#25-126 Information regarding the last day of trading in paid subscribed units and the first day of trading in warrants issued by Front Ventures AB

Front Ventures AB’s unit issue has been registered with the Swedish Companies Registration Office: the last day of trading in paid subscribed units (Front Ventures BTUB, ISIN SE0026875825) is set for 30 December 2025. Warrants series 4 B (Front Ventures TO4 B, ISIN SE0026875833) will commence trading on 8 January 2026 and have a last trading day of 10 February 2027; the issue comprises 91,911,714 instruments on NGM (market ID NSME, segment NSSE) with tick-size/liquidity band A, providing a defined timetable for convertibility and secondary-market trading of the warrants.

Analysis

Market structure: The conversion of paid subscribed units into 91,911,714 warrants (FRNT TO4 B) listed 2026-01-08 increases derivative supply and creates a leveraged claim on Front Ventures (FRNT BTUB). Short-term winners are liquidity providers and volatility sellers capturing bid/ask spreads and theta; long-term holders of underlying equity are at risk of dilution when/if warrants are exercised (exercise window ends ~2027-02). Expect elevated traded volumes and intraday volatility in small-cap Swedish energy/tech plays around listing and key corporate events.

Risk assessment: Tail risks include a large-scale exercise or cashless conversion that floods the market with new shares causing a >15–30% downward repricing; regulatory/registration hiccups around conversion could freeze trading for days. Immediate timeframe (days–weeks) sees volatility spikes around 2025-12-30 and 2026-01-08; medium-term (months) depends on corporate news and implied exercise economics; long-term (through 2027) depends on net dilution relative to float and any capital raised. Hidden dependency: exercise price and conversion ratio (not disclosed here) are the critical unknown—if exercise price << market, forced dilution is likelier.

Trade implications: Direct plays: trade FRNT TO4 B as a levered play only if implied vol < realized vol by ≥10 pts and you willing to hold to Feb 2027; otherwise prefer selling short-dated premium. Pair trade: short 1–2% notional of FRNT BTUB vs 1–2% long of TO4 B to capture decay ahead of catalyst windows if warrants are deep out-of-the-money. Options strategies: consider buy-call spreads on TO4 B or selling calendar spreads if IV term structure shows >8–10% contango.

Contrarian angles: Consensus will underweight the dilution effect if warrants <20% of post-conversion float; this is wrong — if warrants >10% of current float expect 10–25% downside on exercise. Historical parallels: SPAC/unit-to-warrant conversions in Nordic small caps often produce 20%+ drawdowns at exercise. Unintended consequence: passive index flows could exacerbate moves if FRNT enters/leaves small-cap indices; hedge accordingly.

Key Decisions for Investors

• From 2026-01-08, consider establishing a tactical 1–2% NAV long position in FRNT TO4 B only if implied volatility <40% and open interest <25% of issued warrants; target a 30–50% upside to expiry (Feb 2027) or a max loss of 60% (stop-loss).
• If warrants outstanding represent >10% of current shares outstanding, establish a 1–2% NAV short on FRNT BTUB ahead of 2026-01-08 to position for dilution-related repricing; cover on any share buyback/recapitalization announcement or if price rallies >20% from entry.
• Implement an options market-making/volatility strategy: sell 30–60 day call spreads on FRNT TO4 B when IV > realized by ≥10 percentage points, size to capture time decay (target annualized carry >15%); unwind before major corporate catalysts or 30 days before exercise windows.
• Require pre-trade checks: do NOT deploy >2% NAV until you obtain exercise price and conversion ratio. If exercise price < market price by >20%, increase short-underlying allocation to 2–3% and reduce long-warrant exposure to zero within 5 trading days.