prospectus in any territory other than Norway the investor may not treat this Prospectus as constituting
an invitation or offer to it, nor should the investor in any event deal in the Subscription Rights and Subsequent
Offering Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that investor,
or the Subscription Rights and Subsequent Offering Shares could lawfully be dealt in without contravention of any
unfulfilled registration or other legal requirements. Accordingly, if an investor receives a copy of this Prospectus, the
investor should not distribute or send the same, or transfer the Subsequent Offering Shares to any person or in or into
any jurisdiction where to do so would or might contravene local securities laws or regulations. If the investor forwards
this Prospectus into any such territories (whether under a contractual or legal obligation or otherwise), the investor
should direct the recipient’s attention to the contents of this Section.
Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Subsequent Offering Shares
being granted or offered, respectively, in the Subsequent Offering may not be offered, sold, resold, transferred or
delivered, directly or indirectly, in or into, Member States of the EEA that have not implemented the Prospectus
Directive, Australia, Canada, Hong Kong, Japan, the United States or any other jurisdiction in which it would not be
permissible to offer the Subscription Rights and/or the Subsequent Offering Shares (the “Ineligible Jurisdictions”);
(ii) this Prospectus may not be sent to any person in any Ineligible Jurisdiction; and (iii) the crediting of Subscription
Rights to an account of an Ineligible Shareholder or other person in an Ineligible Jurisdiction or a citizen of an
Ineligible Jurisdiction (referred to as “Ineligible Persons”) does not constitute an offer to such persons of the
Subscription Rights or the Subsequent Offering Shares. Ineligible Persons may not exercise Subscription Rights.
If an investor takes up, delivers or otherwise transfers Subscription Rights, exercises Subscription Rights to obtain
Subsequent Offering Shares or trades or otherwise deals in Subsequent Offering Shares, that investor will be deemed
to have made or, in some cases, be required to make, the following representations and warranties to the Company
and any person acting on the Company’s or its behalf:

the investor is not located in an Ineligible Jurisdiction;

the investor is not an Ineligible Person;

the investor is not acting, and has not acted, for the account or benefit of an Ineligible Person;

unless the investor is a "qualified institutional buyer" as defined in Rule 144A under the US Securities Act,
the investor is located outside the United States and any person for whose account or benefit it is acting on
a non-discretionary basis is located outside the United States and, upon acquiring Subsequent Offering
Shares, the investor and any such person will be located outside the United States;

the investor understands that the Subscription Rights and Shares have not been and will not be registered
under the US Securities Act and may not be offered, sold, pledged, resold, granted, delivered, allocated,
taken up or otherwise transferred within the United States except pursuant to an exemption from, or in a
transaction not subject to, registration under the US Securities Act; and

the investor may lawfully be offered, take up, subscribe for and receive Subscription Rights and Subsequent
Offering Shares only in the jurisdiction in which it resides or is currently located.
The Company and any persons acting on behalf of the Company, including the Managers, will rely upon the investor’s
representations and warranties. Any provision of false information or subsequent breach of these representations and
warranties may subject the investor to liability.
If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee, custodian
or trustee), that person will be required to provide the foregoing representations and warranties to the Company with
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Nordic Nanovector AS – Prospectus
respect to the exercise of Subscription Rights on behalf of the holder. If such person cannot or is unable to provide the
foregoing representations and warranties, the Company will not be bound to authorise the allocation of any of the
Subscription Rights and Subsequent Offering Shares to that person or the person on whose behalf the other is acting.
Subject to the specific restrictions described below, if an investor (including, without limitation, its nominees and
trustees) is outside Norway and wishes to exercise or otherwise deal in or subscribe for Subscription Rights and/or
Subsequent Offering Shares, the investor must satisfy itself as to full observance of the applicable laws of any relevant
territory including obtaining any requisite governmental or other consents, observing any other requisite formalities
and paying any issue, transfer or other taxes due in such territories.
The information set out in this section is intended as a general guide only. If the investor is in any doubt
as to whether it is eligible to exercise its Subscription Rights or subscribe for the Subsequent Offering
Shares, that investor should consult its professional adviser without delay.
Subscription Rights will initially be credited to financial intermediaries for the accounts of all shareholders who hold
Shares registered through a financial intermediary on the Record Date. Subject to certain exceptions, financial
intermediaries, which include brokers, custodians and nominees, may not exercise any Subscription Rights on behalf of
any person in the Ineligible Jurisdictions or any Ineligible Persons and may be required in connection with any exercise
of Subscription Rights to provide certifications to that effect.
Subject to certain exceptions, financial intermediaries are not permitted to send this Prospectus or any other
information about the Subsequent Offering into any Ineligible Jurisdiction or to any Ineligible Persons. Subject to
certain exceptions, exercise instructions or certifications sent from or postmarked in any Ineligible Jurisdiction will be
deemed to be invalid and Subsequent Offering Shares will not be delivered to an addressee in any Ineligible
Jurisdiction. The Company reserves the right to reject any exercise (or revocation of such exercise) in the name of any
person who provides an address in an Ineligible Jurisdiction for acceptance, revocation of exercise or delivery of such
Subscription Rights and Subsequent Offering Shares, who is unable to represent or warrant that such person is not in
an Ineligible Jurisdiction and is not an Ineligible Person, who is acting on a non-discretionary basis for such persons, or
who appears to the Company or its agents to have executed its exercise instructions or certifications in, or dispatched
them from, an Ineligible Jurisdiction. Furthermore, the Company reserves the right, with sole and absolute discretion,
to treat as invalid any exercise or purported exercise of Subscription Rights which appears to have been executed,
effected or dispatched in a manner that may involve a breach or violation of the laws or regulations of any jurisdiction.
Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a holder to exercise
its Subscription Rights if the Company, in its absolute discretion, is satisfied that the transaction in question is exempt
from or not subject to the laws or regulations giving rise to the restrictions in question. Applicable exemptions in
certain jurisdictions are described further below. In any such case, the Company does not accept any liability for any
actions that a holder takes or for any consequences that it may suffer as a result of the Company accepting the
holder’s exercise of Subscription Rights.
No action has been or will be taken by the Managers to permit the possession of this Prospectus (or any other offering
or publicity materials or application form(s) relating to the Subsequent Offering) in any jurisdiction where such
distribution may lead to a breach of any law or regulatory requirement.
Neither the Company nor the Managers, nor any of their respective representatives, is making any representation to
any offeree, holder of Subscription Rights and/or Subsequent Offering Shares regarding the legality of an investment
in the Subsequent Offering Shares by such offeree, subscriber or purchaser under the laws applicable to such offeree,
subscriber or purchaser. Each investor should consult its own advisers before subscribing for Subsequent Offering
Shares or purchasing Subsequent Offering Shares. Investors are required to make their independent assessment of
the legal, tax, business, financial and other consequences of a subscription for Subsequent Offering Shares or a
purchase of Subsequent Offering Shares.
A further description of certain restrictions in relation to the Subscription Rights and the Subsequent Offering Shares in
certain jurisdictions is set out below.
15.2
Selling restrictions
15.2.1
United States
The Subscription Rights and/or the Subsequent Offering Shares have not been and will not be registered under the
U.S. Securities Act, and may not be offered or sold except in offshore transactions in compliance with Regulation S
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Nordic Nanovector AS – Prospectus
under the U.S. Securities Act, and in accordance with any applicable securities laws of any state or territory of the
United States or any other jurisdiction.
15.2.2
United Kingdom
Each Manager has represented, warranted and agreed that:
a)
it has only communicated or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with
the issue or sale of any New Shares and Subsequent Offering Shares in circumstances in which Section
21(1) of the FSMA does not apply to the Company; and
b)
it has complied and will comply with all applicable provisions of the FSMA with respect to everything done by
it in relation to the New Shares and Subsequent Offering Shares in, from or otherwise involving the United
Kingdom.
This Prospectus and any other material in relation to the securities described herein is only being distributed to and is
only directed at persons in the United Kingdom (the “UK”) 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 the Prospectus 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 to 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.
15.2.3
European Economic Area
The Prospectus has been prepared on the basis that all offers of Subsequent Offering Shares outside Norway will be
made pursuant to an exemption under the Prospectus Directive, as implemented in member states of the EEA, from
the requirement to produce a prospectus for offer of shares. Accordingly, any person making or intending to make any
offer within the EEA of Shares which is the subject of the Private Placement and/or the Subsequent Offering
contemplated in this Prospectus within any EEA member state (other than Norway) should only do so in circumstances
in which no obligation arises for the Company or any of the Managers to produce a prospectus under the Prospectus
Directive for such offer. Neither the Company nor the Managers have authorized, nor do they authorize, the making of
any offer of Shares through any financial intermediary, other than offers made by Managers which constitute the final
placement of the Subsequent Offering Shares contemplated in this Prospectus.
In relation to each member state of the EEA other than Norway which has implemented the Prospectus Directive
(each, a “Relevant Member State”), an offer to the public of any Subsequent Offering Shares which are the subject
of the Private Placement and/or the Subsequent Offering contemplated by this Prospectus may not be made in that
Relevant Member State, except that an offer to the public in that Relevant Member State of any of the Shares may be
made at any time under the following exemptions from the Prospectus Directive, if they have been implemented in
that Relevant Member State:
a)
to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized
or regulated, whose corporate purpose is solely to invest in securities;
b)
to any legal entity which has two or more of (1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than EUR 43,000,000 and (3) an annual net turnover of
more than EUR 50,000,000, as shown in its last annual or consolidated accounts;
c)
by the Managers to fewer than 100 (or to fewer than 150 in a Relevant Member State having adopted
Directive 2010/73/EU amending the Prospective Directive) natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Joint Lead
Managers for any such offer; or
d)
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of the Subsequent Offering Shares shall result in a requirement for the publication by the
Company or any Managers of a Prospectus pursuant to Article 3 of the Prospectus Directive.
83
Nordic Nanovector AS – Prospectus
15.2.4
Other jurisdictions outside the United States and the European Economic Area
The Shares in the Private Placement and the Subsequent Offering Shares in the Subsequent Offering may not be
offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Canada, Japan, Australia, Hong Kong, or
any other jurisdiction in which it would not be permissible to offer the Shares or the Subsequent Offering Shares.
In jurisdictions outside the United States and the EEA where the Private Placement and/or the Subsequent Offering
would be permissible, the Shares and Subsequent Offering Shares will only be offered pursuant to applicable
exceptions from prospectus requirements in such jurisdictions.
15.3
Transfer restrictions
15.3.1
United States
The Subsequent Offering Shares have not been and will not be registered under the U.S. Securities Act and may not
be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the U.S. Securities Act and applicable state securities laws. Terms defined in Rule
144A or Regulation S shall have the same meaning when used in this section.
Each purchaser of the Subsequent Offering Shares outside the United States pursuant to Regulation S will be deemed
to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other
information as it deems necessary to make an informed decision and that:

The purchaser is authorised to consummate the purchase of the Subsequent Offering Shares in compliance
with all applicable laws and regulations.

The purchaser acknowledges that the Subsequent Offering Shares have not been and will not be registered
under the U.S. Securities Act, or with any securities regulatory authority or any state of the United States,
and are subject to significant restrictions on transfer.

The purchaser is, and the person, if any, for whose account or benefit the purchaser is acquiring the
Subsequent Offering Shares was located outside the United States at the time the buy order for the
Subsequent Offering Shares was originated and continues to be located outside the United States and has
not purchased the Subsequent Offering Shares for the benefit of any person in the United States or entered
into any arrangement for the transfer of the Subsequent Offering Shares to any person in the United States.

