UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of May 2024
Commission
File Number 001-40996
MDXHEALTH
SA
(Translation
of registrant’s name into English)
CAP
Business Center
Zone
Industrielle des Hauts-Sarts
4040
Herstal, Belgium
+32
4 257 70 21
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
MDXHEALTH
SA
MDxHealth
SA (the “Company”) hereby furnishes the attached documents in connection with its Ordinary and Extraordinary General Shareholders’
Meetings to be held on Thursday, May 30, 2024 at 3:00 p.m., Belgian time, at the offices of the notary public Stijn Raes, at Kortrijksesteenweg
1147, 9051 Ghent, Belgium, or at such other place as will be indicated at that place at that time.
The
information in the attached Exhibits 99.1-99.12 is being furnished and shall not be deemed “filed” for the purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that
Section, nor shall they be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended,
or the Exchange Act, except as otherwise set forth herein or as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
| |
MDXHEALTH
SA |
| |
|
|
| Date:
May 16, 2024 |
By: |
/s/
Michael McGarrity |
| |
|
Name: |
Michael
McGarrity |
| |
|
Title: |
Chief
Executive Officer |
2
Exhibit 99.1
Unofficial English translation – For informational
purposes only
MDxHealth SA
Limited Liability Company
(société anonyme)
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal, Belgium
VAT BE 0479.292.440 (RLP Liège, division Liège)
INVITATION
ORDINARY and
extraordinary GENERAL MEETINGS
to be held on Thursday, 30 May 2024, at 3:00 p.m.
The holders of securities issued by MDxHealth
SA (the “Company”) are invited to the ordinary general shareholders’ meeting of the Company. After the agenda
of the ordinary general shareholders’ meeting has been treated, the meeting will be shortly suspended in order to be continued as
an extraordinary general shareholders’ meeting before a notary public.
GENERAL INFORMATION
Date, hour and venue: The ordinary and
extraordinary general shareholders’ meetings will be held on Thursday, 30 May 2024 at 3:00 p.m. at the offices of the notary public
Stijn Raes, at Kortrijksesteenweg 1147, 9051 Ghent, Belgium, or at such other place as will be indicated at that place at that time. There
is no attendance quorum requirement for the ordinary general shareholders’ meeting. There is, however, an attendance quorum requirement
for the items on the agenda of the extraordinary general shareholders’ meeting (see also below under “—Extraordinary
general meeting”). If the attendance quorum for the items on the agenda of the extraordinary general shareholders’ meeting
were not to be reached, a second extraordinary general shareholders’ meeting will be held for these items on Thursday, 20 June 2024,
unless, as the case may be, decided otherwise on behalf of the board of directors.
Opening of the doors: In order to facilitate
the keeping of the attendance list on the day of the ordinary and extraordinary general shareholders’ meetings, holders of securities
and their representatives are invited to register as of 2:15 p.m.
ORDINARY GENERAL MEETING
Agenda and proposed resolutions: The agenda
and proposed resolutions of the ordinary general shareholders’ meeting of the Company which, as the case may be, can be amended
at the meeting on behalf of the board of directors, are as follows:
| 1. | Report on the annual statutory financial statements and on the consolidated financial statements |
Submission of, and discussion on, (a)
the combined annual report of the board of directors on the consolidated and (non-consolidated) statutory financial statements of the
Company for the financial year ended on 31 December 2023, (b) the report of the statutory auditor on the (non-consolidated) statutory
financial statements of the Company for the financial year ended on 31 December 2023, and (c) the report of the statutory auditor on the
consolidated financial statements of the Company for the financial year ended on 31 December 2023.
| 2. | Approval of the annual (non-consolidated) statutory financial statements |
Submission of, discussion on, and approval
of the annual (non-consolidated) statutory financial statements for the financial year ended on 31 December 2023, and approval of the
allocation of the result as proposed by the board of directors.
Proposed resolution: The general
shareholders’ meeting resolves to approve the annual (non-consolidated) statutory financial statements of the Company for the financial
year ended on 31 December 2023 and to approve the allocation of the annual result as proposed by the board of directors.
