SERSTECH AB: Serstech announces a rights issue of 25MSEK

This announcement is published in both the Swedish and the English language. In the event of inconsistency or discrepancy between the English version and the Swedish version of this publication, the Swedish language version shall prevail.

For the past three years, Serstech has built and refined a well-functioning organization and a global distribution network, with currently 90 partners. The commercial foundation of the company was established in 2018 and 2019 and in early 2021 two new instruments and a new software platform were launched. The new products introduce unique selling points to both the Serstech hardware and software portfolio, the lack of which has been a limiting factor in sales in the past. In a market governed by public tenders, the unique features are of utmost importance since they can be used to exclude the competition from meeting the requirements in tenders.

The last two reported quarters have been both profitable and cashflow positive and orders of more than 8 MSEK have been announced for invoicing in the first quarter of 2021. The Board of Directors has previously set a goal of having at least 50% growth per year the coming years and this goal remains. In addition, the Board estimates that the company will not need additional capital to finance its day-to-day operation, provided that the effects of the Covid-19 pandemic decline during the summer of 2021.

The products of the seven main competitors in the handheld Raman market are relatively equivalent and have similar technical designs. Serstech’s approach to product development is different from the competition and the company has focused a lot of attention on research and innovation. In 2020 this investment resulted in new product concepts with the potential to bring something radically different to a market that has been basically the same for the past 15 years. The first patent application is ready to be filed and is expected to be approved.

The customers in the security industry, which are Serstech’s main target group today, are generally conservative and slow moving. This customer behaviour has allowed the existing competitors on the Raman market to be successful, despite a low level of innovation and slow product development. Serstech has identified several customer needs that are not fulfilled by the solutions offered today and will therefore invest in a new generation of solutions with the potential to disrupt the market. To ensure that the new solutions give Serstech a first mover’s advantage, the Board has decided to suggest to the annual general meeting that a rights issue of 25 MSEK is approved. The purpose of the rights issue is to enable the development of the new generation of products at a much higher pace than would otherwise be possible.

The new rights issue is fully underwritten. The underwriters consist mainly of the Board, the Management and staff.

For further information, please contact:

Stefan Sandor,
CEO, Serstech AB
Phone: +46 739 606067
Email: ss@serstech.com

Thomas Pileby,
Chairman of the Board, Serstech AB
Phone: +46 702 072643
Email: tp@serstech.com

or visit: www.serstech.com

This is information that Serstech AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above at 18:15 CET on March 29, 2021.

Certified advisor to Serstech is Svensk Kapitalmarknadsgranskning AB (SKMG), phone: +46 11 323 07 32, e-mail: ca@skmg.se.

About Serstech
Serstech delivers solutions for chemical identification and has customers around the world, mainly in the safety and security industry. Typical customers are customs, police authorities, security organizations and first responders. The solutions and technology are however not limited to security applications and potentially any industry using chemicals of some kind could be addressed by Serstech’s solution. Serstech’s head office is in Sweden and all production is done in Sweden.

Serstech is traded at Nasdaq First North Growth Market and more information about the company can be found at www.serstech.com