Notice to attend the extraordinary general meeting in Echandia Group AB 

The shareholders in Echandia Group AB, reg. no. 556939-0320 (the ”Company”), are hereby given notice to attend the extraordinary general meeting at 09:00 CET on Monday, 16 December 2024 at the Company’s offices at Karlbergs strand 4 L, Solna.

Notice

Shareholders wishing to participate at the meeting must be entered in the shareholders’ register, kept by Euroclear Sweden AB (the Swedish Central Securities Depository & Clearing Organisation), on the record day which is 6 December 2024, and are asked to give notice of participation and any assistant no later than 10 December 2024. Notification can be made by e-mail to finance@echandia.se.

Notification should include full name, personal identification number or corporate registration number, address and daytime telephone number and, where appropriate, information about representative, proxy and assistants. The number of assistants may not be more than two. In order to facilitate entry to the meeting, notification should, where appropriate, be accompanied by powers of attorney, registration certificates and other documents of authority.

For information on how your personal data is processed in connection with the meeting, please see the integrity policy on Euroclear Sweden AB’s website, https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammor-engelska.pdf.

Nominee registered shares

Shareholders who have their shares registered in the name of a nominee must request temporary entry in the transcription of the share register kept by Euroclear Sweden AB (so-called voting rights registration) in order to be entitled to participate at the meeting. The shareholder must inform the nominee well in advance of 6 December 2024 at which time the register entry must have been made. Voting rights registration that has been requested by the shareholder at such time that the registration has been completed by the nominee no later than 10 December 2024, will be taken into account in the preparation of the share register.

Proxy

A shareholder represented by proxy shall issue a power of attorney which shall be dated and signed by the shareholder. The power of attorney may not be older than one year unless a longer period of validity is explicly stated, but no longer than five years. If issued by a legal entity, the power of attorney shall be accompanied by a registration certificate or, if not applicable, equivalent documents of authority. Power of attorney forms for those shareholders wishing to participate by proxy are available on the Company’s website www.echandia.se. The original version of the power of attorney shall also be presented at the meeting.

Proposed agenda

1. Opening of the meeting and election of chairman at the meeting
2. Preparation and approval of the voting list
3. Approval of the agenda
4. Election of one or two persons who shall approve the minutes of the meeting
5. Determination of whether the meeting has been duly convened
6. Resolution regarding adoption of new articles of association
7. Resolution regarding approval of the board of directors’ resolution on a new issue of preference shares of series A1 against payment through set-off (I)
8. Resolution regarding approval of the board of directors’ resolution on a new issue of preference shares of series A1 against payment through set-off (II)
9. Closing of the meeting

Proposed resolutions

Item 1. Election of chairman at the meeting

Björn Gunnerholm is proposed as chairman of the meeting.

Item 6. Resolution regarding adoption of new articles of association

In order to introduce two new classes of shares and to allow for future investments in the Company, the board of directors proposes that the general meeting resolves to adopt new articles of association. In addition, certain changes are proposed regarding, for example, the limits for the number of board members and the place for holding general meetings. The proposed changes are set out below.

Limits for the Company’s share capital

The board of directors proposes that the general meeting resolves to change the articles of association
(§ 4) regarding the limits for the share capital.

Current wording § 4

“The share capital shall amount to no less than SEK 850,000 and no more than SEK 3,400,000.”

Proposed wording § 4

“The share capital shall amount to no less than SEK 1,750,000 and no more than SEK 7,000,000.”

Limits for the number of shares and classes of shares

The board of directors furthermore proposes that the general meeting resolves to change the articles of association (§ 5) regarding the limits for the number of shares and the introduction of two new classes of shares, preference shares of series A1 and preference shares of series A2.

Current wording § 5

“Number of shares, etc.

The number of shares in the company shall be no less than 1,700,000 and no more than 6,800,000. Only one class of shares shall be issued.”

