Ensurge Micropower ASA – Business Update and contemplated Private Placement

Ensurge Micropower ASA Registered Shs

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Oslo, Norway, 20 January 2025 – Ensurge Micropower ASA ("Ensurge” or the "Company”) (OSE: ENSU, and OTCQB: ENMPY) has made significant advancements in developing and producing the solid-state microbatteries. 

Key Progress and Achievements

• Encapsulation: Ensurge has resolved the encapsulation issues of the battery stack through process optimization and material selection.
• Battery performance: Ensurge is validating improvements to address leakage-related yield loss that will ensure high performance and reliability.
• High Production Yield: Ensurge has achieved 90% stacking yield after cell test for both 11- and 28-layer batteries, and is therefore confident in both repeatability and scalability. 
• Validated Battery Quality: The batteries meet – and even exceed - the stringent requirements for quality, durability, and scalability.
• Factory Capacity: By the end of January 2025, Ensurge will increase manning on the production line in San Jose to 24 hours/7 days a week coverage (24/7). These important achievements demonstrate Ensurge’s readiness to scale production and deliver batteries to the market. 

Ensurge has made strong progress through 2024 and the beginning of 2025, with a significant shift in momentum in the second half of the year. Due to increased manning and production capacity, Ensurge was able to move at an accelerated pace in identifying defects, suggesting and implementing fixes and moving on to the next challenge.

Management has maintained ongoing contact with numerous potential customers and partners who have expressed their interest and are now excited to take the commercial discussions to the next phase. Moving forward, the focus will be on defining the batteries' features to ensure the customer receives a "game-changing" product tailored to its needs. 

"We are excited to work closely with our strategic partners and customers to reach final delivery agreements for the Ensurge battery. Ensurge remains dedicated to delivering solid-state microbatteries that meet or exceed customer expectations, offering unmatched energy density, reliability, and scalability. This commitment, combined with our recent technological breakthroughs, positions Ensurge as a leader in the solid-state battery market” said Lars Eikeland, Ensurge's CEO.

To ensure that all technical and production-related improvements are fully validated, the Company is now focusing on producing a statistically significant number of batteries over the next few weeks. This is essential to confirm to the Company’s partners that the batteries consistently meet the highest standards of quality and performance.

Once this validation process is complete, the Company will start shipping 11-layer and 28-layer batteries to customers and strategic partners in accordance with evaluation agreements between the parties. The Company will also proceed with the development and production of 43-layer batteries, with shipments to follow in due course.

As a matter of financial update, the Company’s cash holding as per 31 December 2024 is USD 3,383,779, of which USD 1,606,256 is restricted.

Contemplated Private Placement

The Company has engaged Arctic Securities AS (the "Manager") to advise on and effect a contemplated private placement in the Company of 35,000,000 - 50,000,000 new shares in the Company (the "New Shares”) raising gross proceeds of NOK 35-50 million (the "Private Placement”).

The subscription price per New Share will be NOK 1.00 (the "Offer Price"). 

DNB Asset Management has committed to subscribe for and will be allocated New Shares in the Private Placement for a total amount of NOK 7 million.

In addition, the board of directors (the "Board”) will propose that all investors in the Private Placement are granted one (1) warrant (Nw.: frittstående tegningsrett) for every two (2) New Shares allocated to them in the Private Placement (the "Warrants”). The Warrant is transferable but will not be admitted to trading on Oslo Børs. Each Warrant will be free of charge and give the right to subscribe for one new share in the Company at the same exercise price as the Offer Price. The Warrants may be exercised from 26 September 2025 at 09:00 (CEST) to 10 October 2025 at 16:30 (CEST) (the "Exercise Period”). Following expiry of the Exercise Period, all Warrants not exercised will lapse without compensation. Completion of the Private Placement through delivery of the New Shares is not conditional upon the Warrants being issued and subscription of the New Shares will remain final and binding and cannot be revoked, cancelled or terminated by applicants if the Warrants are not issued. Issuance of the Warrants are subject to approval by the Company’s general meeting, where an extraordinary general meeting is expected to be held on or about 11 February 2025 (the "EGM”).

The net proceeds from the Private Placement will be used to i) fund the Company's operations, and ii) general corporate purposes.

The application period for the Private Placement will commence on 20 January 2025 at 16:30 (CET) and is expected to close on 21 January 2025 at 08:00 (CET) (the "Application Period"). The Company, in consultation with the Manager, reserves the right to at any time and in its sole discretion resolve to close or extend the Application Period or to cancel the Private Placement in its entirety without further notice. If the Application Period is shortened or extended, any other dates referred to herein may be amended accordingly.

