Crossject obtains a financing up to €12 million, in two tranches
Dijon, February 27, 2024 at 8:30am
Crossject obtains a financing up to €12
million, in two tranches,from an entity managed by
Heights Capital Management, in issued
bondsconvertible in new shares, with a conversion
premium of 35%1, or repayable (in
cash and/or stocks, according to the company’s options) over 36
months at a rate of
7%2.
CROSSJECT (ISIN: FR0011716265; Stock
symbol: ALCJ), a specialty pharma company developing
needle-free auto-injectors for emergency situations, , announces
today the issue, waiving preferential subscription rights and
reserved for a category of investors3 of 70 amortizable bonds
convertible into new stock with a nominal value of €100,000, for an
amount of €7 million following the 13th extraordinary resolution of
the Combined General Meeting of June 7, 2023 and the decision taken
on February 26, 2024 by a member of the Executive Board acting
within the sub-delegation granted by the Executive Board meeting on
February 23, 2024 with authorization by the Supervisory Board on
January 29, 2024 ("Issue").
"We are proud to have raised this new capital
from an entity managed by Heights Capital Management, Inc.
(“Heights”), an institutional investor specialized in financing
growing companies. It is a sign of confidence in our industrial and
market progress, particularly in North America4.
These funds are in addition to the current
funding by BARDA (for $6.7 million invoiced over 2023 out of a
maximum overall budget of $32 million), under contract
75A50122C00031, for the advanced development of its ZENEO-midazolam
autoinjector (proposed name ZEPIZURE®) through approval by the
United States Food and Drug Administration (FDA) for the treatment
of status epilepticus seizures. The contract also includes future
prospects for the supply of $60 million worth of ZEPIZURE®,
which will be delivered to the United States Government, once the
product has been granted Emergency Use Authorization by the
FDA.
The form taken by the financing granted by
Heights meets our primary objective of having solutions with cash
repayment over time and limited dilution.
This maximum financing of €12 million is in
addition to other non-dilutive financing recently secured real
estate sale and leaseback transaction for about €5 million,
pre-financing of the 2023 Research Tax Credit for €1.5 million out
of €3 million, etc.) and commercial revenues related to new or
existing partnerships.’
said Patrick Alexandre, CEO of
Crossject.CROSSJECT STOCK CODES
Crossject stocks have been listed on Euronext
Growth Paris since February 28th, 2014.
- ISIN:
FR0011716265
- Stock symbol:
ALCJ
- Reuters code:
ALCJ.PA
- Bloomberg code:
ALCJ.FP
- LEI:
969500W1VTFNL2D85A65
- Listing type:
continuous
- Indexes (stock
market): EnterNext© PEA-PME 150, Euronext Growth BPI France
Innovation, Euronext Growth Allshare
- Number of
securities outstanding: 36,763,256 on January 31st, 2024
STRUCTURE OF THE OPERATION
Funding from Heights may reach up to €12 million
in two tranches: The Initial Investment or
First Tranche of €7 million may be supplemented by
a Second Tranche of a maximum amount of €5 million
on Crossject’s initiative and subject to compliance with certain
conditions.
The issuance covered herein does not give rise to a Prospectus
submitted for AMF approval.
Characteristics specific to the First
Tranche
- Issuance, with
cancellation of the Preferential Subscription Right, to a category
of persons as defined by the General Meeting for the benefit of
Heights (the "Investor") of 70 Convertible Bonds
with a nominal value of 100,000 euros;
- Subscription by
the Investor of the 70 convertible bonds for 90%
of their nominal value, i.e. 6.3 million euros (90,000 euros per
bond).
- Payment and
delivery on February 28, 2024 subject to the satisfaction of usual
conditions
- The number of
new stocks that may be issued under the convertible
bonds is between 1,359,434 and 7,816,6665:
- 1,359,434 stocks
maximum, in the event of conversion of all 70 convertible
bonds by the Investor at the conversion price of 5.1492
euros, set at 135% of the initial reference price of 3.8142 euros
(which is subject to adjustment), and
- 2,383,420 stocks
maximum, if the Company opts for the amortization of the 70
convertible bonds in new stocks (to the current
floor price of 3.2796 euros within the Investor's holding limit of
9.99% of the Company's capital stock), and
- 7,816,666 stocks
maximum, if the Company opts for the amortization of the 70
convertible bonds in new stocks (to the current
floor price of €1 within the Investor's holding limit of 9.99% of
the Company's capital stock).
Characteristics specific to the Second
Tranche
Crossject has the right (and not the obligation)
to request the total or partial drawdown of the Second
Tranche for twelve (12) months from June 28, 2024 (i.e.
from the due date of the first repayment of Tranche 1), provided
the following conditions are met:
- A Crossject
General Meeting must have approved the issue of Tranche 2 of
convertible bonds;
- Crossject must
have received authorization from the US Food and Drug
Administration (FDA) to deliver the first units of ZEPIZURE ® to
the Strategic National Stockpile under the contract between
Crossject and BARDA;
-
the aggregate principal amount of the Second
Tranche issued shall not exceed 10% of the Crossject’s
market capitalization as of the date each of conditions (i) and
(ii) above are satisfied.