The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not in
the business of buying and selling securities or, if it is in such business, it did not acquire the Subsequent
Offering Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

The purchaser is aware of the restrictions on the offer and sale of the Subsequent Offering Shares pursuant
to Regulation S described in this Prospectus.

The Subsequent Offering Shares have not been offered to it by means of any “directed selling efforts‟ as
defined in Regulation S.

The Company shall not recognise any offer, sale, pledge or other transfer of the Subsequent Offering Shares
made other than in compliance with the above restrictions.

The purchaser acknowledges that the Company, the Managers and their respective advisers will rely upon
the truth and accuracy of the foregoing acknowledgements, representations and agreements.
15.3.2
European Economic Area
Each person in a Relevant Member State other than, in the case of paragraph (a), persons receiving offers
contemplated in this Prospectus in Norway who receives any communication in respect of, or who acquires any
Subsequent Offering Shares under, the offers contemplated in this Prospectus will be deemed to have represented,
warranted and agreed to and with the Managers and the Company that:
a)
it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article
2(1)(e) of the Prospectus Directive; and
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Nordic Nanovector AS – Prospectus
b)
in the case of any Subsequent Offering Shares acquired by it as a financial intermediary, as that term is
used in Article 3(2) of the Prospectus Directive, (i) such Shares acquired by it in the offer have not been
acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any
Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or
in circumstances in which the prior consent of the Managers has been given to the offer or resale; or (ii)
where such Shares have been acquired by it on behalf of persons in any Relevant Member State other than
qualified investors, the offer of those Shares to it is not treated under the Prospectus Directive as having
been made to such persons.
For the purposes of this provision, the expression an “offer to the public” in relation to any of the Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the
terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any of the Shares, as
the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member
State, and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.
15.3.3
Other jurisdictions outside the United States and the European Economic Area
For jurisdictions outside the United States and the EEA, other transfer restrictions may be in force. The distribution of
this Prospectus may be restricted by law in these jurisdictions. Any person in possession of this Prospectus should
inform themselves about and reserve such restrictions.
85
Nordic Nanovector AS – Prospectus
16
ADDITIONAL INFORMATION
16.1
Auditor and advisors
The Company’s independent auditor is Ernst & Young AS with registration number 976 389 387, and business address
Dronning Eufemias gate 6, NO-0191 Oslo. The partners of EY are a member of Den Norske Revisorforening (The
Norwegian Institute of Public Accountants).
ABG Sundal Collier (Munkedamsveien 45 Vika Atrium N-0250 Oslo, Norway) and DNB Markets (Dronning Eufemias
gate 30, N-0021 Oslo, Norway) are acting as Managers for the Offering.
Advokatfirmaet Thommessen AS (Haakon VII’s gate 10, N-0161 Oslo, Norway) is acting as legal counsel to the
Company.
Advokatfirmaet BA-HR DA (Tjuvholmen allé 16, N-0252 Oslo, Norway) is acting as legal counsel to the Managers.
16.2
Documents on display
Copies of the following documents will be available for inspection at the Company’s offices at Kjelsåsveien 168, N-0884
Oslo, Norway, during normal business hours from Monday to Friday each week (except public holidays) for a period of
twelve months from the date of this Prospectus:

The Company’s certificate of incorporation and Articles of Association;

All reports, letters, and other documents, historical financial information, valuations and statements
prepared by any expert at the Company’s request any part of which is included or referred to in this
Prospectus;

The historical financial information of the Company and its subsidiary undertakings for each of the two
financial years preceding the publication of this Prospectus; and