Proposed wording § 5

“Number of shares and classes of shares

The number of shares in the company shall be no less than 3,500,000 and no more than 14,000,000.

Shares may be issued in three classes: (i) ordinary shares, (ii) preference shares of series A1 and (iii) preference shares of series A2. All classes of shares shall entitle the holder to one vote per share. Shares of each class may be issued in a quantity corresponding to the entire share capital of the company.

Should the company resolve to issue new shares by way of a cash issue or a set-off issue, one existing share shall entitle the holder to preferential rights to one new share of the same class pro rata to the number of shares previously owned by the holder (primary preferential rights). Shares that are not subscribed for pursuant to primary preferential rights shall be offered to all shareholders for subscription (secondary preferential rights). Unless shares offered in such manner are sufficient for the subscription which takes place pursuant to secondary preferential rights, the shares shall be allotted among the subscribers pro rata to the total number of shares previously owned. Where this is not possible with respect to a particular share / shares, shares shall be allotted through the drawing of lots.

The provisions above shall not entail any restrictions on the possibility for the company to adopt a resolution regarding a cash issue or set-off issue with deviation from the shareholders’ preferential rights.

The provisions above regarding the shareholders’ preferential rights shall apply mutatis mutandis on issues of warrants or issues of convertible debentures.

Upon an increase of the share capital by way of a bonus issue, new shares of each class shall be issued pro rata to the number of shares of the same class that are already in existence. In relation thereto, old shares of a particular class shall entitle the holder to preferential rights to new shares of the same class. The aforementioned shall not entail any restrictions on the possibility for the company to issue shares of a new class through a bonus issue, following any necessary amendments to the articles of association.”

Liquidation preference and conversion clause

The board of directors furthermore proposes that the general meeting resolves to introduce a new § 6 in the articles of association regarding the relationship between the different classes of shares in the event of Liquidity Events (as defined below) and a new § 7 regarding conversion clause. The proposed changes means that the numbering in the articles of association is changed so that current §§ 6-8 become §§ 8-12.

Proposed wording § 6

“Liquidation preference

6.1 Definitions

For the purposes of this paragraph 6 and paragraph 7, the following defined terms have the following meanings:

”IPO” means a listing of the shares and/or other financial instruments issued by the company on a regulated market or a listing on another internationally recognized marketplace for public trading of the shares and/or other financial instruments issued by the company;

”Change of Control” means one or more consecutive sales, transfers or other disposals of shares whereby at least 50 per cent of the voting rights in the company are transferred to a person who, at the time of the transfer, is not already a shareholder in the company;

”Liquidity Event” means (i) a liquidation, dissolution or other winding up of the company, (ii) a sale of substantially all of the assets of the company, or (iii) a Change of Control;

”Dividend” means any dividends or payment of cash or non-cash assets to shareholders in connection with a Liquidity Event.

6.2 Waterfall

All Dividends shall be made in accordance with the following order of priority:

1. firstly, pro rata to holders of preference shares of series A2 until each such holder has received the greater of (i) an amount per share equal to one and a half times (1.5x) the sum of all amounts paid, or provided to, the company for subscription of preference shares of series A2, divided by the total number of outstanding preference shares of series A2, and (ii) an amount equal to such holder’s pro rata share of the Dividend in connection with a Liquidity Event (on a fully diluted basis);
2. secondly (if applicable), pro rata to holders of preference shares of series A1 until each such holder has received the greater of (i) an amount per share equal to one times (1x) the sum of the amount paid, or provided to, the company for subscription of preference shares of series A1, divided by the total number of outstanding preference shares of series A1, and (ii) an amount equal to such holder’s pro rata share of the Dividend in connection with a Liquidity Event (on a fully diluted basis); and
3. thirdly (if applicable), pro rata between holders of ordinary shares (on a fully diluted basis).”

Proposed wording § 7

“Conversion clause

Preference shares of series A1 and series A2 may be converted into ordinary shares at the request of the holders of such shares, which must be made in writing to the board of directors, stating the number of preference shares requested to be converted.

