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Background and Motive

Risk Intelligence A/S is a leading provider of security risk intelligence, offering global security threat and risk assessments. With the cutting-edge cloud-based solution, the Risk Intelligence System, clients gain the power to monitor international security threats at sea, in ports, and on land, empowering planning and operations. The Company assists clients operating 15.7% of the World commercial fleet, as well as a range of other private and government clients and two of the world's top three largest logistics companies.

Crafted with global expansion in mind, Risk Intelligence's business model is designed for international scalability. Through a subscription-based approach, the company not only generates consistent annual revenues with a net retention rate of 116%, but also increases the client base with close to full scalability in its operations.

The overarching objective of the 2025 Strategy is to achieve a 30% average year-on-year growth in topline revenue throughout the designated period in combination with reaching initially positive EBITDA and subsequently profit. This ambitious target is set to be realized through a series of strategic initiatives.

First and foremost, the company launches a new platform for the Risk Intelligence System in Q4 2023. This innovative move will expand the revenue streams from one to three: the original standard subscription fees, additional revenue from new fee-based features, and revenue derived from new fee-based third-party data.

Secondly, revenue growth will also be enabled by close cooperation with partner companies to facilitate the sale of Risk Intelligence data integrated into their products, targeting market segments horizontally or vertically previously unexplored by Risk Intelligence. This dual-pronged approach encompasses both horizontal market expansion, such as venturing into the luxury leisure market involving super and mega yachts in collaboration with MedAire/International SOS, as well as vertical market growth in the existing commercial shipping market with Navtor. Finally, with Geollect, Risk Intelligence has a partnership with a dual focus on commercial ventures as well as technical development and continuous updating of the new platform.

Lastly, the 2025 Strategy is geared towards achieving a positive net result starting in 2024, with support stemming from the transition to positive cash flow from operations commencing in Q4 2023 and continuing onwards throughout the strategy period.

Use of proceeds

Upon full subscription in the Rights Issue, Risk Intelligence will receive approx. DKK 18.4 million before issue costs. The net proceeds from the Rights Issue of approx. DKK 15.8 million will together with a long-term loan with EIFO, the Danish State growth fund, Vækstfonden, of up to DKK 5 million (based on a conditional commitment as per above), or a total of DKK 20.8 million are intended to be available for the following uses, in priority order with estimated distribution of the issue and loan proceeds:

• Investments in the new platform (approx. DKK 2 million).

• Removal of all short-term loans (approx. DKK 13 million).

• General liquidity reserve and for growth initiatives (approx. 5.8 million).

How to subscribe

1. Only for existing shareholders and owners/buyers of unit rights: Subscribe for the number of New Units (consisting of shares) that is guaranteed with the unit rights. You should use your banks system under “Corporate Actions” (which is a bank-term for ongoing issues of shares/units, etc.) or instruct your bank manager. If you want to subscribe for more New Units than those covered by your unit rights (you need 13 rights to buy one Unit at 15.60 DKK, consisting of 12 shares at 1.30 dkk), then you can either buy additional rights in the market or subscribe for additional units without rights as described in step 2 or 3 below.

2. For everybody that want to subscribe for New Units in the General Subscription (oversubscription/extra shares): This is available for existing shareholders as well as new investors with preference for existing shareholders. Your bank should have information in their Corporate Actions online menu about the RISK INTELLIGENCE share issue, that enables you to subscribe for as many New Units as you would like. You should follow their instruction. There is no minimum or maximum limit you can subscribe for. In some banks it is difficult/impossible to use their system for General Subscription, i.e. subscription without rights/oversubscription. In that case, or you should follow step 3.

3. General fall-back for everybody that want to subscribe for New Units: You can use the general subscription form for oversubscription available on the RISK INTELLIGENCE investor page. You should complete the form and send it to your bank before October 24. It’s very important once sending the subscription form to your bank, that they make sure to submit it to their backoffice and doesn’t send it to the settlement agent (Nordic Issuing) themselves. All subscriptions needs to go through your banks backoffice. Get the subscription form here. 

The offer in Summary

Offer & issue volume:

The rights issue comprises a maximum of 14,158,512 shares, corresponding to an increase in the share capital of a maximum of DKK 1,415,851.20. In the event of full subscription in the Rights Issue, Risk Intelligence will receive approximately DKK 18.4 million before issue costs.

Subscription rights:

Anyone who, on the record date of 10 October 2023, is entered in the share register, maintained by VP Securities A/S has preferential rights to subscribe for new shares in the Rights Issue. One (1) existing share entitles to one (1) unit right. Thirteen (13) unit rights give the right to subscribe for one (1) unit consisting of twelve (12) new shares.

Subscription price:

The subscription price in the Rights Issue will be DKK 15.6 per unit, corresponding to DKK 1.30 per share.

Valuation:

The valuation of Risk Intelligence (pre-money) is approximately DKK 19,9 million.

Subscription period:

The subscription period in the Rights Issue runs from 11 October 2023 to and including 24 October, 2023.

Trading in unit rights (Risk Intel./T-ret )

October 11 – October 20 2023.

Trading in temporary units (Risk Intel./Midl)

October 11 2023 – until the Rights Issue has been registered with the Danish Business Authority (Dk. Erhvervsstyrelsen).

Subscription commitments and underwriting commitments

Risk Intelligence A/S has received subscription commitments of approx. DKK 5.6 million, corresponding to approx. 30.2 percent of the Rights Issue, from board and management, existing and new shareholders. No remuneration will be paid for the subscription commitment. In addition, the Company has received guarantee commitments from external investors of approx. DKK 8.3 million, corresponding to approx. 45 percent of the Rights Issue. The Company has received subscription commitments and underwriting commitments of approx. DKK 13.9 million in total, corresponding to approx. 75.2 percent of the Rights Issue.

Links

PRESS RELEASES:
Press release on the start of the subscription period and published memorandum, 2023-10-11
Press release on rights issue, 2023-09-11
Press release on Extraordinary General Meeting 2023, 2023-09-11
Press release with minutes from the 2023 Extraordinary General Meeting, 2023-10-03
Press release on the board of Risk Intelligence A/S resolving on a partially (75.2 percent) secured rights issue of shares, 2023-10-03
Press release on clarifying the subscription process for ongoing rights issue, 2023-10-12
Press release on members of management and the Board of Directors subscribing for units, 2023-10-16
Press release on the last day of subscription of units in Risk Intelligence A/S, 2023-10-20
Press release on the outcome of the rights issue, 2023-10-27

MEMORANDUM
TEASER
SUBSCRIPTION FORM
PR REGARDING THE TRANSACTION

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