This Prospectus.
86
Nordic Nanovector AS – Prospectus
17
DEFINITIONS AND GLOSSARY
In the Prospectus, the following defined terms have the following meanings:
2010 PD Amending Directive .........
Directive 2010/73/EU amending the EU Prospectus Directive.
ABG Sundal Collier .......................
ABG Sundal Collier Norge ASA.
Antigen ......................................
The molecule that a specific monoclonal antibody binds to, e.g. a protein on a tumour cell
surface.
Anti-Money Laundering Legislation .
The Norwegian Money Laundering Act no. 11 of 6 March 2009 and the Norwegian Money
Laundering Regulations no. 302 of 13 March 2009, collectively.
Articles of Association ...................
The Company’s articles of association attached as Appendix A of this Prospectus.
B-cell .........................................
B-cells are a type of lymphocyte (white blood cell) in the humoral immunity of the body’s
adaptive immune system. B cells can be distinguished from other lymphocytes, such as T cells
and natural killer cells (NK cells), by the presence of a protein on the B cell's outer surface
known as a B cell receptor (BCR). This specialized receptor protein allows a B cell to bind to a
specific antigen.
The principal functions of B cells are to make antibodies against antigens, to perform the role of
antigen-presenting cells (APCs), and to develop into memory B cells after activation by antigen
interaction. B cells also release cytokines (proteins), which are used for signalling immune
regulatory functions
Betalutin ....................................
The Company’s most advances product candidate against non-Hodgkin Lymphoma. It is based
on 177 Lu conjugates to CD37-binding HH1 monoclonal antibody.
Board members ...........................
Members of the Board of Directors.
Board of Directors ........................
The board of directors of the Company.
CAGR .........................................
Compound annual growth rate.
CET ...........................................
Central European Time.
Chimeric Antibody ........................
Different species make slightly different antibodies. Monoclonal antibodies are typically made in
mice and rats. A chimeric antibody is an antibody where the backbone of the mouse antibody,
which is not bind to the antigen, has been replaced by a human antibody backbone.
Clinical Research .........................
The research phases involving human subjects.
Clinical Trials...............................
Clinical Trials are conducted with human subjects to allow safety and efficiency data to be
collected for health inventions (e.g., drugs, devices, therapy protocols). There trials can only
take place once satisfactory information has been gathered on the quality of the non-clinical
safety, and Health Authority/Ethics Committee approval is granted in the country where the trial
is taking place.
CLL ............................................
Chronic lymphatic leukemia, B-cell chronic lymphocytic leukemia (BCLL), also known as chronic
lymphoid leukemia (“CLL”), is the most common type of leukemia. Leukemias are cancers of the
white blood cells (leukocytes). CLL affects B cell lymphocytes. B cells originate in the bone
marrow, develop in the lymph nodes, and normally fight infections by producing antibodies.
Originates from a lymphocyte (usually a B-lymphocyte) and spreads and develops mainly in the
bone marrow and blood.
CMO’s ........................................
Contract manufacturing organizations.
Company ....................................
Nordic Nanovector AS.
Corporate Governance Code ..........
The Norwegian Code of Practice for Corporate Governance dated 23 October 2012.
CRO’s ........................................
Contract research organizations.
DLBCL ........................................
Diffuse Large B-cell Lymphoma.
DNB Markets ...............................
DNB Markets, a part of DNB Bank ASA.
EC .............................................
European Commission.
EEA ...........................................
The European Economic Area.
Eligible Shareholders ....................
The shareholders of the Company as of 27 June 2014 (and being registered as such in the VPS
on 2 July 2014 pursuant to the three days’ settlement procedure in VPS (the Record Date),
other than shareholders in jurisdictions other than Norway and where an offer to participate in
the share issue is not allowed or would require approval or registration of a prospectus or
similar measures, may subscribe for and be allocated new Shares in the Subsequent Offering.
EMA ...........................................
European Medicines Agency.
EU .............................................
The European Union.
EU Prospectus Directive ................
Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003, and
amendments thereto, including the 2010 PD Amending Directive to the extent implemented in
the Relevant Member State.
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Nordic Nanovector AS – Prospectus
EY .............................................
Ernst & Young AS, the Company’s auditor.
FDA ...........................................
U.S. Food and Drug Administration.
Financial Statements ....................
The audited financial statements for the Company as of, and for the years ended, 31 December
2013 and 2012.
FL .............................................
Follicular Lymphoma.
General Meeting ..........................
The general meeting of the shareholders in the Company.
Good Manufacturing Processes .......
Good manufacturing practices are the practices required in order to conform to guidelines
recommended by agencies that control authorization and licensing for manufacture and sale of
food, drug products, and active pharmaceutical products. These guidelines provide minimum
requirements that a pharmaceutical or a food product manufacturer must meet to assure that
the products are of high quality and do not pose any risk to the consumer or public. Good
manufacturing practices, along with good laboratory practices and good clinical practices, are
overseen by regulatory agencies in the United States, Canada, Europe, China, in addition to
other countries.
Half Life .....................................
The time required to reduce a given amount of any radionuclide to half its initial level.
Radioactivity is decaying exponentially (i.e., after 1 half life – 50% is left; after 2 half lives –
25% is left; after 3 half lives – 12.5% is left).
HealthCap...................................
HealthCap VI L.P.
Hybridoma Technology .................
Hybridoma Technology is a technology of forming hybrid cell lines (called hybridomas) by fusing
a specific antibody-producing B cell with a myeloma (B cell cancer) cell that is selected for its
ability to grow into tissue culture and for an absence of antibody chain synthesis. The antibodies
produced by the hybridoma are all of a single specificity and are therefore monoclonal
antibodies (in contracts to polyclonal antibodies). The production of monoclonal antibodies (in
contrast to polyclonal antibodies). The production of monoclonal antibodies was invented by
Cesar Milstein, George J. F. Köhler and Niels Kaj Jerne in 1975.
IAS ............................................
International Accounting Standard.
IFE ............................................
Institute for Energy Technology.
IFRS ..........................................
International Financial Reporting Standards as adopted by the EU.
Indolent NHL ...............................
A lymphoma that tends to grow and spread slowly. Indolent NHL includes chronic lymphocytic
lymphoma and follicular cell lymphoma.
IFE ............................................
Institute for Energy Technology in Norway.
Interim Financial Information.........
The Company’s unaudited interim financial information statements as of, and for the three and
six months periods ended, 30 June 2014 and 2013.
Lock-up Undertaking ....................
The lock-up agreement entered into by the Managers with certain shareholders, under which
each such shareholder has agreed that it will not, for a period of six months from 27 June 2014,
offer, sell, contract to sell, pledge, mortgage, grant any option to purchase or otherwise dispose
of any Shares (or any other securities convertible into Shares) without the prior written consent
of the Managers.
Management ...............................
The senior management team of the Company.
Managers ...................................
ABG Sundal Collier and DNB Markets, collectively.
Member States ............................
The participating member states of the European Union.
MOA ..........................................
Method of action.
Monoclonal antibody ....................
Monoclonal antibodies (mAb or moAb) are monospecific antibodies that each are identical
because they are made by one type of immune call that are all clones of a uniwue parent cell.
Given almost any substance, it is possible to create monoclonal antibodies that specifically bind
to it.
MOS ..........................................
Median overall survival.
Murine monoclonal antibody ..........
Murine monoclonal antibody is a monoclonal antibody of mouse origin. Monoclonal antibodies
(mAb or moAb) are monospecific antibodies that are the same because they are made by
identical immune cells that are all clones of a unique parent cell, in contrast to polyclonal
antibodies which are made from several different immune cells. Monoclonal antibodies have
monovalent affinity, in that they bind to the same epitope.
Given almost any substance, it is possible to produce monoclonal antibodies that specifically
bind to that substance; they can then serve to detect or purify that substance. This has become
an important tool in biochemistry, molecular biology and medicine. When used as medications,
the non-proprietary drug name ends in -mab (see "Nomenclature of monoclonal antibodies"),
and many immunotherapy specialists use the word mab anacronymically.
Nanovector .................................
Nanovectors in general have at least a tripartite constitution, featuring a core constituent
material, a therapeutic and/or imaging payload, and 36 biological surface modifiers, which
enhance
the
biodistribution
and
tumour
targeting
Radioimmunoconjugates belong to a subclass of nanovectors.
88
of
the
nanosized
compound.
Nordic Nanovector AS – Prospectus
NHL ...........................................
The non-Hodgkin lymphomas (NHLs) are a diverse group of blood cancers that include any kind
of lymphoma except Hodgkin lymphomas. Types of NHL vary significantly in their severity, from
indolent to very aggressive. Originates from a lymphocyte (usually a B-lymphocyte) and spreads
and develops mainly in the lymph nodes.
NN-CHH1....................................
The Company’s immunotherapeutic supplementary agent against CLL under development.
Patent application to be submitted.
NOK ..........................................
Norwegian Kroner, the lawful currency of Norway.
Non-Norwegian Corporate
Shareholders who are limited liability companies (and certain other entities) not resident in
Shareholders...............................
Norway for tax purposes.
Non-Norwegian Personal
Shareholder ................................
Shareholders who are individuals not resident in Norway for tax purposes.
Norwegian Corporate Shareholders .
Shareholders who are limited liability companies and certain similar corporate entities resident
in Norway for tax purposes.
Norwegian FSA ............................
The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet).
Norwegian Personal Shareholder ....
Shareholders who are individuals resident in Norway for tax purposes.
Norwegian Private Limited
Companies Act ............................
The Norwegian Private Limited Companies Act of 13 June 1997 No 44 (Nw.: aksjeloven).
Norwegian Securities Trading Act ...
The Norwegian Securities Trading Act of 29 June 2007 No 75 (Nw.: verdipapirhandelloven).
NOTC .........................................
Norwegian OTC is an information system for unlisted shares. It is not a regulated stock
exchange.
Nuclide.......................................
Nuclide is an atomic species characterized by the specific constitution of its nucleus, i.e., by its
number of protons Z, its number of neutrons N, and its nuclear energy state. The word nuclide
was proposed by doctor Truman P. Kohman in 1947. Kohman originally suggested nuclide as
referring to a "species of nucleus" defined by containing a certain number of neutrons and
protons. The word thus was originally intended to focus on the nucleus.
Order .........................................
The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended.
Orphan drug designation ...............
An orphan drug is a pharmaceutical agent that has been developed specifically to treat a rare
medical condition, the condition itself being referred to as an orphan disease. In the US and EU
it is easier to gain marketing approval for an orphan drug, and there may be other financial
incentives, such as extended exclusivity periods, all intended to encourage the development of
drugs which might otherwise lack a sufficient profit motive. The assignment of orphan status to
a disease and to any drugs developed to treat it is a matter of public policy in many countries,
and has resulted in medical breakthroughs that may not have otherwise been achieved due to
the economics of drug research and development. Pharmaceutical agents that are given orphan
drug status are said to have received Orphan Drug Designation.
OOPD.........................................
FDA’s Office of Orphan Products Development.
Payment Date .............................
The payment date for the Subsequent Offering Shares, being 17 September 2014.
PCP ...........................................
Primary-care physician.
Pharmacokinetics .........................
Pharmacokinetics is sometimes abbreviated as PK (from Ancient Greek pharmakon "drug" and
kinetikos "moving, putting in motion), is a branch of pharmacology dedicated to determining the
fate of substances administered externally to a living organism. The substances of interest
include pharmaceutical agents, hormones, nutrients, and toxins. It attempts to discover the fate
of a drug from the moment that it is administered up to the point at which it is completely
eliminated from the body. Pharmacokinetics describes how the body affects a specific drug after
administration through the mechanisms of absorption and distribution, as well as the chemical
changes of the substance in the body (e.g. by metabolic enzymes such as cytochrome P450 or
glucuronosyltransferase enzymes), and the effects and routes of excretion of the metabolites of
the drug. Pharmacokinetic properties of drugs may be affected by elements such as the site of
administration and the dose of administered drug. These may affect the absorption rate.
Preclinical research ......................
The research phases leading up to human trial.
Prospectus ..................................
This Prospectus dated 28 August 2014.
QIBs ..........................................
Qualified institutional buyers as defined in Rule 144A.
Radioimmunoconjugates ...............
Radioimmunoconjugate is defined as an antibody labeled with a radionuclide that is used to