Unofficial English translation – For informational
purposes only
| 3. | Consolidated financial statements |
Submission of, and discussion on, the
consolidated financial statements of the Company for the financial year ended on 31 December 2023.
| 4. | Discharge from liability of the directors |
Discharge from liability of the directors
for the exercise of their mandates during the financial year ended on 31 December 2023.
Proposed resolution: The general
shareholders’ meeting resolves to grant discharge from liability to each of the directors who was in office during the financial
year ended on 31 December 2023, for the performance of its, his or her mandate during that financial year.
| 5. | Discharge from liability of the statutory auditor |
Discharge from liability of the statutory
auditor for the exercise of its mandate during the financial year ended on 31 December 2023.
Proposed resolution: The general
shareholders’ meeting resolves to grant discharge from liability to the statutory auditor which was in office during the financial
year ended on 31 December 2023, for the performance of its mandate during that financial year.
| 6. | Re-appointment of directors |
The board of directors recommends that
(a) Ahok BV, represented by Koen Hoffman as permanent representative, and (b) Qaly-Co BV, represented by Lieve Verplancke as permanent
representative, be re-appointed as directors of the Company, each for a term of two years.
Proposed resolutions:
| (a) | The general shareholders’ meeting resolves to re-appoint Ahok BV, represented by Koen Hoffman as
permanent representative, as director of the Company for a term of two years, up to and including the closing of the ordinary general
shareholders’ meeting to be held in 2026 which will have decided upon the financial statements for the financial year ended on 31
December 2025. The mandate of the director shall be remunerated, which remuneration shall be as decided by the general shareholders’
meeting from time to time. |
| (b) | The general shareholders’ meeting resolves to re-appoint Qaly-Co BV, represented by Lieve Verplancke
as permanent representative, as director of the Company for a term of two years, up to and including the closing of the ordinary general
shareholders’ meeting to be held in 2026 which will have decided upon the financial statements for the financial year ended on 31
December 2025. The mandate of the director shall be remunerated, which remuneration shall be as decided by the general shareholders’
meeting from time to time. |
Note: If the proposed resolutions
set out in point 6 are approved by the general shareholders’ meeting, the Company’s board of directors will be composed of
(1) Michael K. McGarrity, chief executive officer (CEO), executive director and managing director (until 2026), (2) Ahok BV, represented
by Koen Hoffman, director and chair of the board of directors (until 2026), (3) Hilde Windels BV, represented by Hilde Windels, director
(until 2025), (4) Qaly-Co BV, represented by Lieve Verplancke, director (until 2026), (5) Donnie M. Hardison Jr., director (until 2025),
(6) Regine Slagmulder BV, represented by Regine Slagmulder, director (until 2025), and (7) Eric Bednarski, director (until 2025).
Unofficial English translation – For informational
purposes only
| 7. | Remuneration of directors |
Taking into account the recommendation
of the Compensation Committee of the board of directors, the board of directors proposes that the remuneration of the members of the board
of directors be amended as set out in the proposed resolution.
Proposed resolution: The general
shareholders’ meeting resolves that the remuneration of the members of the board of directors of the Company shall be as follows:
| (a) | The mandate of the directors of the Company shall be remunerated as follows: |
| (i) | Each director shall be entitled to a maximum annual fixed remuneration of USD 40,000.00 (ca. EUR 37,120.00). |
| (ii) | The chairperson of the board of directors shall be entitled to an additional maximum annual fixed remuneration
of USD 64,400.00 (ca. EUR 59,762.00). |
| (iii) | The chairperson of the Audit Committee shall be entitled to an additional maximum annual fixed remuneration
of USD 19,000.00 (ca. EUR 17,632.00), and the other members of the Audit Committee (other than the chairperson of this committee)
shall be entitled to an additional maximum annual fixed remuneration of USD 9,500 (ca. EUR 8,816.00). |
| (iv) | The chairperson of the Corporate Governance and Nominating Committee shall be entitled to an additional
maximum annual fixed remuneration of USD 10,000.00 (ca. EUR 9,280.00), and the other members of the Corporate Governance and
Nominating Committee (other than the chairperson of this committee) shall be entitled to an additional maximum annual fixed remuneration
of USD 5,000.00 (ca. EUR 4,640.00). |
| (v) | The chairperson of the Compensation Committee shall be entitled to an additional maximum annual fixed
remuneration of USD 13,500.00 (ca. EUR 12,528.00), and the other members of the Compensation Committee (other than the chairperson
of this committee) shall be entitled to an additional maximum annual fixed remuneration of USD 6,800.00 (ca. EUR 6,310.00). |
| (vi) | The remuneration set out in paragraphs (ii), (iii), (iv) and (v) shall be in addition to the remuneration
set out in paragraph (i) and can be combined, depending on whether the eligibility criteria set out in these paragraphs have been met.
