| Source: Karo Pharma AB
Not for release, or for publication or distribution, directly or indirectly, in
or into the United States, Australia, Canada, Hong Kong, Japan, New Zeeland,
Singapore, South Africa or Switzerland, or within any other jurisdiction in
which the distribution of this press release would not comply with applicable
laws and regulations.
The Board of Directors of Karo Bio has decided to convene an Extraordinary
General Meeting on November 19, 2012 and there present a proposal to implement a
rights issue of approximately MSEK 38.7 with preferential rights for existing
shareholders. The purpose of the issue is to secure funding that will allow the
company to achieve a neutral cash flow, which is expected to be within reach in
2013. Three existing shares in Karo Bio entitle the holder to subscribe for one
new share. The subscription price is SEK 0.30 per share, corresponding to an
issue amount of up to MSEK 38.7 before transaction costs. The subscription
period for the rights issue is between November 28 and December 12, 2012. There
are subscription commitments and underwriting agreements for a total of MSEK
28.1 corresponding to 73 percent of the issue amount.

The notice of the extraordinary general meeting is attached. The Meeting will
also include a second control meeting.

Background and rationale
Karo Bio is a research company focused on the development of innovative drugs
acting through nuclear receptors. Karo Bio has previously conducted several
clinical trials but has for some time had a strategy based on lower costs and
reduced risk in the business. The aim is to reach agreements for the company's
projects in an early phase to thereby generate income and reduce risk in the
company. Furthermore, the company is working actively to seek different types of
financing. The Board assesses that Karo Bio has the potential to achieve a
positive cash flow in 2013.

To finance operations until a neutral cash flow can be reached, the company
needs to ensure further funding. The company assesses that the proposed rights
issue of MSEK 38.7 will fund operations at least until the end of 2013 without
obtaining additional licensing agreements or other financing.

Conditions for right issue
The rights issue means that Karo Bio’s share capital is increased by a maximum
of SEK 2,580,426.48 by the issuance of a maximum of 129,021,324 shares. Existing
shareholders have preferential rights to subscribe for new shares in proportion
to the number of shares already held. Those who on the record date are
registered as shareholders in Karo Bio are entitled to subscribe for one (1) new
share for every three (3) existing shares in the company.

In the event that all subscription rights are not exercised for subscription
with preferential rights, the Board shall, within the framework of the issue
maxima, decide on allocation without preferential rights. Thereby the allotment
at over-subscription will first be made to those who have subscribed for shares
with the support of subscription rights and who wish to subscribe for additional
shares, pro rata in proportion to their subscription with subscription rights,
and secondly to underwriters who have also expressed an interest to subscribe
for shares without subscription rights, pro rata in proportion to their declared
interest. Further allocation of subscription will be offered to others that have
registered an interest to subscribe for shares without subscription rights, pro
rata in proportion to their declared interest, and lastly to those who have
underwritten for subscription of shares in proportion to their underwriting

The record date for participation in the issue is November 26, 2012.
Subscription shall take place during the period from November 28, 2012 until
December 12, 2012. The subscription price has been set at SEK 0.30 per share,
which means that the issue, if fully subscribed, will provide Karo Bio with SEK
38,706,397 before transaction costs.

Allotment option
In order to satisfy any over-subscription in the rights issue, the Board
proposes that the Board be authorized to decide on the issuance of additional
shares up to a maximum total of 33,350,000 shares at an issue price of SEK 0.30
per share in order to enable the company to raise additional proceeds of MSEK
10. Upon full subscription of the rights issue the over-allotment represents 6.5
percent of existing share capital.

The reason for the deviation from preferential rights for existing shareholders
is to take advantage of the company’s capability to receive additional proceeds
in the event of an over-subscription of the rights issue, if deemed desirable.
The issue can be made with or without preferential rights for the company’s
shareholders according to the same allocation principles as for the rights
issue, however, the Board shall have the right to primarily accommodate any
subscription interest from the underwriters included in underwriting guarantees.

Subscription and underwriting guarantees
Existing shareholders who together hold 50,881,820 shares in Karo Bio
corresponding to 13.1 percent of the share capital have undertaken to subscribe
in full for their shares, which is about MSEK 5.1 of the offering. In addition
to subscription agreements an underwriting consortium has committed to subscribe
for up to MSEK 23 of the offering. Overall, about MSEK 28.1 of the issue is
guaranteed by subscription undertakings and underwriting, which represents 73
percent of the issue amount.

Participating in the consortium are the Chairman, Göran Wessman, with MSEK 1 and
the Board Members, Christer Fåhraeus and Per-Anders Johansson, with MSEK 4 and
MSEK 5 respectively.

Preliminary time-plan for right issue
October 26, 2012                Notice for extraordinary general meeting
November 19, 2012             Extraordinary general meeting
November 22, 2012             First day of trading excluding rights to
participate in the rights issue
November 26, 2012             Record date for participation in the rights issue
November 26, 2012             Expected date of publication of the prospectus
Nov 28 until Dec 12, 2012   Subscription Period
Nov 28 until Dec 7, 2012     Trading in subscription rights
December 17, 2012            Estimated date of publication of the outcome of the
rights issue

Redeye is financial advisor and Mannheimer Swartling legal advisor to the
company in connection with the rights issue.

For further information, please contact:
Per Bengtsson, CEO, mobile phone +46 76 002 6020 or e-mail
Henrik Palm, CFO, mobile phone +46 70-540 40 14 or e-mail henrik.palm@karobio.se

About Karo Bio
Karo Bio is a research and development company focused on innovative drugs for
important medical needs. The world-leading knowledge of nuclear receptors as
target proteins for the development of pharmaceuticals and the related
mechanisms of action, are utilized as a foundation for developing novel,
increasingly effective and safer pharmaceuticals. Karo Bio is active in
preclinical development focused on the areas of neuropsychiatry, inflammation,
autoimmune diseases, cancer and women’s health. The company has a number of
strategic collaborations with big pharma. Karo Bio is based in Huddinge, Sweden.
The company has around 44 employees and is listed on NASDAQ OMX Stockholm
(Reuters: KARO.ST).

Karo Bio publishes this information in accordance with the Swedish Securities
Markets Act and/or the Swedish Financial Instruments Trading Act. The
information was published on October 24, 2012, at 08:15 am CET

This press release is not an offer or solicitation to acquire shares in Karo
Bio. A prospectus relating to the rights issue referred to in this press release
will be filed with the Swedish Financial Supervisory Authority. After approval
and registration of the prospectus by the Swedish Financial Supervisory
Authority, the prospectus will be published and made available on Karo Bio’s

This press release does not constitute or form part of an offer or solicitation
to purchase or subscribe for securities in the United States. The securities
referred to herein may not be sold in the United States absent registration or
an exemption from registration under the US Securities Act of 1933, as amended.
Aspiro does not intend to register any portion of the offering of the securities
in the United States or to conduct a public offering of the securities in the
United States. The information in this press release may not be announced,
published or distributed, directly or indirectly, to the United States,
Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa or
Switzerland, or in any other jurisdiction where the announcement, publication or
distribution of the information would not comply with applicable laws and

This press release is also available at www.karobio.com and