deliver cytotoxic radiation to a target cell. In cancer therapy, an antibody with specificity for
tumor-associated therapeutic receptors is used to deliver a lethal dose of radiation to the tumor
cells. The ability for the antibody to specifically bind to a tumor-associated antigen increases the
dose delivered to the tumor cells while decreasing the dose to normal tissues.
Radionucleid ...............................
A radioactive isotope of an element.
R-CHOP ......................................
A drug consisting of the pharmaceutical products: Rituxamab, cyclophosphamide, doxorubicin,
vincristine, and prednisone.
2 July 2014.
Record Date ................................
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Nordic Nanovector AS – Prospectus
Regulation S ...............................
Regulation S under the U.S. Securities Act.
Relevant Member State ................
Each Member State of the European Economic Area which has implemented the EU Prospectus
Directive.
Relevant Persons ........................
Persons in the United Kingdom that are (i) investment professionals falling within Article 19(5)
of the Order or (ii) high net worth entities, and other persons to whom the Prospectus may
lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order.
RIC ............................................
Radioimmunoconjugate. A radiolabeled monoclonal antibody. A radionuclide is attached to the
antibody to form a RIC. RIC is classified as a nanovector.
RIT ............................................
Radioimmunotherapy –Therapy by the administration of a RIC.
Rule 144A...................................
Rule 144A under the U.S. Securities Act.
Share(s) .....................................
Means the shares of the Company, each with a nominal value of NOK 0.20, or any one of them,
including the Subsequent Offering Shares.
Subscription Form ........................
The subscription form to be used to apply for Subsequent Offering Shares in the Offering,
attached to this Prospectus as Appendix D.
Subscription Period ......................
From 1 September 2014 to 16:00 hours (CET) on 12 September 2014.
Subscription Price ........................
The subscription price for the Subsequent Offering Shares, being NOK 25.
Subscription Rights ......................
Non-transferable subscription rights that, subject to applicable law, provide the right to
subscribe for and be allocated Subsequent Offering Shares at the Subscription Price.
Subsequent Offering.....................
The offering of up to 2,000,000 Subsequent Offering Shares on the terms and conditions set out
in this Prospectus.
Subsequent Offering Shares ..........
Up to 2,000,000 new Shares in the Company to be issued in connection with the Subsequent
Offering Shares.
Therapeutic receptor ....................
Therapeutic receptor is a protein molecule usually found embedded within the plasma
membrane surface of a cell, that receives chemical signals from outside the cell. When such
chemical signals from pharmaceutical agents/therapies bind to a receptor, they cause a form of
cellular/tissue response, e.g. a change in the electrical activity of the cell. In this sense, a
receptor is a protein molecule that recognises and responds to endogenous chemical signals
that can originate from pharmaceutical treatments.
U.S. or United States....................
The United States of America.
U.S. Exchange Act .......................
The U.S. Securities Exchange Act of 1934, as amended.
U.S. Securities Act .......................
The U.S. Securities Act of 1933, as amended.
USD or U.S. Dollar .......................
United States Dollars, the lawful currency of the United States.
VPS ...........................................
The Norwegian Central Securities Depository (Nw.: Verdipapirsentralen).
VPS account ................................
An account with VPS for the registration of holdings of securities.
WHO ..........................................
World Health Organization.
90
APPENDIX A:
ARTICLES OF ASSOCIATION
(OFFICE TRANSLATION)
ARTICLES OF ASSOCIATION
for
Nordic Nanovector AS
(as of 27 June 2014)
§1
The Company’s name is Nordic Nanovector AS.
§2
The Company’s registered office is in Oslo.
§3
The Company’s purpose is to develop, market and sell medical products and equipment and related services in
connection to this.
§4
The Company’s share capital is NOK 4 564 275 and is divided into 22 821 375 shares. The nominal value per share is
NOK 0,20. The shares will be registered with the Norwegian Central Securities Depository.
§5
The Board of Directors shall consist of 3 to 9 members and will be elected by the General Meeting of the Company.
§6
The Chairman of the Board and one additional Board Member have together the right to sign on behalf of the
Company. The Board can further grant power of attorney.
§7
There are no limitations on the transferability of the Company’s shares. Share transfers do not require the consent of
the company (cf. asl § 4-15), and the shareholders do not have any right of first refusal (asl. cf. 4-19).
§8
The annual General Meeting shall be held every year before the end of June. The notice for the General Meeting shall
be in writing and shall be handed down one week before the General Meeting. The notice shall include a list of the
matters that will be discussed at the General Meeting. The Chairman of the Board is leading the General Meeting if no
other person is elected to lead.
§9
The annual General Meeting shall attend to and decide the following matters:
1
Approval of the financial statements, decide how to use annual profits or cover annual loss, including
distribution of dividends.
2
Determine the fee of the Directors’, the Election Committee and the Accountant.
3
Elect members to the Board of Directors, the Election Committee and if necessary an Accountant.
4
Other issues, which according to the law or the Articles of Association belong with the General Meeting.
§ 10
An extraordinary general meeting will be held if the Board of Directors finds it necessary, or if the shareholders that
represents at least 10% of the share capital demands it.
Notice of an extraordinary general meeting shall be given at least 8 days before the meeting. It is only the matters
listed in the notice that can be decided upon at the extraordinary general meeting.
§ 11
Documents relating to matters that will be considered at the General Meeting, including documents which by law
should be included in or attached to the notice, do not have to be sent to the shareholders if the documents are
available on the Company’s website. A shareholder is nevertheless entitled to demand that documents relating to
matters that will be considered at the General Meeting are being sent to the shareholders address.
§ 12
The Company shall have a Nomination Committee. The Nomination Committee shall consist of four members whom
will be elected by the General Meeting. The Nomination Committee’s main tasks are to prepare elections to the Board
and to recommend for the General Assembly the salaries of the board members. The General Meeting may adopt
instructions concerning the work of the Nomination Committee.
APPENDIX B:
FINANCIAL STATEMENTS FOR THE YEARS ENDED
31 DECEMBER 2013 AND 2012
APPENDIX C:
UNAUDITED INTERIM FINANCIAL INFORMATION FOR THE SIX
MONTHS ENDED 30 JUNE 2014
Second Quarter Report 2014
Nordic Nanovector AS
Nordic Nanovector – Second Quarter Report 2014
Table of Contents
Table of Contents
Company in brief ...................................................................................................................................................... 2
Highlights for second quarter 2014 .......................................................................................................................... 2
Key figures ............................................................................................................................................................... 2
Operational review .................................................................................................................................................. 3
Financial review ....................................................................................................................................................... 3
Risk and uncertainty factors for 2014 ....................................................................................................................... 4
Outlook .................................................................................................................................................................... 4
Interim statement of profit or loss and other comprehensive income ..................................................................... 5
Interim statement of financial position .................................................................................................................... 6
Interim condensed statement of changes in equity.................................................................................................. 7
Interim condensed statement of cash flows ............................................................................................................. 8
Nordic Nanovector AS – Notes to the condensed interim financial statements
for the six months ended 30 June 2014 .................................................................................................................... 9
Note 1. General information ...................................................................................................................................... 9
Note 2. Basis for preparation and significant accounting policies ............................................................................. 9
Note 3. Critical accounting judgments and key sources of estimation uncertainty ................................................ 13
Note 4. Government grants ..................................................................................................................................... 14
Note 5. Share-based payments ................................................................................................................................ 15
Note 6. Share capital and shareholder information ................................................................................................ 16
Note 7. Shareholder information ............................................................................................................................. 16
Note 8. Transactions with related parties ............................................................................................................... 17
Note 9. Earnings per share....................................................................................................................................... 17
Note 10. Events after the reporting date................................................................................................................. 18
Note 11. Transition to IFRS ...................................................................................................................................... 19
Responsibility statement 30 June 2014 (unaudited) ................................................................................................. 22
Page 1 of 23
Nordic Nanovector – Second Quarter Report 2014
Company in brief
Nordic Nanovector AS was established in 2009 by Roy H. Larsen and Inven2 AS on behalf of the co-inventors of
BetalutinTM, Øyvind S. Bruland and Jostein Dahle. The Company’s mission is to develop innovative
radioimmunotherapeutics that target difficult to treat cancers using the Company’s proprietary nanovector targeting
technology. The lead product candidate Betalutin™ consists of lutetium-177, conjugated to a tumor seeking murine
monoclonal antibody, HH1, against CD37 antigen, which can be used for irradiation of malignant metastasized
tumors with minimal damage to nearby healthy normal tissue. Betalutin™ aims to prolong and improve the quality
of life of people who suffer from non-Hodgkin Lymphoma (NHL). The product candidate is currently undergoing a
phase II of a phase I/II dose-escalating clinical trial for treatment of relapsed NHL.
Highlights for second quarter 2014
•
The lead product candidate BetalutinTM has been granted orphan drug designation for treatment of
follicular lymphoma in Europe and in the USA.
Orphan drug designation will provide the Company several advantages, including protocol assistance and
reduced costs related to the clinical development program, as well as commercial exclusivity for ten years,
once the product reaches the market in Europe and seven years exclusivity in USA.
•
Successful closing of NOK 250 million pre-IPO private placement.
The private placement, which was directed towards existing shareholders as well as new institutional and
professional investors, attracted strong investor interest and was increased from NOK 150 million to
NOK 250 million on the basis of strong demand from institutional investors. The private placement was
significantly oversubscribed. The Board of Directors allocated 10,000,000 new shares at a price of NOK 25
per share which was approved in an Extraordinary General Meeting 27 June 2014. A repair issue of up to
2,000,000 shares will be conducted in August/September.
Key figures
Amounts in NOK
Three months ended 30 June
Six months ended 30 June
2014
2013
Change
2014
2013
Change
118 461
56 376
62 085
236 604
167 879
68 725
15 833 158
3 201 168
12 631 990
27 842 864
5 496 431
22 346 433
-15 714 697
-3 144 792
-12 569 905
-27 606 260
-5 328 552
-22 277 708
496 034
70 143
425 891
1 040 241
95 255
944 986
-15 218 663
-3 074 649
-12 144 014
-26 566 019
-5 233 297
-21 332 722
Basic and diluted earnings (loss) per share
-1,32
-0,44
-0,93
-2,34
-0,79
-1,55
Man years
13,0
8,0
5
13,0
8,0
5
-16 046 674
59 350 664
-75 397 338
-27 922 231
55 410 333
-83 332 564
67 693 445
2 729 604
64 963 841
79 569 002
6 669 935
72 899 067
51 646 771
62 080 268
-10 433 497
51 646 771
62 080 268
-10 433 497
Total operating revenue
Net total operating expenses
Operating profit (loss)
Financial items, net
Total comprehensive income (loss)
for the period
Net change in bank deposits, cash and
equivalents
Cash and equivalents at beginning of period
Cash and equivalents at end of period
Page 2 of 23
Nordic Nanovector – Second Quarter Report 2014
Operational review
The product candidate BetalutinTM is currently undergoing a phase II of a phase I/II open-label clinical trial for
treatment of relapsed non-Hodgkin Lymphoma (NHL).
The Company has completed the patient inclusion in phase I of the clinical study, the phase I study will be concluded
when final tests have been analysed. The phase I part of the study was a dose escalating study which objective was
to define the maximum tolerable dose of BetalutinTM, assess safety, toxicity, pharmacokinetics, bio distribution and
efficacy of BetalutinTM. The preliminary phase I data indicates that BetalutinTM can be safely administered to patients
with NHL. The phase I study is expected to be finalised in Q3 2014. Approximately ten patients have been enrolled in
the phase I/II trials. It is too early to know whether patients will have a significant long term benefit from
BetalutinTM, but it has been observed that BetalutinTM has a clinically relevant effect at all dose levels administered