The remuneration can be reduced pro rata temporis depending on the duration of the mandate, chairpersonship or membership of a
director during a given year. All amounts are exclusive of VAT and similar charges. |
| (b) | Notwithstanding the foregoing, directors whom, in accordance with the rules and regulations of U.S. law
and/or Nasdaq can be, or have been, qualified as independent directors, shall each be entitled (i) to receive, on 15 June 2024, a one-time
grant of share options for 30,000 shares of the Company, and (ii) each year thereafter, commencing with the ordinary general shareholders’
meeting to be held in 2025 which will have decided upon the financial statements for the financial year ended on 31 December 2024, to
receive share options for a maximum of 10,000 shares of the Company. |
| (c) | The rules set out in paragraph (a) shall apply as from 1 July 2024, whereby the remuneration for the period
from 1 July 2024 until 31 December 2024 shall be 50% of the remuneration referred to in paragraph (a). |
For the sake of completeness, the above
remuneration of the directors replaces, as from 1 July 2024, all other decisions regarding remuneration of directors approved in the past
by the general shareholders’ meeting, including the remuneration policy approved by the ordinary general shareholders’ meeting
held on 27 May 2021.
Unofficial English translation – For informational
purposes only
No attendance quorum: There is no attendance
quorum requirement for the deliberation and voting on the respective items referred to in the aforementioned agenda of the ordinary general
shareholders’ meeting.
Voting and majority: Subject to applicable
legal provisions, each share shall have one vote. In accordance with applicable law, the proposed resolutions referred to in the aforementioned
agenda of the ordinary general shareholders’ meeting shall be passed if they are approved by a simple majority of the votes validly
cast by the shareholders. Pursuant to article 7:135 of the Belgian Companies and Associations Code, the holders of subscription rights
have the right to participate to the ordinary general shareholders’ meeting, but only with an advisory vote.
extraordinary
GENERAL MEETING
Agenda and proposed resolutions: The agenda
and proposed resolutions of the extraordinary general shareholders’ meeting of the Company which, as the case may be, can be amended
at the meeting on behalf of the board of directors, are as follows:
| 1. | Submission of reports - 2024 Share Option Plan |
Submission of and discussion on:
| (a) | the report of the board of directors of the Company, prepared in accordance with articles 7:180 and 7:191
of the Belgian Companies and Associations Code, in relation to the proposal to issue 2,000,000 new subscription rights for shares of the
Company (the “2024 Share Options”), pursuant to a share option plan named “the 2024 Share Option Plan”,
and to dis-apply, in the interest of the Company, the preferential subscription right of the existing shareholders of the Company and,
insofar as required, of the holders of outstanding subscription rights (share options) of the Company, for the benefit of the members
of the personnel of the Company and its subsidiaries from time to time, within the meaning of article 1:27 of the Belgian Companies and
Associations Code (the “Selected Participant”); and |
| (b) | the report of the statutory auditor of the Company, prepared in accordance with articles 7:180 and 7:191
of the Belgian Companies and Associations Code, in relation to the proposal to issue 2,000,000 2024 Share Options, and to dis-apply, in
the interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar as required,
of the holders of outstanding subscription rights (share options) of the Company, to the benefit of the Selected Participants. |
| 2. | Proposal to issue 2,000,000 2024 Share Options |
Proposed resolution: The general
shareholders’ meeting resolves to approve the issuance of 2,000,000 2024 Share Options, pursuant to a share option plan named the
“2024 Share Option Plan”, and to dis-apply, in the interest of the Company, the preferential subscription right of the existing
shareholders of the Company and, insofar as required, of the holders of outstanding subscription rights (share options) of the Company,
for the benefit of Selected Participant. In view thereof, the general shareholders’ meeting resolves as follows:
| (a) | Terms and conditions of the 2024 Share Options: The terms and conditions of the 2024 Share Options
(including, but not limited to, the exercise price of the 2024 Share Options) shall be as set out in the annex to the report of the board
