SEALSQ Announces Initial $10.0 Million Closure of Private Placement of Convertible Notes and Warrants

Insider Summary:

• SEALSQ has announced that it has closed an initial $10.0 million tranche of a possible $20.0 million total private placement pursuant to the terms of a securities purchase agreement, dated July 11, 2023, with select institutional investors.
• The investment, in the form of a Senior Unsecured Original Issue 4% Discount Convertible Promissory Note, resulted in earnings before issuance to SEALSQ of approximately $9.6 million.
• The note has a maturity of 24 months and bears interest at 4% per annum (adjustable).

PRESS RELEASE — Tortola, British Virgin Islands/July 12, 2023 (GLOBE NEWSWIRE) — Tortola, British Virgin Islands — July 12, 2023: SEALSQ Corp (Nasdaq: LAES) (“SEALSQ” or the “Company”), a company focused on regarding the development and sales of Semiconductor, PKI, and Post-Quantum hardware and software products, announced today that it has closed its initial $10.0 million tranche of a possible total of $20.0 million private placement under the terms of a securities purchase agreement, dated 11 July, 2023, with select institutional investors (“Investors”).

The investment was in the form of a Senior Unsecured Original Issue 4% Discount Convertible Promissory Note (“Note”), resulting in revenue before expenses for SEALSQ of approximately $9.6 million. The note has a maturity of 24 months and bears interest at 4% per annum (adjustable). In addition, the Notes will be convertible into SEALSQ common stock at an initial conversion price equal to the lower of $30.00 per common share or 92.5% of the lowest daily volume-weighted average price of the common stock during the ten trading days immediately. prior to notification of the conversion of the Notes, subject to adjustments as further specified in the Notes. The note will be paid in full in cash at maturity. In addition, Investors have the option of prepayment of up to 30% of the amount of the next financing issue.

As part of the investment, the Investor was also granted five-year warrants to purchase an aggregate of 245,816 common shares at an initial exercise price of $30.00 per common share, adjustable.

Maxim Group LLC acts as the sole placement agent for private placements.

SEALSQ has agreed to file a registration statement registering for the resale of common shares which may be issued after the conversion of the Notes and after the exercise of the warrants. Subject to mutual agreement of the parties, following the effectiveness of the resale registration statement, and subject to fulfillment of certain conditions, a second tranche of funding may be provided by the Investor in a principal amount of up to $10.0 million, less than 4 % discount on the original edition. The additional principal amount, if funded, will be added to the principal amount of the Notes, and the Investor is entitled to receive additional warrants (with the same terms as the initial warrants) to purchase common stock at 30% of the face value of the notes divided by the volume-weighted average price .

SEALSQ plans to use the net proceeds from this financing to fund:

• Expansion of US operations by recruiting top talent and increasing sales force to better serve the growing US customer base.
• Improvement of production facilities in the US and France by investing in advanced manufacturing and testing equipment aimed at increasing efficiency and reducing risks of localization of semiconductor production.
• Additional investment for the development of a new generation of quantum-ready semiconductors designed to meet future computing needs and offer superior processing power and energy efficiency.

Carlos Moreira, CEO of SEALSQ noted, “Over the years, we have made significant investments in researching and developing state-of-the-art quantum-ready semiconductors and we have been at the forefront of global innovation by providing solutions that can be used in a wide range of applications and industries including cities. smart, smart home, IT infrastructure, finance, healthcare, etc. With this new funding, we are now ready to embark on a new phase of growth and innovation and prepare for a future where quantum computing is expected to play a critical role for the global economy. With the quantum computing market projected to reach $65 billion by 2030, quantum-ready semiconductors are expected to form a significant share of that market.”

The general consensus among industry experts is that quantum computing, and by extension quantum semiconductors, will be a major growth area over the next decade. Quantum computing has the potential to revolutionize many industries, including finance, healthcare, artificial intelligence, and more, by solving complex problems much more efficiently than traditional computers.

About SEALSQ:
SEALSQ focuses on selling integrated solutions based on Semiconductor, PKI and Provisioning services, while developing Post-Quantum technology hardware and software products. Our solutions can be used in a wide range of applications, from Multi-Factor Authentication tokens, Smart Energy, Smart Home Appliances and IT Network Infrastructure, to Automotive, Industrial Automation and Control Systems.

Post-Quantum Cryptography (PQC) refers to cryptographic methods that are secure against quantum computer attacks. As quantum computers become more powerful, they may be able to crack many of the cryptographic methods currently used to protect sensitive information, such as RSA and Elliptic Curve Cryptography (ECC). PQC aims to develop new cryptographic methods that are secure against quantum attacks.

For more information, please visit www.sealsq.com.

Forward Looking Statements

This communication expressly or impliedly contains certain forward-looking statements regarding SEALSQ Corp and its businesses. Forward-looking statements include statements regarding our business strategy, financial performance, operating results, market data, events or developments that we expect or anticipate to occur in the future, as well as other statements that are not historical facts. Although we believe that the expectations expressed in the forward-looking statements are reasonable, no assurance can be given that those expectations will prove to be true. These statements involve known and unknown risks and are based on a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results could differ materially from those expressed or implied by such forward-looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include SEALSQ’s ability to implement its growth strategy; SEALSQ’s ability to expand its US operations; SEALSQ’s ability to upgrade its production facilities in the US and France SEALSQ’s ability to make additional investments towards the development of a new generation of quantum-ready semiconductors; SEALSQ’s ability to enter into profitable transactions with material parties, including a limited number of significant customers; market demand and conditions of the semiconductor industry; growth in the quantum computing market; and risks discussed in the SEALSQ filing with the SEC. The risks and uncertainties are further explained in the report that SEALSQ filed with the SEC.

SEALSQ Corp provided this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise.

SEALSQ Corp.
Company Contact: Carlos Moreira
Chairman & CEO
Tel: +41 22 594 3000
info@sealsq.com

SEALSQ Investor Relations (USA)
Contact: Lena Cati
Equity Group Inc.
Tel: +1 212 836–9611
lcati@equityny.com

SOURCE: Yahoo Finance