A convertible bond and options for existing shareholders

Crossject announced the granting of free options (“BSA”) to existing shareholders as well as the issue of a convertible bond (€5.25m).

Existing shareholders will be granted one option for ten shares held, each option enabling them to purchase a share for €4.50 as of 10 April 2018 and until 30 June 2018.

The convertible bond (maturity 20 February 2020) does not bear interest and SNPE and Gemme Ventures, the company’s historic shareholders, will contribute €1.5m to the total subscription.

The subscription price will be 92% of the nominal value and the conversion price will be the lowest between €4.50 and a weighted average share price less 10% prior to the conversion.

The company intends to use the proceeds of the convertible bond issuance to finance its development plan, in particular regarding the work needed prior to regulatory filings for its NTEs.

The options could provide the group with another €3.9m in financing, should all shareholders exercise their rights (excluding treasury shares).

Of course, this would come with a dilution, with the creation of a total maximum number of new shares of 2.1m shares (1,128k from the convertible and 877k from the options), leading to a new total number of shares of 11.1m vs 8,958k or +23%.

At the same time, the cash position would increase by €9.2m (again if all options are exercised), enabling the group to finance the development phases before regulatory market approvals.

Even if these operations secure the short/mid-term financing of the company, they do imply a rather significant dilution.

The price to pay for the company’s products to reach the market…

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