Additionally, all preference shares of series A1 and series A2 shall automatically be converted into ordinary shares upon completion of an IPO, whereby the board of directors shall be authorised to decide on the timing of such conversion, which shall, however, be no later than the first day of trading of the share.

The conversion shall be immediately reported for registration. The conversion is effected when registration has been completed and the conversion has been noted in the share register.”

Limits for the number of board members

The board of directors furthermore proposes that the general meeting resolves to change the limit for the number of board members in the articles of association (currently § 6, but after adoption of the new articles of association § 8).

Current wording § 8 (currently § 6, but after adoption of the new articles of association § 8)

“The board of directors shall consist of no less than four and no more than eight members with no more than two deputies.”

Proposed wording § 8

“The board of directors shall consist of no less than four and no more than ten members with no more than two deputies.”

Place for holding general meetings

The board of directors furthermore proposes that the general meeting resolves to introduce a new § 11 regarding alternative place for holding general meetings in the articles of association. The proposed change means that the numbering in the articles of association is changed so that current §§ 9-11 become §§ 12-14.

Proposed wording § 11

“Place for holding general meetings

General meetings may be held in Solna municipality or in Stockholm municipality.”

Transition to bilingual articles of association

Lastly, the board of directors proposes that the general meeting resolves to amend the articles of association to be bilingual and thus be written both in Swedish and in English.

Majority Requirement, conditions for resolutions, etc.

The resolution requires the support of shareholders representing at least two-thirds of both the votes cast and the shares represented at the meeting.

The resolution is conditioned upon the general meeting passing resolutions in accordance with items 7–8 below.

It was noted that all existing shares in the Company will constitute ordinary shares.

It is furthermore proposed that each of Johan Ranstam and the CEO of the Company shall be authorized to make such minor amendments to the resolution as may be required in connection with the registration or execution of the resolution with the Swedish Companies Registration Office.

Item 7. Resolution regarding approval of the board of directors’ resolution on a new issue of preference shares of series A1 against payment through set-off (I)

The board of directors proposes that the general meeting resolves to approve the board of directors’ resolution on a new issue of not more than 3,086,616 preference shares of series A1, entailing an increase in the share capital of not more than SEK 1,543,308. The resolution shall otherwise be governed by the following terms and conditions.

1. The right to subscribe for the new shares shall, with deviation from the shareholders’ preferential rights, vest a previously notified group of investors in accordance with Appendix A.
2. A subscription price of SEK 30 shall be paid for each share subscribed for. The subscription price is based on the convertible agreements and the bridge loan agreements entered into with the subscribers. Payment shall be made by set-off of a claim.
3. The share premium shall be transferred to the unrestricted premium reserve.
4. Subscription for the newly issued shares shall take place no later than 18 December 2024. Payment shall be made by set-off of a claim no later than two (2) banking days after allotment. It was noted that allotment, under certain circumstances, can only take place after the necessary authorizations and approvals (including a decision to not take any action upon a submitted notification) of the new share issue have been obtained from the Swedish Inspectorate of Strategic Products (Sw. Inspektionen för strategiska produkter) (the “ISP”) or that such authorizations or approvals have otherwise been obtained from the ISP by, inter alia, the ISP having decided or declared that a notification of the new share issue is not required.
5. The board of directors shall be entitled to extend the subscription period and the time for payment.
6. The new shares entitle the holder to a dividend as from the date on which the shares are entered in the share register.
7. The resolution is conditional on amendment of the articles of association.
8. The newly issued shares are subject to a conversion clause.

The board of directors furthermore resolved on the possibility to issue paid subscribed shares (BTA) in connection with subscription and payment of the new shares.

Each of Johan Ranstam and the CEO of the Company is hereby authorized to make such minor formal adjustments to the issue resolution, which may be required for registration of the new shares with the Swedish Companies Registration Office or Euroclear Sweden AB.