of directors referred to in item 1.(a) of the agenda (for the purpose of this resolution, the “Plan”), a copy of which
shall remain attached to the minutes recording the present resolution. The 2024 Share Options have a term of ten years as from their issue
date. |
| (b) | Underlying shares: Each 2024 Share Option shall entitle the holder thereof to subscribe for one
new share to be issued by the Company. The new shares to be issued at the occasion of the exercise of the 2024 Share Options shall have
the same rights and benefits as, and rank pari passu in all respects, including as to entitlements to dividends and other distributions,
with the existing and outstanding shares of the Company at the moment of their issuance, and will be entitled to dividends and other distributions
in respect of which the relevant record date or due date falls on or after the date of issue of the new shares. |
Unofficial English translation – For informational
purposes only
| (c) | Dis-application of the preferential subscription right for the benefit of the Selected Participants:
The general shareholders’ meeting resolves, in accordance with article 7:191 of the Belgian Companies and Associations Code, to
dis-apply, in the interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar
as required, of the holders of outstanding subscription rights (share options) of the Company, for the benefit of the Selected Participants,
and to approve the possibility for the Company to grant the 2024 Share Options to the Selected Participants, as further explained in the
report of the board of directors referred to in item 1.(a) of the agenda and the terms and conditions of the Plan. |
| (d) | Confirmation of the subscription of 2024 Share Options by the Company: The general shareholders’
meeting resolves to approve and confirm that the Company will be able to subscribe for the 2024 Share Options, with a view to creating
a pool of outstanding 2024 Share Options available for further grants to Selected Participants. The Company may not, however, exercise
the 2024 Share Options for its own account. |
| (e) | Conditional capital increase and issue of new shares: The general shareholders’ meeting resolves,
subject to, and to the extent of the exercise of the 2024 Share Options, to increase the Company’s share capital and to issue the
relevant number of new shares issuable upon the exercise of the 2024 Share Options. Subject to, and in accordance with, the provisions
of the Plan, upon exercise of the 2024 Share Options and issue of new shares, the aggregate amount of the exercise price of the 2024 Share
Options will be allocated to (as the case may be, following conversion into the Company’s share capital currency, on the basis of
the relevant USD/EUR exchange ratio as shall be published by the European Central Bank, as provided for in section 5.2 of the Plan) the
share capital of the Company. To the extent that the amount of the exercise price of the 2024 Share Options, per share to be issued upon
exercise of the 2024 Share Options, exceeds the fractional value of the then existing shares of the Company existing immediately prior
to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon exercise of the 2024 Share Options,
equal to such fractional value shall be booked as share capital, whereby the balance shall be booked as issue premium. Following the capital
increase and issuance of new shares, each new and existing share shall represent the same fraction of the share capital of the Company. |
| (f) | Issue premium: Any issue premium that will be booked in connection with the 2024 Share Options
shall be accounted for on a non-distributable account on the liabilities side of the Company’s balance sheet under its net equity,
and the account on which the issue premium will be booked shall, like the share capital, serve as a guarantee for third parties and can
only be reduced on the basis of a lawful resolution of the general shareholders’ meeting passed in the manner required for an amendments
to the Company’s articles of association. |
| (g) | Powers of attorney: The board of directors is authorised to implement and execute the resolutions
passed by the general shareholders’ meeting in connection with the 2024 Share Options, and to take all steps and carry out all formalities
that shall be required by virtue of the Plan, the Company’s articles of association and applicable law in order to issue or transfer
the shares upon exercise of the 2024 Share Options. Furthermore, each of the Company’s directors, Joe Sollee and Ron Kalfus, each
such person acting individually and with possibility of sub-delegation and the power of subrogation, shall have the power, upon exercise
