Smart Wires Technology Ltd (“Smart Wires” or the “Company”) is pleased to announce that a debt financing agreement (the “Financing Agreement”) has been signed between the Company’s subsidiary Smart Wires Inc as the Borrower and an affiliate of Innovatus Capital Partners, LLC (“Innovatus”) as Lender, granting Smart Wires access to a debt facility of up to USD 50 million (the “Term Loan”). The Term Loan may be used to fund ongoing operations and working capital expenses and for costs, fees and expenses incurred in connection with the Financing Agreement.

The Term Loan includes two tranches. The first tranche consists of USD 30.0 million and is expected to be drawn down on December 31, 2021 (the “Closing Date“). The second tranche consists of USD 20.0 million and will be drawn at the Company’s election between April 1, 2023, and September 30, 2023, following satisfaction of certain conditions precedent, including a funding milestone of a trailing six months revenue of USD 40.0 million.

Prior to the fourth anniversary of the Closing Date, Innovatus will have the right to convert up to 10% of the outstanding principal of the Term Loan into common stock in the Company at a price per share equal to SEK 45, adjusted for the USD/SEK exchange rate at the time of the conversion.

Key terms of the Term Loan:

• Borrower: Smart Wires Inc.
• Loan amount: USD 30.0 million in first tranche and USD 20.0 million in second tranche, provided that funding milestone of a trailing six months revenue of USD 40.0 million is achieved.
• Maturity: June 30, 2027, unless earlier repaid.
• Repayment: The principal shall be repaid by equal monthly installments beginning (a) June 1, 2025, if neither the average restricted cash is less than USD 15.0 million duing the trailing 12 months prior to date nor the net liquidity (excluding restricted cash) is at least USD 50.0 million immediately prior to June 1, 2025, (either such event, the “Initial Extension Event”), or (b) the February 1, 2026, if an Initial Extension Event has occurred, but the event described in the following clause (c) has not occurred or an Event of Default has occurrerd on or prior to February 1, 2026, or (c) February 1, 2027, if the Company has achieved an Initial Extension Event and trailing 12 months revenue of USD 100.0 million and cash flow breakeven for two consecutive quarters prior to the fourth anniversary of the Closing Date and no Event of Default has occurred on or prior to February 1, 2026.
• Interest: The interest rate of the Term Loan is floating at (a) the greater of (i) the Prime Reference Rate and (ii) 3.25% plus (b) 4.25% per annum. At the Borrower’s election, a portion of the interest may be paid in kind and capitalized as principal at an incremental rate of 1.5%. Default interest rate is 5% above the applicable interest rate.
• Security: First ranking security over substantially all assets of the Borrower and on a post-closing basis, substantially all of the assets of the Company, in each case subject to customary exceptions.
• Covenants: Affirmative and negative covenants, including a minimum liquidity covenant and a performance covenant, as well as events of default provisions customary to a financing of this nature are set out in the Financing Agreement.

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CONTACTS

Peter G. Wells, CEO

E-mail: peter.wells@smartwires.com

Tel: +1 (510) 340-9797

Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: certifiedadviser@penser.se, Tel: 08-463 83 00, www.penser.se.

This information is information that Smart Wires Technology Ltd is obliged to make public pursuant to the EU Market Abuse Regulation. The information in this press release has been made public through the agency of the responsible person set out above for publication at the time stated via the Company’s news distributor Cision at the publication of this press release.

ABOUT INNOVATUS CAPITAL PARTNERS, LLC

Innovatus Capital Partners, LLC, is an independent adviser and portfolio management firm with approximately $1.5B in assets under management. Innovatus adheres to an investment strategy that identifies disruptive and growth opportunities across multiple asset categories with a unifying theme of capital preservation, income generation, and upside optionality. Further information can be found at www.innovatuscp.com.