Observe Medical ASA: Private Placement successfully placed

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Oslo, 11 June 2025

Reference is made to the previous stock exchange announcement made by Observe Medical ASA (the "Company" or "Observe Medical", Euronext Expand ticker "OBSRV") regarding a contemplated private placement (the “Private Placement”) of new shares in the Company (the “Offer Shares”). The Company is pleased to announce that it has successfully placed and conditionally allocated 72,890,000 Offer Shares in the Private Placement at a subscription price of NOK 0.50 per Offer Share (the “Offer Price”) for gross proceeds totalling NOK 36,445,000, as further described below.

SpareBank 1 Markets AS acted as manager in the Private Placement.

The net proceeds to the Company from the Private Placement will be used to buy the remaining rights for the Unometer product family as well as for operating liquidity currently expected to be needed to take the Company to cash positive.

Certain primary insiders and close associates of primary insiders have been conditionally allocated Offer Shares as follows:

• R Investment Company AS (represented on the Company's board of directors (the "Board") by Terje Bakken, chair of the Board): 8,000,000 Offer Shares
• Seed Capital AS (represented on the Board by Eskild Endrerud): 5,000,000 Offer Shares
• Glimt Invest AS (a company owned and controlled by chair of the Board Terje Bakken): 2,350,000 Offer Shares
• Jørgen Mann, Company CEO: 800,000 Offer Shares
• Johan Magnus Fagerli, Company CFO: 340,000 Offer Shares

Navamedic ASA (“Navamedic”), the Company’s largest shareholder, has been conditionally allocated 10 million Offer Shares through conversion of part of its outstanding loans to the Company (the “Navamedic Conversion”). The Navamedic Conversion is in addition to the agreement in principle between the Company and Navamedic whereby Navamedic has agreed on a debt reduction of 50% of its outstanding loans to the Company, subject to certain conditions, as announced in the stock exchange announcement published by the Company on 10 April 2025. For further information about the debt reduction, including the conditions for such debt reduction, please refer to said stock exchange announcement.

Furthermore, Jiangsu Hongxin Medical Technology Co. Ltd. ("Jiangsu"), who is the Company's largest manufacturing partner, has been conditionally allocated 6 million Offer Shares through conversion or contribution of parts of its accounts receivables towards the Company and/or its subsidiaries (the "Jiangsu Conversion" and together with the Navamedic Conversion the "Debt Conversions").  In addition, Jiangsu has agreed that that the Observe Medical group shall be entitled to place additional orders with Jiangsu without an obligation to pay the customary prepayment of USD 300,000 upon placing the order. Such payment shall only be payable according to an agreed payment schedule. Notification of conditional allocation is expected on or about 12 June 2025, before trading commences on the Oslo Stock Exchange.

Payment (or settlement by way of set-off in terms of the Debt Conversions) for the allocated Offer Shares is expected to take place following an extraordinary general meeting in the Company, expected to be held on or about 3 July 2025 (the “EGM”). Registration of the share capital increase resolutions relating to the Private Placement in the Norwegian Register of Business Enterprises (the “NRBE”) is, subject to timely payment of the entire cash subscription amount and timely implementation of the Debt Conversions, expected on or about 7 July 2025, and delivery of the Offer Shares is expected on or about 8 July 2025.

The Offer Shares will be registered with the Norwegian Central Securities Depository Euronext Securities Oslo (the “VPS”) on a separate ISIN from the existing shares of the Company, pending approval and publication by the Company of a prospectus (the “Prospectus”) and will thus not be tradable on Euronext Expand Oslo until the Prospectus has been approved by the Financial Supervisory Authority of Norway (the “NFSA”) and published by the Company, upon which the Offer Shares will be transferred to the Company’s ordinary ISIN in the VPS and be admitted to trading on Euronext Expand Oslo. The Prospectus is expected to be approved by the NFSA and published by the Company at the end of Q3 2025.

Completion of the Private Placement, by delivery of Offer Shares to investors, is subject to the following conditions (together, the “Conditions”) being satisfied: (i) all necessary corporate resolutions being validly made by the Company, including (without limitation) the Board resolving to approve the Jiangsu Conversion (based on the board authorisation), the annual general meeting of the Company, scheduled to be held on 27 June 2025 (the “AGM”), resolving the Proposed Share Capital Reduction (as defined below) and the EGM resolving the issuance of the Offer Shares and the Navamedic Conversion (together, the “General Meeting Resolutions”), (ii) the Debt Conversions being completed no later than simultaneously with completion of the share issue for cash consideration in the Private Placement, (iii) registration of the General Meeting Resolutions in the NRBE, and (iv) the issuance of the Offer Shares in the VPS. Investors being allocated Offer Shares in the Private Placement have undertaken to vote in favour of the General Meeting Resolutions.