during phase I. The primary objective in phase II is to investigate tumour response rate in patients receiving
BetalutinTM. Secondary objectives include confirming the recommended dose of BetalutinTM, to investigate the
safety and toxicity, to measure progression free survival and to estimate overall survival.
During the second quarter of 2014, Nordic Nanovector has strengthened the organization by hiring 3 new
employees. They will all start in their new positions during the third quarter.
Financial review
The financial report as of 30 June 2014 has been prepared in accordance with the International Accounting Standard
(IFRS) 34 interim financial reporting.
Income statement
Revenues for the second quarter and first half of 2014 amounted respectively to NOK 118,461 (2013: NOK 56,376)
and NOK 236,604 (2013: 167,879). Revenues relate to incubator services and sublease of office and laboratory. Net
operating expenses increased from NOK 3,201,168 in second quarter 2013 to NOK 15,833,158 in second quarter of
2014. Net operating expenses for the first half of 2014 amounted to NOK 27,842,864 compared to NOK 5,496,431
for the first half of 2013. This was driven by a larger organization and increase in clinical trial cost. Nordic
Nanovector’s income statement shows a net loss of NOK – 15,218,663 in second quarter of 2014
(2013: NOK - 3,074,658) and a net loss of NOK – 26,566,019 in first half of 2014 (2013: NOK – 5,233,297).
Financial position and cash flow
Property, plant and equipment decreased from NOK 659,387 end of March 2014 to NOK 622,040, reflecting
investment of NOK 36,738 in IT hardware and depreciation of NOK 74,085. As of 30 June 2014, liabilities totalled
NOK 6,986,448 compared to NOK 5,688,938 at end March 2014. Net cash flow from operating activities was
NOK – 28,012,439 in the first half of 2014 compared to NOK – 6,834,760 in the first half of 2013. Net cash flow from
investing activities was NOK – 444,792 in first half of 2014 (2013: 0).
Net cash flow from financing activities was NOK 535,000 due to an exercise of share options (employees) in Q1 2014
compared to NOK 62,245,093 for the first half of 2013. 4,203,910 new shares were issued in June 2013 after a
successful rights issue. Cash and cash equivalents were NOK 51,646,771 at 30 June 2014 compared to
NOK 62,080,268 at 30 June 2013. The 10,000,000 new shares from the private placement approved by the
Extraordinary General Meeting 27 June 2014 were paid for 3 July 2014 and the share capital increase was registered
with the Norwegian Registry of Business Enterprises on 4 July 2014. The capital increase is therefore not included in
the financial position and cash flow for the first half of 2014.
Page 3 of 23
Nordic Nanovector – Second Quarter Report 2014
Shareholders’ equity was NOK 52,210,215 at 30 June 2014, an equity ratio of 88 %. At the end of 30 March 2014,
shareholders’ equity was NOK 67,989,720 (92 %). The total number of outstanding shares as of 30 June 2014 was
12,821,375. In addition to the private placement of 10,000,000 new shares, a further 1,666,666 shares will be issued
to HealthCap VI L.P. when the second tranche is concluded (see note 8). In August/September the Company will
effect a subsequent repair issue of up to 2,000,000 new shares at a subscription price of NOK 25 per share
(see note 7). The total number of outstanding share options as of June 30 2014 was 173,333.
Risk and uncertainty factors for 2014
Nordic Nanovector AS is exposed to uncertainties and risk factors, which may affect some or all of the activities.
•
•
•
•
•
The Company is in a relatively early stage of development and the Company’s clinical studies may not prove to
be successful.
The success, competitive position and future revenues will depend in part on the Company’s ability to protect
intellectual property and know-how.
The Company operates in a highly competitive industry.
The Company relies, and will continue to rely, upon third-parties for clinical trials and manufacturing.
The Company is reliant on key personnel and the ability to attract new, qualified personnel.
Outlook
The objectives for the next 12 months:
•
•
•
•
•
•
Initiate the Lymrit-37-01 trial at additional Phase II study centers in EU (non-Hodgkin Lymphoma).
Complete enrollment of 30 patients in Phase II Indolent non-Hodgkin Lymphoma study.
Publish/present Betalutin™ Phase I results in Indolent non-Hodgkin Lymphoma.
Establish multiple regional manufacturing sites for production of Betalutin™.
Achieve orphan designation of aggressive lymphomas in EU and USA.
Initiation of Phase I/II in aggressive lymphomas.
Non-Hodgkin Lymphoma (NHL) is a disease that is incurable in the majority of patients and that needs new forms of
treatment. Nordic Nanovector is attempting to address the unmet medical need in the treatment of NHL by
developing a product that targets a novel therapeutic receptor (CD37) on cancer cells. By attacking the CD37
receptor on the cancer cells, Nordic Nanovector hopes to successfully treat patients that fail to respond to currently
approved therapies. The initial target market area for the Company is the second-line of treatment of Follicular
Lymphoma (FL). The Company believes that its longer term potential lies in becoming part of the standard of care in
the first-line of treatment of FL.
In the event the ongoing Phase I/II clinical trial demonstrates that Betalutin™ has a significant and lasting clinical
effect on FL patients, the Company intends to pursue an accelerated approval process to bring the product to
market more quickly than would normally be expected. The Company targets completion of its ongoing Phase I/II
study in Q3 2015.
The Board has today appointed Mr. Luigi Costa as new CEO of Nordic Nanovector. He will take over as CEO on the 1st
September 2014.
Oslo, 26 August 2014
The Board of Directors
Nordic Nanovector AS
Page 4 of 23
Nordic Nanovector – Second Quarter Report 2014
Interim statement of profit or loss and other comprehensive income
Amounts in NOK
For the three months
ended 30 June
For the six months
ended 30 June
2014
2013
Revenues
118 461
56 367
Total operating revenue
118 461
56 367
2 845 723
977 476
2014
For the full
year ended
2013
2013
236 604
167 879
306 061
236 604
167 879
306 061
5 923 805
2 233 530
5 247 252
Continuing operations
Payroll and related expenses
Depreciation
74 085
40 042
140 854
173 291
236 788
Other operating expenses
12 913 350
2 183 650
21 778 205
3 089 610
12 933 131
Total operating expenses
15 833 158
3 201 168
27 842 864
5 496 431
18 417 171
-15 714 697
-3 144 801
-27 606 260
-5 328 552
-18 111 110
496 099
70 143
1 040 375
95 449
1 206 884
Operating profit (loss)
Finance income and finance expenses
Finance income
Finance expenses
Financial items, net
Loss before income tax
Income tax
Loss for the period
65
0
134
194
106 711
496 034
70 143
1 040 241
95 255
1 100 173
-15 218 663
-3 074 658
-26 566 019
-5 233 297
-17 010 937
0
0
0
0
0
-15 218 663
-3 074 658
-26 566 019
-5 233 297
-17 010 937
Other comprehensive income (loss), net of income tax
Other comprehensive income (loss), net of income tax
0
0
0
0
0
Total comprehensive income (loss) for the period
-15 218 663
-3 074 658
-26 566 019
-5 233 297
-17 010 937
Loss for the period attributable to owners of the company
-15 218 663
-3 074 658
-26 566 019
-5 233 297
-17 010 937
-15 218 663
-3 074 658
-26 566 019
-5 233 297
-17 010 937
-1,32
-0,44
-2,34
-0,79
-1,92
Total comprehensive income (loss) for the
period attributable to owners of the company
Earnings (loss) per share
Basic and diluted earnings (loss) per share
Page 5 of 23
Nordic Nanovector – Second Quarter Report 2014
Interim statement of financial position
Amounts in NOK
30.06.2014
31.03.2014
31.12.2013
Property, plant and equipment
622 040
659 387
335 949
Total property, plant and equipment
622 040
659 387
335 949
Other non-current receivables
44 800
44 800
44 800
Total non-current receivables
666 840
704 187
380 749
Other receivables
6 883 052
5 281 027
6 072 958
Total receivables
6 883 052
5 281 027
6 072 958
Cash and cash equivalents
51 646 771
67 693 445
79 569 002
Total current assets
58 529 823
72 974 471
85 641 960
TOTAL ASSETS
59 196 663
73 678 658
86 022 709
ASSETS
Non-current assets
Receivables
Current assets
Receivables
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital
Share premium
Other reserves
2 564 275
2 230 942
2 214 942
116 152 479
92 471 684
92 544 684
831 651
25 406 621
25 389 837
-67 338 190
-52 119 527
-41 364 171
52 210 215
67 989 720
78 785 292
Accounts payable
2 730 487
845 829
4 499 213
Other current liabilities
4 255 961
4 843 109
2 738 204
Total current liabilities
6 986 448
5 688 938
7 237 417
Total liabilities
6 986 448
5 688 938
7 237 417
59 196 663
73 678 658
86 022 709
Retained earnings (accumulated losses)
Total shareholders' equity
Liabilities
Current liabilities
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES
Page 6 of 23
Nordic Nanovector – Second Quarter Report 2014
Interim condensed statement of changes in equity
For the period ended 30 June
Share
capital
Share
premium
reserve
Convertible
instruments
Equity-settled
share-based
payments
Accumulated
losses
Total
equity
1 277 268
30 058 814
0
698 283
-24 353 234
7 681 131
Loss for the period
Other comprehensive income (loss) for the
period net of income tax
-5 233 297
-5 233 297
0
0
Total comprehensive income for the period
-5 233 297
-5 233 297
Amounts in NOK
Balance at 1 January 2013
Convertible instruments
0
Recognition of share-based payments
Issue of ordinary shares
Issue of ordinary shares under share options
0
65 522
840 782
59 531 852
14 333
459 417
Conversion of convertible loan
65 522
60 372 634
473 750
0
Share issue costs
0
-2 601 291
-2 601 291
Balance at 30 June 2013
2 132 383
87 448 792
0
763 805
-29 586 530
60 758 450
Balance at 1 January 2014
2 214 942
92 544 684
24 591 975
797 862
-41 364 171
78 785 292
Loss for the period
Other comprehensive income (loss) for the
period net of income tax
-26 566 019
-26 566 019
0
0
Total comprehensive income for the period
-26 566 019
-26 566 019
Convertible instruments
0
Recognition of share-based payments
Issue of ordinary shares
Issue of ordinary shares under share options
Conversion of convertible loan
Share issue costs
Balance at 30 June 2014
Page 7 of 23
33 789
0
33 789
0
16 000
519 000
333 333
24 258 642
0
-577 847
2 564 275
116 152 479
0
535 000
-24 591 975
0
-577 847
0
831 651
-67 338 190
52 210 215
Nordic Nanovector – Second Quarter Report 2014
Interim condensed statement of cash flows
For the six months ended June 30
Amounts in NOK
Full year
2014
2013
2013
-26 566 019
-5 233 297
-17 010 937
0
0
-106 301
0
0
1 130 824
33 789
65 522
99 579
0
0
592 000
140 854
173 291
236 788
Cash flows from operating activities
Loss for the period
Adjustments for:
Interest paid
Interest received
Share option expense employees
Share option expense BoD
Depreciation
Change in trade receivables
Change in trade payables
Changes in receivables related to grants
-60 067
46 810
37 056
-1 768 726
-1 699 494
2 413 855
846 132
62 792
-1 162 204
Changes in other current assets
-1 686 688
-132 763
-2 094 180
Changes in other current liabilities
1 048 286
-117 621
1 635 344
-28 012 439
-6 834 760
-14 228 176
Outflows from acquisition of fixed assets
-444 792
0
-296 277
Net cash flows from investing activities
-444 792
0
-296 277
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities
Proceeds from new debt
0
4 000 000
0
Proceeds from equity issue
535 000
58 245 093
87 423 519
Net cash flows from financing activities
535 000
62 245 093
87 423 519
-27 922 231
55 410 333
72 899 066
Net change in bank deposits, cash and equivalents
Cash and equivalents at beginning of period
79 569 002
6 669 935
6 669 935
Cash and equivalents at end of period
51 646 771
62 080 268
79 569 001
Page 8 of 23
Nordic Nanovector – Second Quarter Report 2014
Nordic Nanovector AS – Notes to the condensed interim financial statements for
the six months ended 30 June 2014
Note 1. General information
Nordic Nanovector AS ("the Company") is a limited company incorporated and based in Oslo, Norway. The address
of the registered office is Kjelsåsveien 168 B, 0884 Oslo.
The company is developing innovative anticancer therapeutics based on a tumor targeted antibody based
nanovector. The lead product candidate, Betalutin™, is a radionuclide conjugated to a tumor seeking
carrier/antibody, which can be used for irradiation of malignant metastasized tumors with minimal damage to
nearby healthy normal tissue. This technology aims to prolong and improve the quality of life of people who suffer
from hematologic cancer. Betalutin™ is currently undergoing a Phase I/II dose-escalating clinical trial for treatment
of relapsed non-Hodgkin Lymphoma.
The figures in this first half year 2014 report are non-audited figures.
These financial statements have been approved for issue by the Board of Directors on 26 August 2014.
Note 2. Basis for preparation and significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied in all periods presented. Amounts are in Norwegian kroner (NOK) unless
stated otherwise. The currency of the Company is NOK.
Basis of preparation
The financial statements of Nordic Nanovector AS have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union and Norwegian disclose requirements listed in the
Norwegian Accounting Act. The financial statements have been prepared on the historical cost basis. The
preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgments in applying the Company's accounting policies. Areas
involving a high degree of judgment or complexity, and areas in which assumptions and estimates are significant to
the financial statements are disclosed in Note 4.
With the pre-IPO private placement of NOK 250 million closed in June and the following repair issue, the Company
will under current planning assumptions have adequate liquidity and equity significantly longer than 12 moths from
the date of this report. The Company therefore adopts the going concern basis in preparing its condensed interim
financial statements.
Revenue recognition
Revenue comprises the fair value of consideration received or due consideration for the sale of services in regular
business activities. Revenue is presented net of value added tax.
The Company's products are still in the research and development phase, and it has no revenue from sales of
products yet. Revenue arises from services related to incubator services, rent out of employees and income from
sublease of laboratory space, instruments and services shared with other companies.
Page 9 of 23
Nordic Nanovector – Second Quarter Report 2014
Government grants
Contributions from the government are recognized at the value of the contributions at the transaction date.
Contributions are not recognized until it is probable that the conditions attached to the contribution will be
achieved. The grant is recognized in the income statement in the same period as the related costs, which are
presented net.
Government grants are normally related to either reimbursements of employee costs and classified as a reduction of
payroll and related expenses or related to other operating activities and thus classified as a reduction of other
operating expenses.
Research and development
Expenditure on research activities is recognized as an expense in the period in which it is incurred. Internal
development costs related to the Company's development of products are recognized in the income statement in
