On January 31, 2023 AB Science SA (Euronext – FR0010557264 – AB) reported that it has received payment of €6.0 million as the second tranche of a €15 million loan from the European Investment Bank (EIB) (Press release, AB Science, JAN 31, 2023, View Source [SID1234626658]).
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As previously announced [1], the agreement signed with the EIB provides a financing in two tranches of EUR 6.0 million and a third tranche of EUR 3.0 million, each subject to the fulfillment of certain conditions precedent, which have been satisfied for the first two tranches. Each tranche is accompanied by the issue of warrants, the number of which is calculated in relation to a reference price of 14 euros according to the following formula : Number of warrants = Amount of the tranche / (14 x m) with m = 3.7 for tranche 2. AB Science has already announced the drawdown of the first tranche for EUR 6.0 million.
The second tranche, also of EUR 6.0 million, has a maturity of five years and is therefore repayable in January2028. It carries a capitalized annual interest rate of 7.0% and the issuance of 115,830 warrants, each giving the right to subscribe to one ordinary share of AB Science at 14.0 euros for 15 years. These warrants represent 0.22% of the current capital of the Company (if they were to be exercised in their entirety).
The EIB also has a put option at intrinsic value (i.e. the difference between the stock market price and the exercise price) allowing it to require the Company to repurchase all or part of the warrants then exercisable but not yet exercised, under certain circumstances (for example in the event of a change of control or at the reimbursement date of the first tranche). In addition, the Company has a right of first refusal to redeem any warrants offered for sale to a third party, subject to certain exceptions.
On the basis of 115,830 new shares of the Company that could be issued upon exercise of all of these warrants, the Company could potentially receive gross proceeds amounting to 1,621,620 euros. There is no guarantee that the EIB will exercise all or part of the warrants or that the Company will receive any proceeds from the exercise of these warrants.