- This addendum alters the formula for calculating the number of shares liable to result from the exercise of the equity warrants (BSA) that will be attached to the convertible notes that will be issued in favor of Winance (OCABSA), subject to the prior approval of the Shareholders’ Meeting of May 23, 2022.
- Genomic Vision also specifies that the OCABSA convertible notes with equity warrants attached issued in favor of Winance, subject to the prior approval of the Company’s shareholders, will be subscribed to at 96% of their par value, giving maximum total gross proceeds of 28,800,000 euros.
- Genomic Vision has updated its working capital requirements for the next 12 months.
Genomic Vision(FR0011799907 – GV – the “Company”), a biotechnology company that develops tools and services dedicated to the analysis and control of changes in the genome, today announced the signing of an addendum to the contract signed with Winance on April 11, 2022 for the purpose of implementing a new financing line providing for the provision, subject to the prior approval of the Shareholders’ Meeting of May 23, 2022 and the conditions for drawing down each tranche (notably that the share price should not be lower than the nominal value), of a maximum of 15 financing tranches subscribed to at a subscription price equal to 96% of their par value, i.e. a price of 1,920,000 euros per tranche with a nominal value of €2m each, representing a total subscription price of 28,800,000 euros (for a total nominal value of €30m).
The addendum provides for each BSA equity warrant giving the holder the right to subscribe to “N” shares, N being determined via the following formula:
N = 0.401/ PE
Where “PE” is the subscription price of each share liable to result from the exercise of the BSA equity warrants and will be equal to 130% of the lowest daily volume-weighted average price of a Genomic Vision share (as reported by Bloomberg, or any equivalent provider should no figure be published by Bloomberg) over the ten (10) trading days immediately preceding the date of issuance of the OCA convertible notes from which the BSA equity warrants are detached,
It is specified that the maximum number of shares liable to be issued upon exercise of the BSA equity warrants is thus increased from 12,000,000 to 1,2000,000,000 ordinary shares (assuming all BSA equity warrants are exercised at a theoretical share price equal to the new nominal value of the Company’s shares of 0.01 euros that will be put to the EGM of May 23, 2022).
The other legal terms, characteristics of the various instruments and main obligations of the Company and Winance are described in the Appendix to the Company’s press release of April 11, 2022.
The issue by the Company of the OCABSAs under the new financing line with Winance, the maximum net amount of which (if the Company decides to pay the commitment fee by delivery of OCAs) would amount to 28.7 million euros (after deduction of various consultancy fees, in particular legal fees, estimated at 0.1 million euros related to the implementation of the financing), is made to meet the Company’s working capital shortfall for the next 12 months and thus ensure the continuation of its business and for the balance to meet, in whole or in part, the financing requirements for the next three years estimated at approximately 27.3 million euros, in order to continue the development of the following main strategic priorities.
-48%: Consolidation and reinforcement of the R&D teams, continuation of ongoing projects and expansion of the portfolio of applications:
1/Development of new high value-added solutions to meet the needs of the following markets:
- Genome analysis and editing, and bio-production,
- Basic and clinical research mainly focused on oncology and age-related diseases,
- In-vitro diagnosis: HPV, FSHD and other new tests to come.
2/ Improving the performance of instrumentation to make it more accessible:
- Development of integrated systems, from sample preparation to reporting and interpretation of results,
- Automation of the instrumentation to enable its routine use.
-27%: Consolidation and reinforcement of the Sales, Support and Marketing teams:
- Expanded field coverage to meet the needs of the international market, mainly in the USA and Europe,
- Signing of structuring partnerships with third parties in order to diversify our skills and accelerate our programmes.
The remaining 25% is intended to cover current expenses, external charges and overall expenses not allocated to the various elements mentioned above, including the remuneration of managers.
It is specified that no conversion of a CB or exercise of a BSA may be made at a price lower than the nominal value of a share and that in the event that the price of Genomic Vision shares falls below the nominal value of a share of the Company for more than 15 trading days (i.e, 0.01 subject to approval by the extraordinary general meeting), the Investor may terminate the Issue Agreement (as defined below) and request the repayment in cash of the nominal value of the outstanding CBs without any penalty.
To support this growth, the Company plans to make strategic investments, recruit new talent and develop new commercial offerings.