the year incurred unless it meets the asset recognition criteria of IAS 38 "Intangible Assets". An internally-generated
asset arising from the development phase of an R&D project is recognized if, and only if, all of the following has been
demonstrated:
•
•
•
•
•
•
Technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
The availability of adequate technical, financial and other resources to complete the development and use or
sell the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development
Uncertainties related to the regulatory approval process and results from ongoing clinical trials, generally indicate
that the criteria are not met until the time when marketing authorization is obtained from relevant regulatory
authorities. The Company has currently no development expenditure that qualifies for recognition as an asset under
IAS 38.
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.
Acquisition cost includes expenditures that are directly attributable to the acquisition of the individual item.
Property, plant and equipment are depreciated on a straight-line basis over the expected useful life of the asset. If
significant individual parts of the assets have different useful lives, they are recognized and depreciated separately.
Depreciation commences when the assets are ready for their intended use. The estimated useful lives of the assets
are as follows:
•
•
•
•
Office equipment: 2 years
Laboratory equipment: 3 years
Permanent building fixtures: 5 years (2 years before 2014)
Furniture and fittings: 3 years
The estimated useful life of fixed assets related to the laboratory equipment, is based on the Company's assessment
of operational risk. Due to scientific and regulatory reasons there is a risk of termination of the project. This has
been taken into account when determining the estimated useful life of the individual assets.
Page 10 of 23
Nordic Nanovector – Second Quarter Report 2014
Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its assets to determine whether
there is any indication that those assets have suffered an impairment loss. Assets that are subject to amortization
are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized if the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of
impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
(cash-generating units). An impairment loss is recognized immediately in profit or loss, reducing the carrying value to
the recoverable amount.
Non-financial assets (or cash generating units) other than goodwill that have suffered impairment charges are
reviewed for possible reversal of the impairment at each reporting date. A reversal is recognized immediately in
profit or loss and increases the carrying amount of the asset to the revised estimate of its recoverable amount, but
so that the increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognized for the asset or cash-generating unit in prior years.
Financial assets
The Company’s financial assets are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition of financial assets are added to the fair value of the asset. The assets are subsequently measured at
amortized cost using the effective interest method, less any impairment losses. Financial assets are derecognized
when the rights to receive cash flows from the investments have expired or have been transferred and the Company
has transferred substantially all risks and rewards of ownership to another party.
The Company's financial assets consist of "trade and other receivables" and "cash and cash equivalents".
Management determines the classification of its financial assets at initial recognition, and the classification of
financial assets depends on the nature and purpose of the financial assets. Currently, all the Company's financial
assets are categorized as loans and receivables. They are included in current assets, except where maturity is more
than 12 months after the balance sheet date. These are classified as non-current assets. The Company has currently
not recognized any material non-current financial assets.
Financial assets are assessed for indicators of impairment at the end of the reporting period and are considered to
be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and other short-term highly liquid
investments with original maturities of three months or less.
Financial liabilities and equity instruments
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance
of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by a company are recognized at the proceeds received, net of any issue
costs.
Page 11 of 23
Nordic Nanovector – Second Quarter Report 2014
The Company classifies instruments as equity if both the following conditions are met:
•
•
The instrument includes no contractual obligation to deliver cash or another financial asset to another entity or
to exchange financial assets or financial liabilities with another entity under conditions that are potentially
unfavourable to the Company;
If the instrument will or may be settled in the Company’s own equity instruments, it is
o a non-derivative that includes no contractual obligation for the Company to deliver a variable number
of its own equity instruments; or
o a derivative that will be settled only by the Company exchanging a fixed amount of cash or another
financial asset for a fixed number of its own equity instruments.
Transaction costs directly attributable to the issue of equity are recognized directly in equity, net of tax.
Financial liabilities
The Company's financial liabilities consist of accounts payable and other current liabilities and are classified as
"other financial liabilities". Accounts payable are obligations to pay for goods or services that have been acquired in
the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due
within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as noncurrent liabilities. Accounts payable and other financial liabilities are recognized initially at fair value and
subsequently measured at amortized cost using the effective interest method.
Share-based payments
The Company operates an equity-settled, share-based compensation plan, under which the entity receives services
from employees and members of the Board as consideration for equity instruments (options) in the Company.
Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date.
The fair value of the employee services received in exchange for the grant of the options is recognized as an
expense, based on the Company’s estimate of equity instruments that will eventually vest. The total amount to be
expensed is determined by reference to the fair value of the options granted excluding the impact of any nonmarket service and performance vesting conditions. The grant date fair value of the options granted is recognized as
an employee expense with a corresponding increase in equity, over the period that the employees become
unconditionally entitled to the options (vesting period).
The fair value of the options granted is measured using the Black-Scholes model. Measurement inputs include share
price on measurement date, exercise price of the instrument, expected volatility, weighted average expected life of
the instruments, expected dividends, and the risk-free interest rate.
Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.
At the end of each reporting period, the company revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognizes the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received net of any directly
attributable transaction costs are recognized as share capital (nominal value) and share premium reserve.
Page 12 of 23
Nordic Nanovector – Second Quarter Report 2014
Current and deferred tax
Income tax expense represents the sum of taxes currently payable and deferred tax.
Deferred taxes are recognized based on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are recognized for taxable temporary differences and deferred tax assets arising from
deductible temporary differences are recognized to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilized. Currently, no deferred tax asset has been
recognized in the financial statements of the Company.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted by the
end of the reporting period.
Earnings per share
Earnings per share are calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is
calculated as profit or loss attributable to ordinary shareholders of the Company, adjusted for the effects of all
dilutive potential options.
Note 3. Critical accounting judgments and key sources of estimation uncertainty
Critical accounting estimates and judgments
Management makes estimates and assumptions that affect the reported amounts of assets and liabilities within the
next financial year. Estimates and judgments are evaluated on an ongoing basis and are based on historical
experience and other factors, including expectations of future events that are considered to be relevant.
Deferred tax
The Company considers that a deferred tax asset related to accumulated tax losses cannot be recognized in the
statement of financial position until the product under development has been approved for marketing by the
relevant authorities. However, this assumption is continually assessed and changes could lead to significant deferred
tax asset being recognized in the future. This assumption requires significant management judgment.
Intangible assets
Research costs are recognized in the income statement as incurred. Internal development costs related to the
Company's development of products are recognized in the income statement in the year in which it is incurred
unless it meets the recognition criteria of IAS 38 Intangible Assets. Uncertainties related to the regulatory approval
process and other factors generally means that the criteria are not met until the time when the marketing
authorization is obtained with the regulatory authorities. This assessment requires significant management
discretion and estimations.
Share-based payments
At the end of each reporting period, the group revises its estimates of the number of options that are expected to
vest. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding
adjustment to equity. Changes to the estimates may significantly influence the expense recognized during a period.
Page 13 of 23
Nordic Nanovector – Second Quarter Report 2014
Note 4. Government grants
Government grants have been recognized in profit or loss as a reduction of the related expense with the following
amounts:
For the three months ended 30 June
2014
2013
Payroll and related expenses
417 452
Other operating expenses
723 428
For the six months ended 30 June
2014
2013
410 896
855 015
1 254 992
987 580
1 378 531
1 212 848
1) The Company has been awarded a grant from The Research Council (program for user-managed innovation
arena (BIA) of NOK 10,500,000 in total for the period 2012 through 2015. For the financial period ended 30 June
2014, the Company has recognized NOK 996,000 (As of 30 June 2013: NOK 1,622,836) classified partly as a
reduction of payroll and related expenses and partly as a reduction of other operating expenses.
2) The Research Council has awarded a grant supporting a PhD for the period 2011 through 2014 of NOK 1,940,000
in total. For the financial period ended 30 June 2014, the Company has recognized NOK 283,546 (AS of 30 June
2013: NOK 295,002) partly as a reduction of payroll and related expenses and partly as a reduction of other
operating expenses.
3) R&D projects have been approved for a SkatteFUNN for the period 2012 through 2015. For the financial period
ended 30 June 2014, the Company has recognized NOK 894,000 compared with NOK 550,002 as of 30 June
2013. The amount was recognized partly as a reduction of payroll and related expenses and partly as a
reduction of other operating expenses.
4) In Q2 2014, the Company received NOK 60,000 in grant from The Research Council for filing a Eurostars
application for a potential new R&D project.
Page 14 of 23
Nordic Nanovector – Second Quarter Report 2014
Note 5. Share-based payments
The Company has a share option scheme for all employees of the Company. Each share option converts into one
ordinary share of the Company on exercise. Options may be exercised at any time from the date of vesting until
expiry. The options are equity-settled.
The following share-based payment arrangements were in existence during the current and prior periods:
Exercise price
Fair value
at grant date
15 Jan 2015
6.25
2.61
2 Feb 2016
6.75
3.14
12 Apr 2012
12 Apr 2016
6.75
3.14
15 000
17 Apr 2012
17 Apr 2015
6.75
2.77
50 000
11 Oct 2012
11 Oct 2016
6.75
3.15
Grant date
150 000
5 Jul 2011
Granted on 2 February 2012
90 000
2 Feb 2012
Granted on 12 April 2012
40 000
Granted on 17 April 2012
Granted on 11 October 2012
Granted on 5 July 2011
1)
Expiry date
Number of options
1)
Extended from 5 Jul 2014 due to lock-up agreements with the Management,
The options vest in three steps at milestones that are significant to the responsibilities of the employee. Generally
1/3 vests immediately upon grant, the remaining 2/3 vested in two portions (1/3 each time) at the achievement of
defined milestones. Options may be exercised twice a year, either in the period from 15 January to 15 February or 1
August to 15 September each year from the date of vesting until expiry.
No share options were granted during 2013 or the six first months of 2014. During the first six months of 2014,
80,000 options were exercised.
Six months ended 30 June 2014
Balance at 1 January
Granted during the period
Twelve months ended 31 December 2013
Number of options
Weighted average
exercise price
Number of options
Weighted average
exercise price
253 333
6.52
325 000
6.52
0
0
0
0
Exercised during the period
-80 000
6.69
-71 667
6.47
Balance
173 333
6.46
253 333
6.53
The fair value at grant date of subscription rights grated are charged against the profit and loss over the vesting
period of each tranche. The fair value of share-based awards is determined using a Black & Scholes option pricing
model. Social security tax related to share-based remuneration is calculated on the balance sheet date based on the
earned intrinsic value of the subscription rights, and the adjustment to the accrued amount is charged or credited to
cost.
Page 15 of 23
Nordic Nanovector – Second Quarter Report 2014
Note 6. Share capital and shareholder information
Share capital as at 30 June 2014 is NOK 2,564,275 (31 December 2013: 2,214,942), being 12,821,375 ordinary shares
at a nominal value of NOK 0.20 each (31 December 2013: 11,074,708 shares at NOK 0.20 each). All shares carry
equal voting rights.
The movement in the number of shares during the period was as follows:
Ordinary shares at 1 January
Issue of ordinary shares
Issue of ordinary shares under share options
Issue of ordinary shares from conversion of loan 1)
Ordinary shares at 30 June
2014
2013
11 074 708
6 386 340
0
4 203 910
80 000
71 667
1 666 667
0
12 821 375
10 661 917
13 May 2014, HealthCap VI L.P. converted the convertible loan in the amount of NOK 25,000,005. The conversion price for the convertible loan
was NOK 15, and the Company issued 1,666,667 new shares to HealthCap VI L.P.
1)
Note 7. Shareholder information
Nordic Nanovector AS has 272 shareholders as at 30 June 2014:
Shareholder
Number of shares
Percentage share of total shares
HealthCap VI L.P.
1 666 667
13,00 %