The final number of New Shares will be determined at the end of the Application Period, and the final allocation will be made at the sole discretion of the Board after consulting with the Manager. The allocation of New Shares will be based on criteria such as (but not limited to) existing ownership in the Company, timelines of the application, relative order size, sector knowledge, investment history, perceived investor quality and investment horizon. The Board may, at its sole discretion, reject and/or reduce any applications. There is no guarantee that any applicant will be allocated New Shares. Notification of allotment and payment instructions is expected to be issued to the applicants on or about 21 January 2025 through a notification to be issued by the Manager.

The Private Placement will be settled with existing and unencumbered shares in the Company that are already listed on the Oslo Stock Exchange, pursuant to a share lending agreement expected to be entered into between the Company, the Manager and certain existing shareholders (the "Share Lending Agreement"). The Share Lending Agreement will be settled with new shares in the Company to be resolved issued by the Board pursuant to an authorization by the Company's general meeting held on 14 October 2024 (the "Authorization"). Settlement of the Private Placement is expected to take place on a delivery versus payment basis on or about 23 January 2025.

The Private Placement will be directed towards Norwegian and international investors, subject to applicable exemptions from relevant registration, filing and prospectus requirements, and subject to other applicable selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000. The Company may however, at its sole discretion, allocate amounts below EUR 100,000 to the extent exemptions from the prospectus requirements in accordance with applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.

The Board has considered the contemplated Private Placement in light of the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs' Circular no. 2/2014 and deems that the proposed Private Placement would be in compliance with these requirements. The Board holds the view that it will be in the common interest of the Company and its shareholders to raise equity through a private placement, in view of the current market conditions and the growth opportunities currently available to the Company. A private placement enables the Company to raise capital in an efficient manner, and the Private Placement is structured to ensure that a market-based subscription price is achieved. In order to limit the dilutive effect of the Private Placement and to facilitate equal treatment, the Board will consider carrying out a subsequent offering directed towards shareholders who did not participate in the Private Placement (see details below).

The Subsequent Offering
Subject to among other things (including among others (i) approval by the Board and the general meeting of the Company, (ii) the prevailing market price of the Company's shares being higher than the Offer Price and (iii) approval and publication of a prospectus (if relevant), propose to carry out a subsequent offering of new shares and warrants which, subject to applicable securities law, will be directed towards existing shareholders in the Company as of 20 January 2025 (as registered in VPS two trading days thereafter), who, (i) were not included in the pre-sounding phase of the Private Placement, (ii) were not allocated New Shares in the Private Placement, and (iii) 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 are expected to be granted non-tradable allocation rights. If carried out, the subscription period in a Subsequent Offering is expected to commence shortly after registration of the prospectus (if relevant), and the subscription price in the Subsequent Offering will be the same as the Offer Price in the Private Placement. Ensurge will issue a separate stock exchange notice with further details on the Subsequent Offering if and when finally resolved.

About Ensurge Micropower: 
Ensurge is Energizing Innovation (TM) with the first ultrathin, flexible, reliable, and fundamentally safe solid-state lithium microbattery for the 1 to 100 milliampere-hour (mAh) class of wearable devices, connected sensors, and beyond. The innovative Ensurge Microbattery enables energy-dense rechargeable products that are ideal for form-factor-constrained applications including hearables (hearing aids and wireless headphones), digital and health wearables, sports and fitness devices, and IoT sensor solutions that use energy harvesting to power everyday things. The company's state-of-the-art manufacturing facility, located in the heart of Silicon Valley, combines patented process technology and materials innovation with the scale of roll-to-roll production methods to bring the advantages of Ensurge technology to established and expanding markets.

Advisors
Arctic Securities AS is acting as manager and bookrunner in connection with the Private Placement. Ræder Bing advokatfirma AS is acting as the Company's legal advisor. Advokatfirmaet Thommessen AS is acting as legal advisor to the Manager.

For more information, please contact: 
Lars Eikeland - Chief Executive Officer 
E-mail: lars.eikeland@ensurge.com

This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and section 5 -12 of the Norwegian Securities Trading Act. This stock exchange release was published by Ståle Bjørnstad, VP, Corporate Development and IR, 20 January 2025 at 16:30 (CET).

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

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 or its securities 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 EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "EU Prospectus Regulation" means Regulation 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 believes 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 its control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company's services, changes in the general economic, political and market conditions in the markets in which the Company operate, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. 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 provide any guarantees 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 document.

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 Manager nor any of its 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 in the Company. Neither the Manager nor any of its affiliates accepts any liability arising from the use of this announcement.