The reason for deviation from the shareholders’ pre-emptive rights is that the Company shall repay the outstanding bridge loans and convertible loans by issuing shares to the lenders, in accordance with the terms of the respective agreements.

Majority Requirement

The resolution is valid only subject to subsequent approval of the general meeting by support of shareholders representing at least two-thirds of both the votes cast and the shares represented at the meeting.

Item 8. Resolution regarding approval of the board of directors’ resolution on a new issue of preference shares of series A1 against payment through set-off (II)

The board of directors proposes that the general meeting resolves to approve the board of directors’ resolution on a new issue of not more than 63,539 preference shares of series A1, entailing an increase in the share capital of not more than SEK 31,769.50. The resolution shall otherwise be governed by the following terms and conditions.

1. The right to subscribe for the new shares shall, with deviation from the shareholders’ preferential rights, vest a previously notified group of investors in accordance with Appendix B.
2. A subscription price of SEK 30 shall be paid for each share subscribed for. The subscription price is based on the convertible agreements and the bridge loan agreements entered into with the subscribers. Payment shall be made by set-off of a claim.
3. The share premium shall be transferred to the unrestricted premium reserve.
4. Subscription for the newly issued shares shall take place no later than 18 December 2024. Payment shall be made by set-off of a claim no later than two (2) banking days after allotment. It was noted that allotment, under certain circumstances, can only take place after the necessary authorizations and approvals (including a decision to not take any action upon a submitted notification) of the new share issue have been obtained from the Swedish Inspectorate of Strategic Products (Sw. Inspektionen för strategiska produkter) (the “ISP”) or that such authorizations or approvals have otherwise been obtained from the ISP by, inter alia, the ISP having decided or declared that a notification of the new share issue is not required.
5. The board of directors shall be entitled to extend the subscription period and the time for payment.
6. The new shares entitle the holder to a dividend as from the date on which the shares are entered in the share register.
7. The resolution is conditional on amendment of the articles of association.
8. The newly issued shares are subject to a conversion clause.

The board of directors furthermore resolved on the possibility to issue paid subscribed shares (BTA) in connection with subscription and payment of the new shares.

Each of Johan Ranstam and the CEO of the Company is hereby authorized to make such minor formal adjustments to the issue resolution, which may be required for registration of the new shares with the Swedish Companies Registration Office or Euroclear Sweden AB.

The reason for deviation from the shareholders’ pre-emptive rights is that the Company shall repay the outstanding bridge loans and convertible loans by issuing shares to the lenders, in accordance with the terms of the respective agreements.

Majority Requirement

The resolution is covered by chapter 16 of the Swedish Companies Act (2005:551) and a valid resolution hence requires the subsequent approval of the general meeting by support of shareholders representing at least nine-tenths of both the votes cast and the shares represented at the meeting.

Number of shares and votes in the Company

The total number of shares and votes in the Company at the time of issuance of this notice is 1,724,024. The Company does not hold any of its own shares.

Shareholders’ right to request information

Pursuant to chapter 7, section 32 of the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)) the board of directors and the CEO are under a duty to, if any shareholder so requests and the board of directors deems that it can be made without material damage to the Company, provide information regarding circumstances which may affect the assessment of a matter on the agenda.

Documentation

Documents to be dealt with at the general meeting will be kept available at the Company’s office and will be sent free of charge to shareholders who so request and state their postal address. The documents will also be made available on the Company’s website www.echandia.se. All the above-mentioned documents will also be presented at the meeting.

_______

Echandia Group AB
Solna, November 2024
The board of directors

Echandia Group AB – Power of Attorney

Bolagsordning – Articles of Association
Echandia Group Kvittningsemission 1 (In Swedish)
Echandia Group Kvittningsemission 2 (In Swedish)
Revisorernas yttrande (In Swedish)
Styrelsens redogörelse 1 13.6
Styrelsens redogörelse 1 13.7 I
Styrelsens redogörelse 1 13.7 II

Appendix A

Appendix B