OSE Immunotherapeutics Receives a €10 Million Payment Corresponding to the First Tranche of the Financing Granted by the European Investment Bank

Regulatory News:

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OSE Immunotherapeutics (Paris:OSE) (ISIN: FR0012127173; Mnemo: OSE) announced today a €10 million payment corresponding to the first tranche of the financing granted by the European Investment Bank (EIB). The finance contract was signed on February 12, 2021.

The finance contract allows the Company to borrow up to €25 million. The second and third tranches, respectively of €10 million and €5 million, may be drawn at the hand of the Company, subject to the achievement of specific clinical steps.

This type of financing, granted by the EIB and benefiting from a guarantee from the European Commission within the framework of the European Fund for Strategic Investments (known as the “Juncker Plan”), aims to support development research and innovation projects developed by companies with high growth potential.

This first tranche will carry a fixed interest of 5% per year paid annually, with a maturity of five years.

The first tranche is associated to the issuance of warrants to the EIB giving right, in the event of exercise, to the subscription of 850,000 shares of the Company (i.e. 4.44% of the share capital on an undiluted basis). Warrants are not the subject of an application for admission to trading on any market.

The subscription price is €0.01 per warrant, i.e, €8,500.

In order to limit the dilutive impact over time, and except in the event of the occurrence of an early exercise event (notably a change of control, including the loss of a significant holding by the current management shareholders, or other events of default, including a significant change in the current governance not approved by the EIB), the warrants will only be exercisable from 9 July 2026, i.e. five years from the drawdown of the relevant tranche and at the latest at the end of a period of twelve years following their issue (i.e. 9 July 2033).

The subscription price for the new shares upon exercise of the warrants was set at 10.59 euros per share, i.e. a discount of 2.5% compared to the volume-weighted average of the three trading days preceding the pricing.

In accordance with the warrant agreement, the EIB has an anti-dilution clause allowing it to benefit from additional warrants, in the event of a capital increase of the Company at a price less than €20 per share, after application of a deductible on the first 1,500,000 shares to be issued. In such a case, the Company would have to allocate additional warrants to the EIB allowing it to remain at a potential capital level of 4.44% (corresponding to its theoretical holding percentage post-allocation and exercise of the warrants subscribed in the context of the first tranche of funding).