The following tables on dilution have been updated to take into account the greater dilution resulting from the alteration in the terms of the BSA equity warrants and take into account the maximum total dilution that will result from the issuance and conversion of the OCABSAs, the exercise of the BSAs but also from the issuance and conversion of the OCA in case of payment of the commitment fee by delivery of the OCA.
Theoretical impact of the issue of the new shares on shareholders’ equity per share (based on the Company’s shareholders’ equity as at 31 December 2021, the number of shares comprising the Company’s share capital as at the date of this press release, i.e. 67,931,364 shares, and a share price of EUR 0.099, corresponding to the lowest volume weighted average price (“VWAP”) in the 10 trading days preceding 17 May 2022:
| (1) assuming full exercise of the share subscription warrants and “bons de souscription de parts de créateur d’entreprise” (Business Creator Share Warrants) issued and attributed by the Company, exercisable or not, giving the right to subscribe to 6,806,514 and 276,809 new shares respectively, i.e. a total number of shares making up the Company’s share capital of 75,014,687 on a fully diluted basis as of the date of this Prospectus. |
Theoretical impact of the issuance of the new shares on the shareholders’ equity per share (based on the Company’s shareholders’ equity as at 31 December 2021, and the number of shares comprising the Company’s share capital as at the date of this press release, i.e. 67,931. 0.01 corresponding to the nominal value of one share of the Company in the event of approval by the extraordinary general meeting of shareholders of 23 May 2022 of the reduction of the nominal value from 0.1 to 0.01 euro per share):
| (1) assuming the full exercise of the warrants issued and allocated by the Company, whether exercisable or not, giving respectively the right to subscribe to 6,806,514 and 276,809 new shares, i.e. a total number of shares making up the share capital of the Company of 75,014,687 on a fully diluted basis as at the date of this press release. |
Theoretical impact of the issue of the new shares on the investment of a shareholder holding 1% of the Company’s share capital as of the date of this press release (based on the number of shares comprising the Company’s share capital as of the date of this press release, i.e. 67,931,364 shares, and a share price of EUR 0.099, corresponding to the lowest VWAP of the 10 trading days preceding 17 May 2022):
| (1) assuming the full exercise of the warrants issued and allocated by the Company, whether or not they can be exercised, giving the right to subscribe for 6,806,514 and 276,809 new shares respectively, i.e. a total number of shares making up the Company’s capital of 75,014,687 on a fully diluted basis as at the date of this Prospectus. |
Theoretical impact of the issuance of new shares on the investment of a shareholder currently holding a 1% stake in the Company (based on the number of shares making up the Company’s share capital on the date of this press release, i.e. 67,931,364 shares, and a share price of 0.01 euros corresponding to the nominal value of a share in the Company if the Shareholders’ EGM of May 23, 2022 approves the reduction in the nominal value from 0.1 to 0.01 euros per share):
| (3) assuming full exercise of the share subscription warrants and “bons de souscription de parts de créateur d’entreprise” (Business Creator Share Warrants) issued and attributed by the Company, exercisable or not, giving the right to subscribe to 6,806,514 and 276,809 new shares respectively, i.e. a total number of shares making up the Company’s share capital of 75,014,687 on a fully diluted basis as of the date of this press release. |
Indicative schedule of the operation
| May 20, 2022 | The French stock market authority (the “AMF”) approves the prospectus, comprising the universal registration document filed on April 14, 2022, the addendum to the universal registration document of May 20, 2022, a Note d’Opération (securities note) and a summary, relating to the admission to trading on the regulated market of a maximum of 4,410,000,000 new shares liable to result from the conversion of the OCA convertible notes and the exercise of the attached BSA equity warrants on the theoretical basis of a share price equal to the nominal value of 0.01 euros. |
| May 23, 2022 | Convening of an EGM notably for the purpose of approving the reduction in the nominal value of a share in Company from 0.1 euros to 0.01 euros and the issuance of the 30,000,000 OCABSA convertible notes with equity warrants attached to Winance. |
| June 6/8, 2022 | Genomic Vision Executive Board meeting to decide on the issuance of the first tranche of OCABSA, subject to the EGM’s approval |
| June 7/9, 2022 | Winance subscribes to the first tranche of OCABSA convertible notes with equity warrants attached for 2,000,000 euros.Press release regarding the issuance of the first tranche of OCABSA. |
The Company’s working capital requirements for the next 12 months
At the date of this press release, the Company does not have sufficient net working capital to meet its current needs for the next 12 months.
