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Legal framework for the issuing of ORNAN bonds with BSA - 7th April 2020 - Delta Drone cross

Pursuant to a decision dated 7 April 2020, the Company’s Board of Directors approved, on principle, the issuance of tranche warrants (the “Tranche Warrants”) the exercise of which causes the issuance of bonds redeemable in cash and/or new shares (the “ORNAN”) with warrants to subscribe shares (the “BSA”) in favor of the YA II PN, LTD investment fund, subject to approval by the General Meeting held to vote on granting the Board of Directors authority to carry out such issuance.

Main characteristics of the Tranche Warrants, ORNAN and BSA

The main characteristics of the Tranche Warrants, ORNAN and BSA (the terms and conditions of which are available in detail on the Company’s website, under the Investors tab) are as follows:

Main characteristics of the Tranche Warrants

The Tranche Warrants require their bearer, at the Company’s request and subject to satisfying certain conditions*1 (a “Request”), to subscribe for ORNAN with attached BSA, i.e., one ORNAN for each Tranche Warrant exercised, at a subscription price set at 98% of the par value of an ORNAN. Each exercise date of a Tranche Warrant is a “Tranche Warrant Exercise Date.”

The Tranche Warrants shall become null and void 36 months following their issue date, or following the date on which Company shares are no longer traded on the Euronext Growth market or any other organized or regulated market.

The Tranche Warrants are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval. They shall not be the subject of a request for admission to trading on a financial market and therefore shall not be listed.

Main characteristics of the ORNAN

The ORNAN shall be issued in 10 Tranches of 100 ORNAN each. The total nominal amount of each Tranche shall therefore be equal to €1M, it being specified that the amount of each Tranche may be increased or decreased by mutual agreement between Yorkville Advisors and the Company.

The ORNAN have a par value of 10 000 euros each and are subscribed at 98% of par.

The ORNAN have a maturity of 12 months from their date of issuance. Upon expiration or in case of an event of default*2, the ORNAN that have not been converted shall be redeemed by the Company at par (plus accrued interest, if any). The ORNAN do not bear interest (except in the event of default).

At its discretion, the Investor may convert all or any of the ORNAN into new shares (a “Conversion”). Upon a Conversion, the Company shall have the right, at its sole discretion, to issue to the Investor: (1) the corresponding number of new shares (as described below), (2) a cash amount (as described below) or (3) a cash amount and new shares. Upon a Conversion, the Investor shall determine the number of ORNAN to be converted and the total amount of the principal and interest (if any) so converted (the “Conversion Amount”).

If the Company chooses to remit new shares to be issued, the number of shares to be remitted to the Investor on the Conversion date shall be equal to:

N = Vn / P

“N”: Number of new shares to be issued;

“Vn”: the Conversion Amount corresponding to the bond claim represented by the ORNAN (par value of one ORNAN, plus accrued interest, if any)

“P”: conversion price (the “Conversion Price”) corresponding to 93% of the Market Price (as defined below). The Conversion Price shall be determined (i) to two decimal points and rounded off to the nearest hundredth of a cent if the Conversion Price is greater than or equal to 0.10 euro, (ii) to three decimal points and rounded off to the nearest thousandth of a cent if the Conversion Price is between 0.01 euro and 0.10 euro, and (iii) to four decimal points and rounded off to the nearest ten-thousandth of a cent if the Conversion Price is less than 0.01 euro.

If the Company chooses to remit a cash amount, such amount shall be equal to:

  • still in circulation (based on the conversion price applicable on the date of the Request) and (ii) the number of shares to be issued upon exercise of the BSA to be issued, plus, as the case may be, the number of shares to be issued upon exercise of the BSA still in circulation.

M = (Vn / P) * C

“M”: cash amount payable to the ORNAN bearer;

“Vn”: bond claim that the ORNAN represents (par value of an ORNAN, plus accrued interest, if any);

“P”: 93% of the Market Price;

“C”: daily volume-weighted average price of the Company’s share on the Conversion Date;

The Market Price (“Market Price”) shall be the lowest daily volume-weighted average price of the Company’s share over the ten (10) consecutive trading days immediately preceding the applicable date (the “Pricing Period”). It is specified that when the Conversion Price or Strike Price are determined on the Reset Date, the Pricing Period does not include the days on which the Investor sold Company shares on the market.

The ORNAN are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval. They shall not be the subject of a request for admission to trading on a financial market and therefore shall not be listed.

Main characteristics of the BSA

Each of the ten Tranches of ORNAN shall be issued with a number of BSA equal to 75% of the par value of the ORNAN from the Tranche in question, divided by the Strike Price for the BSA (the “Strike Price”). The BSA shall immediately be detached from the ORNAN, and each BSA shall give its bearer the right to subscribe for one (1) new share in the Company, subject to possible adjustments.

The Strike Price of the BSA attached to the ORNAN of each Tranche shall be equal to 110% of the Market Price on the date of the Request in question. The Strike Price of the BSA in question shall be determined (i) to two decimal points and rounded off to the nearest hundredth of a cent if the Conversion Price is greater than or equal to 0.10 euro, (ii) to three decimal points and rounded off to the nearest thousandth of a cent if the Conversion Price is between 0.01 euro and 0.10 euro, and (iii) to four decimal points and rounded off to the nearest ten-thousandth of a cent if the Conversion Price is less than 0.01 euro.

On the anniversary date set for the 12th month following the respective issuance dates of the BSA (“Reset Date”), the BSA Strike Price shall be adjusted and shall be equal to the lowest of either (i) 110% of the Market Price on the trading day immediately preceding the Reset Date and (ii) the actual Strike Price before the Reset Date.

The BSA shall be exercisable in new shares for a period of 4 years from their respective issuance dates.

The BSA are freely transferable to any other fund managed by Yorkville Advisors but cannot be transferred to a third party without the Company’s prior approval. They shall not be the subject of a request for admission to trading on a financial market and therefore shall not be listed.

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