of the 2024 Share Options, (i) to proceed with the recording of (A) the capital increase and issue of new shares resulting from such exercise,
(B) the allocation of the share capital and (as applicable) the issue premium, and (C) the amendment of the Company’s articles of
association in order to reflect the new share capital and number of outstanding shares following the exercise of the 2024 Share Options,
(ii) to sign and deliver, on behalf of the Company, the relevant Euroclear, Computershare, Nasdaq, bank and/or other documentation, the
share register and all other necessary documents in connection with the issuance and delivery of the shares to the Selected Participants
concerned and the admission to listing and trading of such shares, and (iii) to do whatever may be necessary or useful (including but
not limited to the preparation and execution of all documents and forms) for the admission of the shares issued upon the exercise of the
2024 Share Options to trading on Nasdaq (or such other markets on which the Company’s shares will be trading at that time). |
Unofficial English translation – For informational
purposes only
| 3. | Submission of reports – Exact Sciences Warrants |
Submission of and discussion on:
| (a) | the report of the board of directors of the Company, prepared in accordance with articles 7:180, 7:191
and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to issue, for the benefit of Genomic Health, Inc.
(a subsidiary of Exact Sciences Corporation referred to herein as “Exact Sciences”) 1,000,000 new subscription rights
for shares of the Company (the “Exact Sciences Warrants”), and to dis-apply, in the interest of the Company, the preferential
subscription right of the Company’s existing shareholders and, insofar as required, of the holders of subscription rights (share
options) of the Company, for the benefit of Exact Sciences; and |
| (b) | the report of the Company’s statutory auditor, prepared in accordance with articles 7:180, 7:191
and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to issue for the benefit of Exact Sciences 1,000,000
Exact Sciences Warrants, and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s
existing shareholders and, insofar as required, of the holders of subscription rights (share options) of the Company, for the benefit
of Exact Sciences. |
| 4. | Proposal to issue 1,000,000 Exact Sciences Warrants |
Proposed resolution: The
general shareholders’ meeting resolves to approve the issuance of 1,000,000 new subscription rights for shares of the Company, called
the “Exact Sciences Warrants”, and to dis-apply, in the interest of the Company, the preferential subscription right of the
Company’s existing shareholders and, insofar as required, of the holders of outstanding subscription rights (share options) of the
Company, for the benefit of Exact Sciences. To this end, the general shareholders’ meeting resolves as follows:
| (a) | Terms and conditions of the subscription rights: The terms and conditions of the Exact Sciences
Warrants will be in accordance with Annex A of the report of the board of directors referred to in item 3.(a) of the agenda (for the purposes
of this resolution, the “Exact Sciences Warrants Terms and Conditions”), a copy of which will remain attached to the
minutes recording the present resolution. The main terms and conditions of the Exact Sciences Warrants can, for information purposes,
be summarised as follows: |
| (i) | Right to subscribe for one ordinary share: Each Exact Sciences Warrant entitles the holder to subscribe
for one (1) ordinary share of the Company to be issued by the Company. |
| (ii) | Exercise price: The exercise price of the Exact Sciences Warrants (i.e.,
the price to be paid in cash to subscribe for one new share in the Company when an Exact Sciences Warrant is exercised) will be
USD 5.265. The exercise price is subject to potential customary downward adjustments in the case of certain dilutive actions of the
Company. |
| (iii) | Term: The Exact Sciences Warrants will have a term starting as from their issuance and ending on
(and including) August 22, 2028. |
| (iv) | Exercisability: The exercise of the Exact Sciences Warrants will be subject to the terms and conditions
contained in the Exact Sciences Warrants Terms and Conditions. The Exact Sciences Warrants may be exercised as from their issuance and
until the end of their term, provided that a number of Exact Sciences Warrants with an aggregate exercise price of at least USD 250,000
are exercised by the holder thereof. |
| (v) | Transferability: Except if the Company were to explicitly allow a transfer of the Exact Sciences
