Company News: Curetis secures financing facility of up to EUR 20 million through the issuance of convertible notes

— Funding enables further acceleration of commercial expansion and R&D programs

— EUR 3.5 million of first tranche of EUR 5 million to be funded today

This announcement contains inside information within the meaning of Article 7(1) of the Market Abuse Regulation.

Curetis N.V. (the “Company” and, together with its subsidiaries, “Curetis“), a developer of next-level molecular diagnostic solutions, today announced that it has secured up to EUR 20 million in growth capital through the issuance of convertible notes by Curetis N.V. with share subscription warrants, to YA II PN, Ltd, an investment fund managed by Yorkville Advisors Global LP, a U.S.-based management firm (the “Investor” or “Yorkville”).

As of today, Curetis has drawn down EUR 3.5 million of the first tranche by issuing convertible notes and will thereby raise a net amount of EUR 3.22 million. Curetis intends to draw down the remainder of the first tranche (i.e. EUR 1.5 million) within 90 trading days, subject to certain conditions being met.

The access to this additional capital enables Curetis to execute on its commercial strategy outlined in Curetis’ 2018 half-year release and H1-2018 earnings call on August 14, 2018.

“We have evaluated a broad spectrum of different financing options. and Yorkville’s financing facility provides us with additional flexibility in our commercial execution and R&D efforts” said Oliver Schacht, CEO of Curetis. “The first part of the first tranche has been drawn down today.”

Under the terms of the agreement, Yorkville has committed to subscribe for up to 2,000 convertible notes of EUR 10,000 each, representing up to EUR 20 million in aggregate principal amount, over a period of 36 months from the date of the agreement. Share subscription warrants will be issued with each tranche of convertibles notes except for the first tranche of EUR 5 million.

Furthermore, Curetis and Yorkville have agreed that the number of warrants issued with subsequent tranches of convertible notes shall be equal to 25% of the aggregate principal amount of such convertible notes divided by the relevant warrant exercise price, as further specified in the appendix. Each warrant entitles the Investor to one share of the Company at the specified exercise price. Accordingly, if all warrants issued with a tranche of convertible notes are exercised, this results in aggregate proceeds of approximately 25% of the aggregate principal value of the related convertible notes.

The funding is structured in several tranches of convertible notes, with a first tranche of 500 convertible notes amounting, in aggregate, to a principal amount of EUR 5 million. The amount of the subsequent tranches will be equal to the lower of either EUR 5 million or 10 times the combined average daily value traded on Euronext in Amsterdam and Euronext in Brussels during the 10 days preceding the tranche request (up to a maximum of EUR 5 million). The funding of each tranche of convertible notes is subject to certain conditions summarized in the appendix.

The maximum net funding available to Curetis under the facility could reach up to approximately EUR 22.15 million, comprising EUR 18.4 million from convertible notes and approximately EUR 3.75 million from warrants.

The shares issued by the Company upon conversion of the first tranche of convertible notes subscribed for by Yorkville will be issued pursuant to the authorization granted at the Company’s Annual General Meeting held on June 21, 2018 (AGM), which designated the Company’s management board, subject to the approval of the Company’s supervisory board, as the corporate body authorized to issue shares and/or grant rights to subscribe for shares in relation to strategic capital raising(s) and to limit or exclude pre-emption rights relating thereto. The number of shares to be issued upon the conversion of all convertible notes of the first tranche shall not exceed 2.75 million shares. Any excess entitlement on the basis of the conversion ratio will be settled in cash unless the Company elects to settle such excess in shares. Although the Company’s management board has further authorizations to issue, without pre-emption rights, up to approximately 7 million further shares and/or rights to subscribe for shares pursuant to the authorizations granted by the AGM, the Company may use such authority for other equity raisings. The Company may thereafter be required to seek from its shareholders further authorizations to issue additional shares upon conversion of subsequent tranches of notes and exercise of warrants prior to the funding of such subsequent tranches, based upon certain coverage requirements specified in the agreement.

Certain key terms of the agreement, the convertible notes and the warrants are summarized in the appendix of this press release.