Scandinavian Enviro Systems has resolved on a directed issue of 62.5 million new shares and 2.5 million warrants to Nordic Restructuring and Growth Capital 1 following the first SEK 5 million drawdown under the convertible loan agreement signed in August 2026. NRGC requested conversion of the entire first loan tranche immediately after the funds were disbursed, resulting in the issuance of new Enviro shares at SEK 0.08 per share and repayment of the SEK 5 million loan through set-off. The share issue increases Enviro’s outstanding shares from approximately 1.268 billion to 1.330 billion and results in dilution of about 4.7% for existing shareholders. The accompanying warrants have an exercise price of SEK 0.167 per share and could create an additional dilution of approximately 0.2% if fully exercised. Enviro said the financing arrangement is intended to provide liquidity during its ongoing company reorganization and support continued operations.

NRGC converts entire first SEK 5 million tranche

Enviro requested its first SEK 5 million drawdown under the financing agreement on October 19, 2026. NRGC subsequently disbursed the loan and on October 21 requested conversion of the entire amount into newly issued Enviro shares.

As a result, Enviro’s board approved the directed issue of 62.5 million shares to NRGC. Payment is being made through set-off against NRGC’s SEK 5 million claim, meaning the first convertible loan tranche is considered fully repaid following the conversion.

New shares issued at SEK 0.08 each

The subscription price for the new shares was set at SEK 0.08 per share. Under the convertible loan agreement, the conversion price corresponds to 95% of the average of the three lowest daily volume-weighted average prices of Enviro’s shares during the ten trading days preceding NRGC’s conversion request.

The terms follow the financing agreement signed between Enviro and NRGC on August 26, 2026.

Convertible financing provides access to up to SEK 100 million

The broader agreement gives Enviro access to convertible loans totaling up to SEK 100 million over a 36-month period.

Enviro can request interest-free convertible loans in individual tranches of up to SEK 5 million. Following each drawdown, NRGC may request conversion of the corresponding loan into newly issued Enviro shares.

Enviro must also issue warrants to NRGC free of charge in connection with each drawdown under the agreement.

Enviro issues 2.5 million warrants

Alongside the share issue, Enviro has approved a directed issue of 2.5 million warrants to NRGC at no cost.

Each warrant gives the holder the right to subscribe for one new Enviro share at an exercise price of SEK 0.167. This represents 150% of the volume-weighted average price of the company’s shares on October 19, 2026, in accordance with the financing agreement.

The warrants can be exercised for three years from their date of issue and are subject to customary recalculation provisions.

Share issue creates approximately 4.7% dilution

The issuance of 62.5 million shares increases the total number of Enviro shares from 1,267,734,170 to 1,330,234,170.

The company’s share capital increases by SEK 2.5 million as a result of the transaction, while existing shareholders face dilution of approximately 4.7%.

Warrants could add another 0.2% dilution

If all 2.5 million warrants are exercised, Enviro’s share count would increase further to 1,332,734,170.

Full warrant exercise would increase share capital by an additional SEK 100,000 and result in approximately 0.2% further dilution.

New shares expected to trade on Nasdaq First North

The newly issued shares are expected to be admitted to trading on Nasdaq First North Growth Market after registration with the Swedish Companies Registration Office and Euroclear Sweden.

The warrants themselves are not intended to be listed or traded on a marketplace.

Financing supports Enviro during company reorganization

Enviro said the directed issue is intended to secure financing in a time- and cost-efficient manner while the company remains in reorganization.

The board concluded that alternative fundraising, including a rights issue, would be less suitable under current circumstances because uncertainty surrounding the reorganization could create a substantial risk of insufficient subscription.

The company also argued that a rights issue would entail higher transaction costs relative to the amount of capital being raised.

Board says NRGC structure provides committed capital

Enviro noted that NRGC is contractually required to fund drawdowns once the relevant conditions have been satisfied or waived. The company therefore views the facility as a more predictable source of liquidity during the reorganization process.

The terms of the financing agreement were negotiated with NRGC on an arm’s-length basis and are considered by Enviro’s board to be on market terms.

Shareholders’ preferential rights waived

The transaction was carried out as a directed issue and therefore deviates from existing shareholders’ preferential rights.

Enviro’s board said the need to secure continued financing during the company reorganization outweighed the reasons normally supporting a preferential rights issue and considered the transaction to be in the interests of the company and its shareholders.

First tranche follows earlier financing waiver

The share conversion follows Enviro’s decision on October 19 to request the first SEK 5 million drawdown under the NRGC agreement. At that time, NRGC waived conditions that would otherwise have required Enviro’s reorganization plan to become final and the reorganization to be concluded before the tranche could be disbursed.

The latest transaction converts that entire first tranche into equity while leaving the wider financing framework available for future drawdowns, subject to the terms and conditions of the agreement.

Enviro continues operations during restructuring

Scandinavian Enviro Systems develops technology for recovering raw materials from end-of-life products, including tires. Its tire recycling process is designed to recover carbon black and oil through pyrolysis for reuse in industrial applications.

The company says carbon black recovered using its technology can reduce carbon dioxide emissions by up to 93% compared with virgin carbon black when used in new tire production.

Any additional share or warrant issues resulting from future NRGC drawdowns or conversion requests will be announced separately if and when they occur.

Original announcement by Scandinavian Enviro Systems.