Warrants, the Exact Sciences Warrants cannot be transferred by the holder. Furthermore, the Exact Sciences Warrants will not be admitted
to listing or trading. |
Unofficial English translation – For informational
purposes only
| (b) | Underlying shares: Each Exact Sciences Warrant will entitle its holder to subscribe for one new
share to be issued by the Company. The new shares to be issued upon exercise of the Exact Sciences Warrants shall have the same rights
and benefits as, and rank pari passu in all respects including as to entitlement to dividends and other distributions, with the
existing and outstanding shares of the Company at the moment of their issuance and will be entitled to dividends and other distributions
in respect of which the relevant record date or due date falls on or after the date of their issuance. |
| (c) | Dis-application of the preferential subscription right for the benefit of Exact Sciences: The general
shareholders’ meeting resolves, in accordance with articles 7:191 and 7:193 of the Belgian Companies and Associations Code, to dis-apply,
in the interest of the Company, the preferential subscription right of existing shareholders of the Company and, insofar as required,
of the holders of subscription rights (share options) of the Company, for the benefit of Exact Sciences, as explained in the report of
the board of directors referred to in item 3.(a) of the agenda. |
| (d) | Conditional capital increase and issue of new shares: The general shareholders’ meeting resolves,
subject to and in the case of the exercise of the Exact Sciences Warrants, to increase the share capital of the Company and to issue the
appropriate number of new shares that may be issued upon exercise of the Exact Sciences Warrants. Subject to, and in accordance with,
the respective provisions of the Exact Sciences Warrants Terms and Conditions, upon exercise of the Exact Sciences Warrants and the issuance
of new shares, the aggregate amount of the exercise price of the Exact Sciences Warrants will be
allocated to (as the case may be, following conversion into the Company’s share capital currency, on the basis of the relevant USD/EUR
exchange ratio as shall be published by the European Central Bank, as provided for in section 5.4 of the Exact Sciences Warrants Terms
and Conditions) the share capital of the Company. To the extent that the amount of the exercise price of the Exact Sciences Warrants,
per share to be issued upon exercise of the Exact Sciences Warrants, exceeds the fractional value of the then existing shares of the Company
existing immediately prior to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon exercise
of the Exact Sciences Warrants, equal to such fractional value shall be booked as share capital, whereby the balance shall be booked as
issue premium. Following the capital increase and issuance of new shares, each new and existing share shall represent the same fraction
of the share capital of the Company. |
| (e) | Issue premium: Any issue premium that will be booked in connection with the Exact Sciences Warrants
(whether upon exercise of the Exact Sciences Warrants, or otherwise) will be accounted for on a non-distributable account on the liabilities
side of the Company’s balance sheet under its net equity, and the account on which the issue premium will be booked shall, like
the share capital, serve as a guarantee for third parties and can only be reduced on the basis of a lawful resolution of the general shareholders’
meeting passed in the manner required for an amendments to the Company’s articles of association. |
| (f) | Powers of attorney: The board of directors is authorised to implement and execute the resolutions
adopted by the general shareholders’ meeting in connection with the Exact Sciences Warrants, and to take all measures and carry
out all formalities that will be required pursuant to the Exact Sciences Warrants Terms and Conditions, the Company’s articles of
association and all applicable laws in order to issue or transfer the shares upon exercise of the Exact Sciences Warrants. In addition,
each director of the Company, Joe Sollee and Ron Kalfus, each such person acting individually and with the possibility of sub-delegation
and power of subrogation, shall have the power, upon exercise of the Exact Sciences Warrants, (i) to proceed with the recording of (A)
the capital increase and the issue of new shares resulting from such exercise, (B) the allocation as share capital and (if applicable)
as issue premium, and (C) the amendment of the Company’s articles of association to reflect the new share capital and number of
shares outstanding following the exercise of the Exact Sciences Warrants (ii) to sign and deliver, on behalf of the Company, the relevant