Inven2 AS
1 427 213
11,13 %
1 122 000
8,75 %
Linux Solutions Norge AS
682 106
5,32 %
Radiumhospitalets Forskningsstiftelse
675 447
5,27 %
Roy Hartvig Larsen
579 949
4,52 %
Must Invest AS
330 000
2,57 %
Varak AS
307 487
2,40 %
Birk Venture AS
179 586
1,40 %
Spar Kapital Investor AS
179 000
1,40 %
OM Holding AS
160 000
1,25 %
Stenshagen Invest AS
150 000
1,17 %
Holberg Norge
135 900
1,06 %
Pedro Consulting AS 2)
130 000
1,01 %
Syntax AS
120 000
0,94 %
Trond Larsen
118 509
0,92 %
Track AS
106 667
0,83 %
BlaBla AS
103 334
0,81 %
RO Invest AS
100 000
0,78 %
Lucellum AS
98 764
0,77 %
Thomas M. Andersen
98 627
0,77 %
1)
Sciencons Ltd. (Roy Hartvig Larsen)
Remaining 252 shareholders
Total
4 350 119
33,93 %
12 821 375
100,00 %
Co-founder and CSO Jostein Dahle is the beneficial owner of and has the right to acquire 250,358 shares from Inven2 AS at an average price of
approx. NOK 3 per share, while inventor Øyvind Bruland is the beneficial owner of and has the right to acquire 125,180 shares from Inven2 at the
same price.
2) Pedro Consulting AS controls Diatec, a company that supplies antibodies to Nordic Nanovector.
1)
Page 16 of 23
Nordic Nanovector – Second Quarter Report 2014
An Extraordinary General Meeting held on 27 September 2013 approved a rights issue of NOK 50 million to
HealthCap VI L.P. The investment is made in two tranches, each of NOK 25 million. The first tranche was issued in
October 2013 as an interest-free loan that is convertible into 1,666,667 ordinary shares in the Company at a price
per share of NOK 15. HealthCap VI L.P. converted the loan into shares 13 May 2014. The second tranche of
1,666,667 shares will be issued and fully paid before or on 15 October 2014. The issue price per share is NOK 15 also
for the second tranche.
Private placement, registered 4 July 2014
10 000 000
Repair issue August/September 2014
2 000 000
HealthCap VI L.P.'s subscription of shares within 15 October 2014
1 666 666
Total shares which are not registered per 30 June 2014
13 666 666
Note 8. Transactions with related parties
Details of transactions between the Company and related parties are disclosed below:
Sales
(included in revenue)
Purchases
(included in other operating expenses)
Six months ended 30 June
Amounts in NOK
2014
Companies controlled by the
Chairman of the Board
234 227
Six months ended 30 June
2013
2014
2013
72 697
322 608
0
Nordic Nanovector bought consulting services of NOK 322,608 from the chairman of the Board and shareholder Roy
H. Larsen through his 100% owned company Sciencons AS.
Note 9. Earnings per share
The calculation of basic and diluted earnings per share attributable to the ordinary shareholders of the parent is
based on the following data:
Amounts in NOK
Loss for the period attributable to owners of the Company
Average number of outstanding shares during the period
Earnings (loss) per share - basic and fully diluted
Six months ended 30 June
2014
2013
-26 566 019
-5 233 297
11 330 721
6 663 370
-2,34
-0,79
Share options issued have a potential dilutive effect on earnings per share. No dilutive effect has been recognized as
potential ordinary shares only shall be treated as dilutive if their conversion to ordinary shares would decrease
earnings per share or increase loss per share from continuing operations. As the Company is currently loss-making
an increase in the average number of shares would have anti-dilutive effects.
Page 17 of 23
Nordic Nanovector – Second Quarter Report 2014
Note 10. Events after the reporting date
At the extraordinary general meeting held in Nordic Nanovector AS 27 June 2014, it was resolved to conduct a
subsequent share issue of up to 2 million new shares at a price of NOK 25, raising gross proceeds of up to NOK 50
million. The subsequent share issue will be directed towards the shareholders of the Company as of 27 June 2014
except for (i) shareholders participating in the Private Placement, and (ii) shareholders in jurisdictions other than
Norway and where an offer to participate in the share issue is not allowed or would require approval or registration
of a prospectus or similar measures.
If not all subscription rights are used by the eligible holders, then the remaining shares may be subscribed to by the
shareholders of the Company as of 27 June 2014. The Company will prepare a prospectus in connection with the
subsequent share issue. The subscription period in the subsequent share issue will not commence until the
prospectus is approved by the Financial Supervisory Authority of Norway (the “NFSA”) and the prospectus has been
published.
The Company expects that the prospectus will be approved by the NFSA in late August 2014. Eligible holders will
receive the prospectus and a subscription form by mail when the prospectus has been approved.
1 July 2014, Vidar Hansson decided to step down from the Board of Directors of Nordic Nanovector AS.
7 July 2014, the shares of Nordic Nanovector AS were registered in the Norwegian OTC system (NOTC), under the
symbol “NANO”.
26 August 2014, the Board has today appointed Mr. Luigi Costa as new CEO of Nordic Nanovector. He will take over
as CEO on the 1st September 2014.
Page 18 of 23
Nordic Nanovector – Second Quarter Report 2014
Note 11. Transition to IFRS
These financial statements has been prepared in accordance with IFRS. The accounting principles described in note 2
have been utilized in the preparation of the Company's financial statements for the period ended 31 March 2014
and for the comparative figures for the period ended 31 March 2013. The Company has prepared financial
statements for the year ended 31 December 2013 which will be available from the Company on request. These
financial statements include information of the IFRS opening statement of financial position as at 1 January 2012,
which is the date of transition to IFRS from Norwegian generally accepted accounting principles for small companies
(NGAAP). The tables below show the implementation effects for the year ended 31 December 2013 and for the
three months ended 30 June 2013.
Reconciliation of Statement of financial position:
NGAAP
31 December 2013
Implementation
Reclassification
effects
IFRS
Assets
Property, plant and equipment
Other long-term receivables
Other short-term receivables
335 949
335 949
0
44 800
6 117 758
-44 800
Cash and cash equivalents
79 569 002
Total assets
86 022 708
44 800
6 072 958
79 569 002
0
0
86 022 708
Shareholders' equity and liabilities
Shareholders' equity
Share capital
Share premium reserve
Other reserves
Retained earnings (accumulated losses)
Total shareholders' equity
2 214 942
2 214 942
91 952 684
91 952 684
0
25 389 837
25 389 837
-39 813 041
-959 131
-40 772 172
24 430 706
78 785 291
54 354 585
0
Liabilities
Accounts payable
Unpaid duties and charges
Short term borrowings
Other current liabilities
4 499 213
576 474
4 499 213
-576 474
24 591 975
0
-24 591 975
0
2 000 462
576 474
161 269
2 738 204
Total liabilities
31 668 123
0
-24 430 706
7 237 417
Total shareholders' equity and liabilities
86 022 708
0
0
86 022 708
Reclassification
Reclassifications are management determined and do not entail differences in accounting principles between
NGAAP and IFRS. The reclassification of NOK 576,474 at 31 March 2013 from unpaid duties and charges to other
current liabilities is based on a decision to present current liabilities that are not classified as trade paybles as one
line item.
Page 19 of 23
Nordic Nanovector – Second Quarter Report 2014
Implementation effects
NOK 44,800 classified as current assets under NGAAP in 2013 related to amounts falling due in more than one year
from the reporting date. This amount has been classified as non-current under IFRS.
Share-based payments were not recognized under previous GAAP (small companies exemption under NGAAP).
Under IFRS, NOK 797,862 is the effect of the difference to IFRS 2 Share-based payments at 31 December 2013. This
represents the cost recognized as at the reporting date, and the total equity effect is nil (corresponding effect on
retained earnings (accumulated losses). The related social security tax recognized as a liability is NOK 161,269 and
impacts retained earnings.
A convertible loan with a balance of NOK 24,591,975, which under NGAAP has been classified as a liability is
classified as equity under IFRS. The arrangement is on a fixed for fixed basis with no alternative to conversion.
Reconciliation of Statement of profit or loss and other comprehensive income:
Three months ended 30 June 2013
Implementation
NGAAP Reclassification
effects
IFRS
Continuing operations
Revenue
56 367
Total operating revenue
56 367
0
656
-656
Cost of goods sold
Payroll and related expenses
Depreciation
Other operating expenses
Total operating expenses
Operating profit (loss)
56 367
905 455
0
56 367
0
72 021
977 476
-233
2 183 650
40 042
40 042
2 183 228
656
3 129 381
0
71 787
3 201 168
-3 073 014
0
-71 787
-3 144 801
Financial income and financial expenses
Finance income
75 229
-5 086
70 143
Finance expense
4 852
4 852
0
Financial items, net
Loss before income tax
Income tax
Loss for the period
Other comprehensive income (loss), net of
income tax
Other comprehensive income, net of income tax
Total comprehensive income (loss) for the period
Page 20 of 23
70 377
0
-234
70 143
-3 002 638
0
-72 021
-3 074 658
0
-72 021
-3 074 658
0
-72 021
-3 074 658
0
-3 002 638
0
0
-3 002 638
0
Nordic Nanovector – Second Quarter Report 2014
Reclassification
Reclassifications are management determined and do not entail differences in accounting principles between
NGAAP and IFRS. The NOK 656 classified as cost of goods sold under NGAAP is reclassified to other operating
expenses in the IFRS financial statements as the amount does not warrant separate presentation due to materiality.
Implementation effects
Share-based payments were recognised as a payroll and related expense at NOK 32,761 in the second quarter of
2013. The corresponding amount was recognised as a reserve in equity. A social security expense of NOK 39,260
related to share options was recognised and presented as payroll and related expense.
Foreign exchange gains or losses were presented as finance income/expense under NGAAP. As these effects solely
relate to operating items, the net foreign exchange gain has been reclassified to other operating expenses under
IFRS.
Impact on cash flows
The Company did not present a statement of cash flows under previous GAAP. The transition to IFRS has had no
effect on items presented as cash and cash equivalents in the statement of financial position.
Page 21 of 23
Nordic Nanovector – Second Quarter Report 2014
Responsibility statement 30 June 2014 (unaudited)
We confirm, that to the best of our knowledge, the condensed consolidated interim financial statements for the
period 1 January to 30 June 2014 have been prepared in accordance with IAS 34 - Interim Financial Reporting and
gives a true and fair view of Nordic Nanovector's assets, liabilities, financial position and result as a whole. We also
confirm to the best of our knowledge that the report of the interim report gives a true and fair view of important
events that have occurred during the first six months of the financial year and their impact on the condensed
consolidated interim financial statements, a description of the principal risks and uncertainties for the remaining six
months of the financial year.
Oslo, 26 August 2014 - The Board of Directors and Chief Executive Officer of Nordic Nanovector AS
Page 22 of 23
Nordic Nanovector – Second Quarter Report 2014
Information
Jan A. Alfheim
Tone Kvåle
Chief Executive Officer
Cell:
(+47) 46 44 00 45
E-mail: [email protected]
Chief Financial Officer
Cell:
(+47) 91 51 95 76
E-mail: [email protected]
Address
Nordic Nanovector AS
Kjelsåsveien 168 B
0884 Oslo
Norway
Phone: (+47) 22 18 33 01
Fax:
(+47) 22 58 00 07
E-mail: [email protected]
www.nordicnanovector.no
Page 23 of 23
APPENDIX D:
SUBSCRIPTION FORM
Appendix D – Application/Subscription Form
NORDIC NANOVECTOR AS
SUBSEQUENT OFFERING
SUBSCRIPTION FORM
Securities no. 001 0597883
General information: The terms and conditions of the Subsequent Offering by Nordic Nanovector AS (the “Company”) are set out
in the prospectus dated [28] August 2014 (the “Prospectus”). Terms defined in the Prospectus shall have the same meaning in this
Subscription Form. The Company’s articles of association and annual accounts and annual reports for the last two years are
available at the Company’s offices at Kjelsåsveien 168B, 0884 Oslo, Norway and www.nordicnanovector.no. All announcements
referred to in this Subscription Form will be made through the NOTC’s information system under the Company’s ticker “NANO” and
the Company’s website.
Subscription procedure: The subscription period is from 1 September 2014 to 16:00 hours (CET) on 12 September 2014 (the
“Subscription Period”). Subscribers who are residents of Norway with a Norwegian personal identification number (Nw.
personnummer) are encouraged to subscribe for Subsequent Offering Shares through the VPS online subscription system (or by
following the link on www.dnb.no/emisjoner and www.abgsc.no which will redirect the subscriber to the VPS online subscription
system). Subscriptions made through the VPS online subscription system must be duly registered before the expiry of the
Subscription Period. Subscriptions can also be made by using this Subscription Form (see Section 14.3.8 “Subscription procedures
and Managers” of the Prospectus). Correctly completed Subscription Forms must be received by the Managers before the end of the
Subscription Period at one of the following addresses (the “Subscription Offices”):
DNB Bank ASA, Registrars Department, Dronning Eufemias gate 30, P.O. Box 1600 Vika, N-0021 Oslo, Norway, Facsimile: +47 22
48 29 80, Email: [email protected] or ABG Sundal Collier, Munkedamsveien 45E, P.O. Box 144 Vikam N-0115 OSLO, Norway,
Facsimile: +47 22 01 60 62, Email: [email protected]
The subscriber is responsible for the correctness of the information filled in on the Subscription Form. Subscription Forms that are
incomplete or incorrectly completed, or that are received after the end of the Subscription Period, and any subscription that may be
unlawful, may be disregarded, at the discretion of the Managers on behalf of the Company. Subscriptions are irrevocable and
binding upon receipt and cannot be withdrawn, cancelled or modified by the subscriber after having been received by an
Subscription Office, or in the case of subscriptions through the VPS online subscription system, upon registration of the
subscription. Neither the Company nor any of the Managers may be held responsible for postal delays, unavailable fax lines,
internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all
in the VPS online subscription system or by the Subscription Offices.
Price: The Subscription Price is NOK 25 per Subsequent Offering Share.
Eligible Shareholders: Shareholders of the Company as of 27 June 2014, as registered in the VPS as shareholders on the 2 July
2014 (the Record Date) other than shareholders in jurisdictions other than Norway and where an offer to participate in the share
issue is not allowed or would require approval or registration of a prospectus or similar measures, may subscribe for and be
allocated Subsequent Offering Shares. Others may not subscribe for or be allotted Subsequent Offering Shares.
Subscription Rights: Eligible Shareholders who did not participate in the Private Placement have been granted non-transferable