As at 16 May 2022, the Company’s cash and cash equivalents amounted to €927k. Thus, as of the date of this press release and based on its envisaged development plan, the Company estimates that its available cash allows it to finance its activities until mid-June 2022, and that the additional cash requirement to continue its activities over the next 12 months amounts to €7.3 million. In order to meet its working capital requirements, the Company has therefore decided to set up a new financing facility with the Investor by signing on 11 April 2022 the Issuance Agreement, which provides for the issuance to Winance of the above-mentioned OCABSAs in several tranches of 92 million (the amount of each tranche may be increased by mutual agreement of the parties up to a maximum of €3.84 million on the basis of the Company’s share price), representing a maximum total bond issue of €28.8 million over a period of 60 months.
€28.8 million bond issue, over a period of 60 months. Provided that the conditions are met (including the fact that the stock market price is not lower than the nominal value, the approval of the issue of the OCABSA by the EGM, the absence of an event of default), the drawdown of the first 4 tranches would extend the Company’s financing horizon until mid-2023 with a financing representing 7, 7.58 million (if the Winance commitment fee is paid by delivery of OCAs and after deduction of various advisory and legal fees estimated at)
The Company has no other alternatives to cover its working capital requirements, which are no longer covered by the cash at its disposal beyond June 2022. If any of these conditions precedent, not all of which are in the Company’s control, are not met within the specified timeframe, the Company may not be able to realise its assets and liabilities and settle its debts in the normal course of business and the application of IFRS accounting rules and principles in a normal business context, particularly with regard to the valuation of assets and liabilities, may prove inappropriate. As a result, this situation creates significant going concern uncertainty. Thus, if the Company does not succeed in implementing the planned financing line with Winance, it would have to seek other sources of financing of the same type and, in the meantime, readjust its costs and, if necessary, temporarily halt the implementation of its development plan.
If the conditions for the completion of the Issuance Agreement allow the Company to draw down the first 4 tranches of the OCABSAs, it will be able to meet its cash requirements for the next 12 months.
The Company would like to invite all its shareholders to attend this Shareholders’ Meeting in order to express their opinion regarding the resolutions that will be tabled. In this respect, and given the difficulty reaching a sufficient quorum, the Company applied for and was granted on April 29, 2022 an order from the President of the Nanterre commercial court designating an ad hoc agent who will represent all shareholders who are neither present nor represented at the Meeting. This ad hoc agent will exercise the voting rights attached to the shares of absentee shareholders at the rate of two thirds of positive votes and one third of negative votes in order to render the ad hoc agent’s participation in deliberations “neutral” in terms of a qualified majority.
New shares resulting from the conversion of notes or the exercise of warrants
The new shares issued upon conversion of the OCAs (which will be delivered to the Investor as remuneration for its total commitment fee equal to EUR 2.1 million and which will have the same terms and conditions as the OCABSAs except for the fact that they will be subscribed at their nominal value of EUR 1 by offsetting the debt with the amount of the commitment fee, and that no BSAs will be attached to them) or of the OCABSAs or upon the exercise of the BSAs, will carry dividend rights. They will carry the same rights as those attached to the Company’s ordinary shares and will be admitted to trading on the Euronext regulated market in Paris under the same listing line (ISIN: FR0011799907).
The Company will maintain an updated summary of the outstanding convertible notes and share subscription warrants and the number of shares in circulation on its website (www.genomicvision.com).
The Investor does not intend to keep the shares issued within the framework of the financing line or to become a significant shareholder in the Company, but to sell them on the market as rapidly as possible.
The Company would like to draw the public’s attention to the risk factors indicated in section 3 and paragraph 20.1.2 of the universal registration document filed on April 14, 2022.
In addition to the risk factors set out in Section 3 of the Universal Registration Document and in Section 4 of the Amendment to the Universal Registration Document which updates Section 20.1.2 of the Company’s Universal Registration Document, the Company draws the public’s attention to the following risk factors relating to the issue of the OCABSAs:
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