Characteristics common to the First and
Second Tranches
Maturity
Each tranche will mature after three (3) years
from issue date.
Amortization and main
features
For each tranche, the amortization schedule of
the convertible bonds is provided for at the rate
of seventeen (17) equal payments every two (2) months, from the 4th
month following the date of issue, payable according to the
company’s options:
- in cash for an
amount equal to 102% of the amount due,
- in new ordinary
stocks issued, the value of which is equal to 85% of the
Market Value of the stocks (corresponding to the
lowest daily Volume-Weighted Average Price for the stocks comprised
in the Market Price Observation Period in respect of such market
price relevant date, where “Market Price Observation Period” means,
in respect of any market price relevant date (a) (if such market
price relevant date is a trading day) the period of six (6)
consecutive trading days ending on (and including) such market
price relevant date or (b) (if such market price relevant date is
not Trading Day) the period of five (5) consecutive trading days
ending on (and including) the trading day immediately preceding
such market price relevant date) within the limit of the applicable
floor price6.
If Crossject decides to repay in shares and the
stock price of the instalment payment is inferior to the floor
price, Crossject will deliver a number of shares calculated on the
basis of the floor price and pay the difference in cash (calculated
on the basis of the stock price the day before the date of the
settlement amortization).
The share of amortized stock decided by
Crossject may not require the Investor to hold more than 9.99% of
Crossject's capital stock (including accrued interest paid in
stocks).
If the Company pays the last amortization
schedule installment in stocks, the Investor may ask for the
repayment of up to two amortization schedule installments to be
brought forward under certain conditions. Subject to the Company's
consent, he also has the right to request the deferral of payment
of an early amortization installment.
In the event of a customary default by the
Company or a change of control, the Investor has the right to
request early redemption of the convertible bonds7. The same right
is granted to the Investor if the resolution linked to the new
floor pice does not pass in an next Extraordinary Assembly (see
Infra).
Interest
The convertible bonds bear
interest at a rate of seven (7)% per annum.
Accrued interest will be paid at the same time
as amortization and payable according to the Company's options:
- cash,
- issuance of new
common stock, for the value equal to the stock issue price under
the applicable amortization schedule.
Conversion to stocks
The convertible bonds may be converted into new
common stock of the Company exclusively on the bonds holder’s
initiative at any time after issue.
The convertible
bonds' conversion price equals 135% of
the Market Value when each tranche is issued.
For the First Tranche, the
convertible bonds may be converted into new
ordinary stocks of the Company at an initial ratio of 19,420.4925
stocks per convertible bond, i.e.
a conversion price of 5.1492 euros per ordinary stock, which may be
adjusted in accordance with the terms and conditions of the
convertible bonds within the limit of the
applicable floor price. The conversion price of the
convertible bonds may be adjusted in the event of
the occurrence of certain events as details in the terms and
conditions of the convertible bonds.
Crossject will publish the number of new stocks
issued under the terms of the convertible bonds on
its website regularly.
Any new stocks issued on conversion of the
convertible bonds have immediate dividend rights.
They have the same rights as the company's existing common stocks
and will be listed on the Euronext Growth Paris market on the same
listing line (FR0011716265).
Admission to a stock
exchange:
There shall be no request for admission of the
convertible bonds to any financial market when
they are issued. The convertible bonds will only be transferable
subject to Crossject's agreement (except for the transfer to an
affiliated member of the Investor).
Use of proceeds
The aim of the proceeds is to enable Crossject
to ramp up industrial and commercial development of its ZENEO
technology.
DECLARATION ON WORKING
CAPITAL
Taking into account the net proceeds from the
issue of the convertible bonds described in this
press release, the option on the Second Tranche, other non-dilutive
financing planned (grants, repayable advances, etc.), ongoing
contracts and its available cash, the Company believes that its net
working capital is sufficient to meet its obligations over the next
12 months, in the event that all of these elements are realized
over the period.
The Company is also confident in its ability to
find, if needed, the necessary financing to continue its
development.
DISCLAIMER
This issuance will not give rise to a Prospectus
submitted for AMF approval.
