Cellectis announces the drawdown of the second tranche of €15 million under the credit facility agreement entered with the European Investment Bank (EIB)
Cellectis, a clinical-stage biotechnology company, has announced the drawdown of the second tranche of €15 million under a credit facility agreement with the European Investment Bank. The company plans to use the proceeds towards the development of its pipeline of allogeneic CAR T-cell product candidates. As a condition to the disbursement, the company issued warrants to the EIB, allowing them to subscribe for one ordinary share of the company at a specific price. The total number of shares issuable upon exercise of the warrants represents circa 2% of the company’s outstanding share capital at their issuance date. The tranche will mature in six years and accrue interest at a rate of 7% per annum. The company also has the option to drawdown a third tranche of up to €5 million, subject to certain conditions.
The drawdown of the second tranche of €15 million by Cellectis under the agreement with the European Investment Bank signals a strategic move to bolster the company's financial position. This infusion is earmarked for the development of their allogeneic CAR T-cell product candidates, indicating a focused allocation of resources towards research and development. The maturity term of six years and the 7% annual interest rate, compounded and payable at maturity, is a critical aspect for investors to consider. This interest rate is relatively high, suggesting a risk premium associated with the investment. Investors should scrutinize the potential implications on the company's long-term financial health, given the cost of capital and the inherent risks of clinical-stage biotech investments.
The issuance of Tranche B Warrants as part of the financing deal is a noteworthy event for the biotechnology sector. With each warrant priced at €2.53, which is 99% of the volume-weighted average price, there is a slight discount for the EIB, potentially diluting current shareholders' value by approximately 2%. However, this dilution is counterbalanced by the capital influx aimed at advancing Cellectis' pipeline, which includes promising CAR T-cell therapies. The success of these therapies, such as UCART22, UCART20x22 and UCART123, could be transformative for the treatment of various cancers, underscoring the importance of this funding for the company's strategic growth and the potential long-term value creation for shareholders.
The legal framework governing the issuance of Tranche B Warrants, as per the French Commercial Code and the stipulations of the shareholders’ meeting resolutions, is central to ensuring the legitimacy of this transaction. The conditions set forth for the drawdown of the additional tranche, including the issuance of more warrants, should be evaluated for their legal soundness and potential impact on the company's governance structure. It is essential for stakeholders to understand the legal intricacies of such financial instruments and their implications on corporate control and future financing flexibility.
01/16/2024 - 04:30 PM
NEW YORK, Jan. 16, 2024 (GLOBE NEWSWIRE) -- Cellectis (Euronext Growth: ALCLS – NASDAQ: CLLS) (the “Company”), a clinical-stage biotechnology company using its pioneering gene-editing platform to develop life-saving cell and gene therapies, today announced that it has drawn down the second tranche of €15 million (“Tranche B”) under the credit facility agreement for up to €40 million entered into with the European Investment Bank (the “EIB) on December 28, 2022 (the "Finance Contract"). Tranche B is expected to be disbursed by the EIB by January 25, 2024. The Company plans to use the proceeds of Tranche B towards the development of its pipeline of allogeneic CAR T-cell product candidates: UCART22, UCART20x22, and UCART123.
As a condition to the disbursement of Tranche B the Company issued 1,460,053 warrants to the benefit of the EIB, in accordance with the terms of the 14th resolution of the shareholders’ meeting held on June 27, 2023 and articles L. 228-91 and seq. of the French Commercial Code (the “Tranche B Warrants”).
Each Tranche B Warrant allows the EIB to subscribe for one ordinary share of the Company, at a price of €2.53 , corresponding to 99% of the volume-weighted average price of the Company’s ordinary shares over the last 3 trading days preceding the decision of the board of directors of the Company to issue the Tranche B Warrants. The total number of shares issuable upon exercise of the Tranche B Warrants represents circa 2% of the Company’s outstanding share capital as at their issuance date.
Tranche B will mature six years from its disbursement date and will accrue interest at a rate of 7% per annum capitalized annually and payable at maturity.
The other terms of the Tranche B Warrants and prepayment events of Tranche B under the Finance Contract are as set forth in the Company’s press release of April 4, 2023 and Form 6-K filed with the U.S. Securities and Exchange Commission on such date.
The Finance Agreement allows the Company to drawdown a third tranche, of a maximum amount of €5 million , subject to certain conditions, including issuance of a specified number of additional warrants to the benefit of the EIB.
About Cellectis
Cautionary Statement www.sec.gov , as well as other known and unknown risks and uncertainties may adversely affect such forward-looking statements and cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
For further information on Cellectis, please contact:
Media contact: media@cellectis.com
Investor Relations contacts: investors@cellectis.com
Cellectis plans to use the proceeds towards the development of its pipeline of allogeneic CAR T-cell product candidates: UCART22, UCART20x22, and UCART123.
Each Tranche B Warrant allows the EIB to subscribe for one ordinary share of the Company, at a price of €2.53, corresponding to 99% of the volume-weighted average price of the Company’s ordinary shares over the last 3 trading days preceding the decision of the board of directors of the Company to issue the Tranche B Warrants.
The total number of shares issuable upon exercise of the Tranche B Warrants represents circa 2% of the Company’s outstanding share capital as at their issuance date.
Tranche B will mature six years from its disbursement date and will accrue interest at a rate of 7% per annum capitalized annually and payable at maturity.
The company can drawdown a third tranche, of a maximum amount of €5 million, subject to certain conditions, including issuance of a specified number of additional warrants to the benefit of the EIB.