Subscription Rights that, subject to applicable law, provide the right to subscribe for and to be allocated Subsequent Offering
Shares. Each of these Eligible Shareholder will be granted 0.4 Subscription Right for every Share registered as held by such Eligible
Shareholder on the Record Date, rounded down to the nearest whole number. Each Subscription Right gives the right to subscribe
for and be allocated one Subsequent Offering Share. Subscription Rights not used to subscribe for Subsequent Offering Shares
before the end of the Subscription Period will lapse without compensation to the holder, and, consequently, will be of no value from
that point in time.
Allocation of Subsequent Offering Shares: Allocation of the Subsequent Offering Shares will take place on or about 15
September 2014 to subscribers having validly exercised their Subscription Rights during the Subscription Period. Each Subscription
Right used to subscribe to Subsequent Offering Shares before the expiry of the Subscription Period will give the right to be
allocated one Subsequent Offering Share. If not all Subscription Rights are being used, then the remaining Subsequent Offering
Shares will be allocated to Eligible Shareholders who over-subscribe or subscribe without Subscription Rights. The allocation of
these remaining Subsequent Offering Shares shall take place on the basis of shareholding as of 27 June 2014 (as registered as of
the Record Date) of those Eligible Shareholders who subscribe to the remaining Subsequent Offering Shares, but so that Shares
allocated to the relevant Eligible Shareholder in the Private Placement or pursuant to Subscription Rights shall be deemed to be
allocated Shares. No fractional Subsequent Offering Shares will be allocated. The Company will round off subscription for Subsequent Offering Shares not covered by Subscription Rights. Notifications of allocated
Subsequent Offering Shares and the corresponding subscription amount to be paid by each subscriber are expected to be distributed in a letter from the VPS on or about 15 September 2014.
Payment: In completing this Subscription Form, or registering a subscription through the VPS online subscription system, subscribers authorise DNB Markets to debit the subscriber’s Norwegian bank account for the
total subscription amount payable for the Subsequent Offering Shares allocated to the subscriber. Accounts will be debited on or about 17 September 2014 (the “Payment Date”). The specified bank account is expected
to be debited on or after the Payment Date. DNB Markets is only authorised to debit such account once, but reserves the right to make up to three debit attempts, and the authorisation will be valid for up to seven
working days after the Payment Date. Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Subsequent Offering Shares allocated to them is made on or before
the Payment Date. Details and instructions can be obtained by contacting DNB: (DNB Bank ASA, Registrar Department, Dronning Eufemias gate 30 P.O. Box 1600 Sentrum, Oslo, Norway, telephone number +47 23 26
80 20) for further details and instructions. Should any subscriber have insufficient funds in his or her account, should payment be delayed for any reason, if it is not possible to debit the account or if payments for any
other reasons are not made when due, overdue interest will accrue and other terms will apply as set out under the heading “Overdue and missing payments” below.
PLEASE SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION
DETAILS OF THE SUBSCRIPTION
Subscriber’s VPS account:
Number of Subscription Rights:
SUBSCRIPTION RIGHT’S SECURITIES NUMBER: ISIN 001 0717267
Number of Subsequent Offering Shares
subscribed:
(For broker: consecutive no.):
Subscription Price per Subsequent
Subscription amount to be paid:
Offering Share:
NOK
NOK 25
IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT)
Norwegian bank account to be debited for the payment for Subsequent Offering Shares
allocated (number of Subsequent Offering Shares allocated x NOK 25).
(Norwegian bank account no.)
I/we hereby irrevocably (i) subscribe for the number of Subsequent Offering Shares specified above subject to the terms and conditions set out in this Subscription Form and in the
Prospectus, (ii) authorize and instruct each of the Managers (or someone appointed by any of them) acting jointly or severall y to take all actions required to transfer such Subsequent
Offering Shares allocated to me/us to the VPS Registrar and ensure delivery of the beneficial interests to such Subsequent Offering Shares to me/us in the VPS, on my/our behalf, (iii)
authorize DNB Markets to debit my/our bank account as set out in this Subscription Form for the amount payable for the Subsequent Offering Shares allotted to me/us, and (iv)
confirm and warrant to have read the Prospectus and that I/we are eligible to subscribe for Subsequent Offering Shares under the terms set forth therein.
Place and date
Binding signature
must be dated in the Subscription Period.
The subscriber must have legal capacity. When signed on behalf of a company or
pursuant to an authorization, documentation in the form of a company certificate
or power of attorney must be enclosed.
INFORMATION ON THE SUBSCRIBER – ALL FIELDS MUST BE COMPLETED
First name
Surname/company
Street address
Post code/district/
country
Personal ID number/
organization number
Nationality
E-mail address
Daytime telephone
number
ADDITIONAL GUIDELINES FOR THE SUBSCRIBER
Regulatory issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes requirements in relation to business
investments. In this respect, the Managers must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional clients. All subscribers in
the Subsequent Offering who are not existing clients of one of the Managers will be categorized as non-professional clients. Subscribers can, by written request to a Manager, ask to be
categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber
may contact DNB Markets (KSC - Customer Administration, P.O. Box 7100, NO5020 Bergen, Norway or www.dnb.no/en/mifid) or ABG Sundal Collier. The subscriber represents that he/she/it is
capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an
investment in the Subsequent Offering Shares.
Selling Restrictions: The attention of persons who wish to subscribe for Subsequent Offering Shares is drawn to Section 15 “Selling and transfer restrictions” of the Prospectus. The Company
is not taking any action to permit a public offering of the Subscription Rights or the Subsequent Offering Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any
jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, the
Prospectus is for information only and should not be copied or redistributed. Persons outside Norway should consult their professional advisors as to whether they require any governmental or
other consent or need to observe any other formalities to enable them to subscribe for Subsequent Offering Shares. It is the responsibility of any person wishing to subscribe for Subsequent
Offering Shares under the Subsequent Offering to satisfy himself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental
or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The Subscription Rights
and Subsequent Offering Shares have not been registered, and will not be registered, under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be
offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, within the United States, except pursuant to an applicable exemption from the registration requirements
of the U.S. Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. The Subscription Rights and Subsequent Offering Shares have not
been and will not be registered under the applicable securities laws of Australia, Canada or Japan and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or
indirectly, in or into Australia, Canada or Japan. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Subsequent Offering Shares in any jurisdiction in
which such offer or solicitation is unlawful. A notification of exercise of Subscription Rights and subscription of Subsequent Offering Shares in contravention of the above restrictions may be
deemed to be invalid. By subscribing for the Subsequent Offering Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on
whose behalf they are subscribing for the Subsequent Offering Shares, have complied with the above selling restrictions. Persons effecting subscriptions on behalf of any person located in the
United States will be responsible for confirming that such person, or anyone acting on its behalf, has subscribed for such Shares in accordance with the terms and conditions set out in the
Prospectus, including, but not limited to, Section 15 “Selling and transfer restrictions”.
The Company has not authorised any offer to the public of its securities in any Member State of the EEA other than Norway. With respect to each Member State of the EEA other than Norway
and which has implemented the EU Prospectus Directive (each, a “Relevant Member State”), no action has been undertaken or will be undertaken to make an offer to the public of the Offer
Shares requiring a publication of a prospectus in any Relevant Member State. Any offers outside Norway will only be made in circumstances where there is no obligation to produce a
prospectus.
Execution Only: The Managers will treat the Subscription Form as an execution-only instruction. The Managers are not required to determine whether an investment in the Subsequent
Offering Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian
Securities Trading Act.
Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the
Managers there is a duty of secrecy between the different units of the Managers as well as between the Managers and the other entities in the Managers’ respective groups. This may entail that
other employees of the Managers or the Managers’ respective groups may have information that may be relevant to the subscriber and to the assessment of the Subsequent Offering Shares,
but which the Managers will not have access to in their capacity as Managers for the Subsequent Offering.
Information barriers: The Managers are securities firms that offer a broad range of investment services. In order to ensure that assignments undertaken in the Managers’ corporate finance
departments are kept confidential, the Managers’ other activities, including analysis and stock broking, are separated from the respective Managers’ corporate finance departments by
information walls. Consequently the subscriber acknowledges that the Managers’ analysis and stock broking activity may conflict with the subscriber’s interests with regard to transactions in the
Shares, including the Subsequent Offering Shares.
VPS account and mandatory anti-money laundering procedures: The Subsequent Offering is subject to the Norwegian Money Laundering Act of 6 March 2009 No. 11 and the Norwegian
Money Laundering Regulations of 13 March 2009 No. 302 (collectively, the “Anti-Money Laundering Legislation”). Subscribers who are not registered as existing customers of one of the
Managers must verify their identity to one of the Managers in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have
designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Managers. Subscribers
who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated Subsequent Offering Shares. Participation in the Subsequent
Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the subscription form. VPS accounts can be established with authorized VPS
registrars, who can be Norwegian banks, authorized securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account
requires verification of identity to the VPS registrar in accordance with the Anti-Money Laundering Legislation. However, non-Norwegian investors may use nominee VPS accounts registered in
the name of a nominee. The nominee must be authorized by the Financial Supervisory Authority of Norway.
Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the relationship between
the payer and the payer’s bank the following standard terms and conditions apply:
a)
b)
c)
d)
e)
f)
g)
The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in particular Section C of the
account agreement, General terms and conditions for deposit and payment instructions.
Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or information given in another
appropriate manner. The bank will charge the indicated account for costs incurred.
The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will charge the
payer’s bank account.
In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer’s
bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and
the beneficiary.
The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank will normally perform a
verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately
be covered by the payer.
The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct debiting, the account will be
charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorization has expired as indicated
above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.
If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement and the
Norwegian Financial Contracts Act.
Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No.
100; 9.5% per annum as of the date of the Prospectus. If the subscriber fails to comply with the terms of payment or should payments not be made when due, the subscriber will remain fully
liable for payment of the Subsequent Offering Shares allocated to it and the Subsequent Offering Shares allocated to such subscriber will not be delivered to the subscriber. In such case the
Company and the Managers reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and the allocation of the allocated Subsequent
Offering Shares, or, if payment has not been received by the third day after the Payment Date, without further notice sell, assume ownership to or otherwise dispose of the allocated Offer
Shares in accordance with applicable law. If Subsequent Offering Shares are sold on behalf of the subscriber, such sale will be for the subscriber’s account and risk and the subscriber will be
liable for any loss, costs, charges and expenses suffered or incurred by the Company and/or the Managers as a result of, or in connection with, such sales. The Company and/or the Managers
may enforce payment for any amounts outstanding in accordance with applicable law. The Managers may (but have no obligation to) fund the Subscription Price for Subsequent Offering Shares
for which payment has not been made by the subscriber when due, and to take over and/or sell for the subscriber’s account and risk, without further notice to the subscriber, such Subsequent
Offering Shares. The non-paying subscribers will remain fully liable for payment of the Subsequent Offering Shares allocated to them, irrespective of any payment by the Managers.
Registered office and advisors
Nordic Nanovector AS
Kjelsåsveien 168 B
N-0884 Oslo
Norway
Managers
ABG Sundal Collier Norge ASA
DNB Markets
Munkedamsveien 45 Vika Atrium
Dronning Eufemias gate 30
N-0250 Oslo
N-0021 Oslo
Norway
Norway
Legal Adviser to the Company
Legal Adviser to the Managers
Advokatfirmaet Thommessen AS
Advokatfirmaet BA-HR DA
Haakon VII’s gate 10
Tjuvhomen allé 16
N-0161 Oslo
N-0252 Oslo
Norway
Norway
140323 - SSD/ - www.ssd.no