IMPACT OF THE ISSUANCE ON STOCKHOLDERS
CURRENTLY HOLDING 1% OF CROSSJECT CAPITAL STOCK
For information purposes, the impact of the
capital increase on stockholders holding 1% of Crossject's capital
stock prior to conversion of the convertible bonds
and/or amortization of the latter in new stocks, depending on the
assumptions described below, would be as follows:
Stockholder investment in % |
First tranche |
First Tranche+ Second
Tranche |
UndilutedBasis |
DilutedBasis* |
UndilutedBasis |
DilutedBasis* |
Before issuance of new stocks |
1,0000% |
1,0000% |
1,0000% |
1,0000% |
Before issuance of new stocks – Case 1 |
0,9643% |
0,9654% |
0,9404% |
0,9421% |
Before issuance of new stocks – Case 2 |
0,9391% |
0,9409% |
0,9000% |
0,9028% |
Before issuance of new stocks – Case 3 |
0,8247% |
0,8292% |
0,7329% |
0,7390% |
* On January 31st 2024, there were dilutive instruments in
circulation that could theoretically give entitlement to a maximum
of 1,181,100 new stocks. |
Assumptions |
Details |
Common elements |
- Calculated on the basis of the number of stocks making up the
Company's capital stock on January 31st 2024, i.e. 36,763,256-
Conversion price of the Second Tranche of Convertible Bonds
identical to that of the First Tranche, i.e. 5.1492 euros - The
Investor never hold more than 9.99% of Crossject's capital stock-
there is no adjustment. |
CASE 1 |
In the event of conversion of all the bonds at the conversion price
of 5.1492 euros, then the issuance of 1,359,434 new shares for the
First Tranche and 971,024 for the Second Tranche.The Company
chooses to redeem all the bonds in cash. |
CASE 2 |
The Investor chooses not to convert any bonds into stocks.The
Company chooses to redeem all the bonds in stocks at the current
floor price of 3.2796 euros, then the issuance of 2,383,420 new
shares for the First Tranche and 1,702,443 for the Second
Tranche. |
CASE 3 |
The Investor chooses not to convert any bonds into stocks.The
Company chooses to redeem all the bonds in stocks at the new floor
price of 1 euro, then the issuance of 7,816,666 new shares for the
First Tranche and 5,583,333 for the Second Tranche. |
RISK FACTORS
Risks related to financing obtained in
the form of convertible bonds
Crossject has set up a financing arrangement
with convertible bonds purchased by Heights and, once it has
received the stocks resulting from the conversion or exercise of
these instruments, does not intend to remain a stockholder in the
company.
Stocks resulting from the conversion or exercise
of the securities mentioned above will generally be sold on the
market very quickly, which can create strong downward pressure on
the stock price.
Stockholders may suffer a loss of their invested
capital due to a significant decrease in the company's stock value
and significant dilution due to the large number of securities
issued to Heights.
Investors are advised to exercise extreme
caution before deciding to invest in a listed company's securities
that carry out such dilutive financing transactions, particularly
when carried out successively.
Crossject would like to point out that this is
not its first financing transaction with a dilutive impact.
In addition, the financing agreement concluded
with the Investor includes repayment clauses:(1)
In the event of a default or change of control (cf. above)(2)
Crossject has undertaken to submit a resolution to a vote at its
next General Meeting (which must be held no later than June 31st
2024, or, failing that, September 30th 2024) in order to remove the
floor price to 1 euro.Failing this, the Investor shall be entitled
to require Crossject to repurchase all or part of the stocks held
by it (“Investor Put Option”) at a price equal to
the greater of the following amounts: (i) 102% of the principal
amount outstanding and (ii) 120% of parity.This put option will be
exercisable within 30 days from the date of the announcement of the
votes of the second general meeting.
General risks
Investors are invited to take into consideration the risk
factors described in the 2022 annual report (and the entirety of
this report) and in the 2023 half-yearly report (available on the
Company's website: www.crossject.com).
Crossject
(ISIN: FR0011716265; Stock symbol: ALCJ (Euronext:LEI;
www.crossject.com) is developing and will soon market a portfolio
of drugs for use in emergency situations: epilepsy, overdose,
allergic shock, severe migraine, and asthma attack. Thanks to its
patented needle-free auto-injector, Crossject aims to become the
world leader in self-administered emergency drugs. The company has
been listed on the Euronext Growth Paris market since 2014, and
receives financing, including from the American BARDA (Biomedical
Advanced Research and Development Authority) and
Bpifrance.
1 Based on the lowest volume-weighted average
daily price of the Company's stocks over the last five (5) trading
days prior the issuance of each tranche of bonds.2 The closing of
the transaction will take place on Wednesday, February 28, 2024,
subject to the satisfaction of usual conditions.3 Natural or legal
persons (including companies), investment firms, trusts, investment
funds or other investment vehicles of any kind, governed by French
or foreign law, that invest or have invested on a regular basis in
the pharmaceutical, biotechnology, medical or innovative
technologies sector4 See the press release from 6 February, 20245
cf. chapter “Impact of the issuance on stockholders currently
holding 1% of crossject capital stock”6 Minimum price equal to
3.2796 euros, pursuant to the delegation granted by the 13th
extraordinary resolution of the Combined General Meeting of June
7th 2023. The Company has undertaken to submit a resolution to its
next General Meeting of Stockholders to amend the price limit for
the issue of new stocks in connection with the amortization of the
convertible bonds to one (1) euro per stock,7At an amount equal to
the greater of (i) 120% of the outstanding principal amount of the
convertible bonds together with accrued but unpaid interest and
(ii) the greater of (A) the product of (x) the Market Price on the
date and (y) such number of shares per bond as would have been
required to be issued and delivered in respect of such bond had the
conversion right been exercised in respect thereof and (B) the
product of (x) the outstanding principal amount of each bond and
(y) Parity (fraction having as numerator the Market Price on this
date and for denominator 85% of the Market Price on the date of the
last instalment payment), it being specified that in case of change
of control, the company may return new shares.
- Crossject - PR Heights financing - ENG
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