20-F: Cellectis Inks Warrant Subscription Agreement with European Investment Bank

Cellectis enters into a subscription agreement with the European Investment Bank (EIB) for the issuance of warrants, linked to tranches of a finance contract.

Summary

• Cellectis S.A. has entered into a subscription agreement with the European Investment Bank (EIB) for warrants.
• The agreement, dated March 30, 2023, involves Cellectis issuing warrants to the EIB, linked to the disbursement of tranches under a finance contract.
• The warrants will be issued in three tranches (A, B, and C), with the number of warrants in each tranche determined by formulas based on Cellectis' share price and the amount of cash injections and milestone payments received.
• The subscription price for the warrants is EUR 0.05 per warrant, payable by the EIB through the setting off of the receivable owned by the Subscriber against the Company under the Arrangement Fee related to such number of Warrants to be issued.
• The warrants are exercisable gradually upon the disbursement of each of the three separate Tranches as provided for under the Finance Contract and as from the occurrence of an Exercise Event and until the Expiration Date.
• The agreement includes conditions related to the approval of the transaction by Cellectis' corporate bodies, payment of the subscription price, and compliance with applicable laws and regulations.
• The warrants will be issued with full title guarantee, free from encumbrances and pre-emptive rights.
• The agreement is governed by French law, and disputes will be subject to the exclusive jurisdiction of the Paris Courts.

Sentiment

Score: 7

Explanation: The document is a standard financial agreement, so the sentiment is neutral to slightly positive. It provides Cellectis with access to funding, but also introduces potential dilution for shareholders.

Positives

• The agreement provides Cellectis with access to additional funding through the finance contract with the EIB.
• The warrant structure allows Cellectis to issue equity to the EIB at a price based on the company's share performance.
• The agreement includes provisions for anti-dilution protection for the EIB.

Negatives

• The issuance of warrants will dilute existing shareholders' equity.
• The agreement includes covenants that may restrict Cellectis' operations.
• The EIB has the right to terminate the agreement under certain circumstances.

Risks

• Cellectis' share price may decline, affecting the value of the warrants and potentially increasing dilution.
• The EIB may exercise its put option, requiring Cellectis to repurchase the warrants at a potentially unfavorable price.
• The agreement is subject to various conditions, and there is no guarantee that all tranches will be disbursed.

Future Outlook

The agreement outlines the terms for future warrant issuances linked to the disbursement of tranches under the finance contract, providing a framework for potential future funding.

Industry Context

This agreement is part of a broader trend of biotechnology companies securing funding through various financial instruments, including warrant subscriptions, to support research and development activities.

Comparison to Industry Standards

• Warrant subscription agreements are a relatively common financing tool in the biotechnology industry.
• Comparable companies such as Genmab and BioNTech have also utilized similar financing strategies to fund their research and development programs.
• The specific terms of the agreement, such as the warrant price and exercise conditions, are typical for these types of transactions.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of warrants.
• Employees may benefit from the company's ability to fund research and development activities.
• The agreement could lead to the development of new therapies for patients.

Next Steps

• Cellectis will need to fulfill the conditions for the disbursement of each tranche under the finance contract.
• The EIB will need to subscribe for the warrants upon the disbursement of each tranche.
• Cellectis will need to manage the potential dilution from the warrant issuances.

Key Dates

Keywords

warrants, European Investment Bank, subscription agreement, finance contract, Cellectis, EIB, equity