SEALSQ Announces Signing of a Term Sheet for the Third $10.0 Million Tranche of Convertible Notes and Warrants Private Placement

Geneva, Switzerland, Feb. 21, 2024 (GLOBE NEWSWIRE) -- SEALSQ Corp (Nasdaq: LAES) (“SEALSQ” or “Company”), a leader in semiconductor, PKI, and Post-Quantum technology development, today announced the signing of a non-binding term sheet for a third tranche of a private placement, amounting to $10 million, which is part of the Company's private placement pursuant to the securities purchase agreement entered into on July 11, 2023 and first amended on January 9, 2024 with a select group of institutional investors solicited by a placement agent (the “Investors”). The closing of the third tranche is subject to the completion of an amendment to the securities purchase agreement, other definitive legal documentation and the satisfaction of certain closing conditions, including approval by our board of directors. Of note, the first $10 million tranche under this securities purchase agreement has been repaid (in the form of the Company’s Ordinary Shares) with slightly more than 50% of the second tranche of $10 million still outstanding.

The term sheet provides for a discount of 2.5% on the Senior Unsecured Original Issue Convertible Promissory Notes (“Notes”) meaning gross proceeds should be approximately $9.75 million. The 24-month maturity Notes, bearing an interest rate of 4% per annum, will be convertible into SEALSQ's Ordinary Shares at an initial conversion price equal to the lesser of $5.50 per Ordinary Share or 93% of the lowest daily volume weighted average price of the ordinary shares during the ten trading days immediately preceding the notice of conversion of the Notes, subject to adjustment as further specified in the Notes. The Notes will be fully repayable in cash upon maturity. In addition, each Investor will have the option of prepayment of up to 15% of the issuance amount out of the proceeds of any subsequent financing. The Investors have agreed to use commercially reasonable efforts to limit their sale of shares received under the third tranche and any subsequent tranches in a weekly quantity not to exceed 10% of the average weekly trading volume of the Ordinary Shares on the Nasdaq in that week.

Under the terms of the term sheet, each Investor will receive five-year warrants for shares equivalent to 30% of the Principal Amount of such Investor’s respective Note divided by the VWAP of the Ordinary Shares as of the trading date prior to the date of funding of the applicable subscription amount with an exercise price of $5.50.