The Board has previously proposed that the Company's share capital is reduced by way of reduction of the nominal value of each share to NOK 0.42 (the “Proposed Share Capital Reduction”), and reference is made to the notice of the AGM dated 6 May 2025 for further information regarding the Proposed Share Capital Reduction.

The Board has carefully considered the Private Placement in light of the equal treatment obligations under the Norwegian Public Limited Liability Companies Act, the Norwegian Securities Trading Act and Oslo Børs' guidelines on the rule of equal treatment, and is of the opinion that the Private Placement is in compliance with these requirements. It is in this respect relevant that the Company has an immediate need of additional equity to finance its operations, including operating liquidity currently expected to be needed to take the Company cash positive. A rights issue would take substantially longer to complete, which would not secure the Company required liquidity in time and could significantly impair the Company's situation. The Board has, in addition to considering the possibility of conducting a rights issue, looked into other financing alternatives (bank financing and direct lending) and concluded that such alternatives are not available.

The Board will also propose to the EGM that it is granted an authorisation to carry out a subsequent offering (the "Subsequent Offering") of up to 24,000,000 new shares in the Company, directed at shareholders in the Company as of 11 June 2025 (as registered in Euronext Securities Oslo (VPS) two trading days thereafter) who (i) were not included in the wall-crossing phase of the Private Placement, (ii) were not allocated Offer Shares in the Private Placement, and (ii) are not resident in a jurisdiction where such offering would be unlawful or would (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action (the "Eligible Shareholders"). The Eligible Shareholders will be granted non-transferable subscription rights to subscribe for and be allocated new shares in the Subsequent Offering. The subscription price in the Subsequent Offering will be equal to the Offer Price. Oversubscription will be permitted, but subscription without subscription rights will not be permitted.

The net proceeds from the Subsequent Offering will be used for operating liquidity and general corporate purposes. The Subsequent Offering will be conditional upon the approval of the EGM, as well as the completion of the Private Placement. The application period for the Subsequent Offering is expected to commence shortly after the publication of the Prospectus. The Company will issue a separate stock exchange announcement with further details on the Subsequent Offering.

Against this background, the Board has considered the Private Placement to be in the common interest of the Company and its shareholders. Due to the structure of the Private Placement, the shareholders' preferential rights will be waived.

Based on the above, the Board has resolved to propose to the EGM that:

i. the Company's share capital is increased by NOK 23,893,800 by issuance of 56,890,000 Offer Shares, each with a nominal value of NOK 0.42, at the Offer Price, in connection with the Private Placement. 

ii. the Company's share capital is increased by NOK 4,200,000 by issuance of 10,000,000 new shares, each with a nominal value of NOK 0.42, at the Offer Price, in connection with the Navamedic Conversion.

iii. the board of directors is granted an authorisation to increase the Company's share capital by up to NOK 10,080,000, by the issuance of up to 24,000,000 new shares, each with a nominal value of NOK 0.42, at the Offer Price, in connection with the Subsequent Offering.

iv. the Board is granted an authorisation to increase the share capital by up to NOK 7,740,466.44 (approximately 20% of the Company's share capital following completion of the Private Placements and the Debt Conversions) in order for the Board to have flexibility to issue new shares in connection with acquisitions of other companies or businesses, to secure an optimal capital structure for the Company and to capitalise on potential growth opportunities, as well as to finance further growth and the continued product development and commercialisation of the Company's business. It is proposed that the authorisation may also be used to increase the share capital in connection with share options and incentive schemes.

After registration of the Proposed Share Capital Reduction and the share capital increases related to the Private Placement and the Debt Conversions, the Company's share capital will be NOK 38,702,333.04. The total number of shares in the Company will be 92,148,412 shares, each with a nominal value of NOK 0.42.

Advokatfirmaet Thommessen AS is acting as Norwegian legal counsel to the Company in connection with the Private Placement.

For additional information, please contact:

Jørgen Mann, CEO Observe Medical

Mobile: +45 408 67 558

E-mail: [email protected]

Johan Fagerli, CFO Observe Medical

Mobile: +47 958 12 765

E-mail: [email protected]

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Johan Fagerli, CFO, on the time and date provided.

About Observe Medical:

Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.

The Company seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly in urine measurement and ultrasound, in combination with targeted M&A and distribution. Observe Medical is working with a network of leading distributors to provide outstanding solutions for healthcare professionals globally.

The Company is headquartered in Oslo, Norway.

Further information is available at www.observemedical.com.

Important notice:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom 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 this announcement 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 for 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.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict, and are beyond their control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither the Managers nor any of their affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their affiliates accepts any liability arising from the use of this announcement.

The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.