Euroclear, Computershare, Nasdaq and/or bank documentation, the share register and all other necessary documents in connection with the
issuance and delivery of the shares to the beneficiary and the admission to listing and trading of such shares, and (iii) to do whatever
may be necessary or useful (including, but not limited to, the preparation and execution of all documents and forms) for the admission
of the shares issued upon exercise of the Exact Sciences Warrants to trading on Nasdaq (or any other market on which the Company’s
shares will then be traded). |
Unofficial English translation – For informational
purposes only
| 5. | Submission of reports – OrbiMed Warrants |
Submission of and discussion on:
| (a) | the report of the board of directors of the Company, prepared in accordance with articles 7:180, 7:191
and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to issue, for the benefit of OrbiMed Royalty &
Credit Opportunities IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP (together referred to herein as “OrbiMed”)
1,243,060 new subscription rights for shares of the Company (of those 1,243,060 new subscription rights for shares, 881,906 new subscription
rights for shares to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV, LP and 361,154 new subscription rights
for shares to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP), with a term of 5 years as from
their issue date (the “OrbiMed Warrants”), and to dis-apply, in the interest of the Company, the preferential subscription
right of the Company’s existing shareholders and, insofar as required, of the holders of subscription rights (share options) of
the Company, for the benefit of OrbiMed; and |
| (b) | the report of the Company’s statutory auditor, prepared in accordance with articles 7:180, 7:191
and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to issue for the benefit of OrbiMed 1,243,060 OrbiMed
Warrants, and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s existing shareholders
and, insofar as required, of the holders of subscription rights (share options) of the Company, for the benefit of OrbiMed. |
| 6. | Proposal to issue 1,243,060 OrbiMed Warrants |
Proposed resolution: The
general shareholders’ meeting resolves to approve the issuance of 1,243,060 new subscription rights for shares of the Company, with
a term of 5 years as from their issue date, called the “OrbiMed Warrants”, and to dis-apply, in the interest of the Company,
the preferential subscription right of the Company’s existing shareholders and, insofar as required, of the holders of subscription
rights (share options) of the Company, for the benefit of each of OrbiMed Royalty & Credit Opportunities IV, LP and OrbiMed Royalty
& Credit Opportunities IV Offshore, LP. To this end, the general shareholders’ meeting resolves as follows:
| (a) | Terms and conditions of the subscription rights: The terms and conditions of the OrbiMed Warrants
will be in accordance with Annex A of the report of the board of directors referred to in item 5.(a) of the agenda (for the purposes of
this resolution, the “OrbiMed Warrants Terms and Conditions”), a copy of which will remain attached to the minutes
recording the present resolution. The main terms and conditions of the OrbiMed Warrants can, for information purposes, be summarised as
follows: |
| (i) | Right to subscribe for one ordinary share: Each OrbiMed Warrant entitles its holder to subscribe
for one (1) ordinary share of the Company to be issued by the Company. |
| (ii) | Exercise price: The exercise price of the OrbiMed Warrants (i.e., the price to be paid in cash
to subscribe for one new share in the Company when an OrbiMed Warrant is exercised) will be USD 2.4134. The exercise price is subject
to potential customary downward adjustments in the case of certain dilutive actions of the Company. |
| (iii) | Subscription price: The subscription price for the 881,906 OrbiMed Warrants to be issued for the
benefit of OrbiMed Royalty & Credit Opportunities IV, LP will be USD 1,744,485.56, and the subscription price for the 361,154
OrbiMed Warrants to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP will be USD 714,394.11.
The subscription price shall be booked as issue premium (in accordance with what is stated in paragraph (d) below). |
| (iv) | Term: The OrbiMed Warrants will have a term of 5 years as from their issue date. |
Unofficial English translation – For informational
purposes only
| (v) | Exercisability: The exercise of the OrbiMed Warrants will be subject to the terms and conditions
contained in the OrbiMed Warrants Terms and Conditions. The OrbiMed Warrants may be exercised as from their issuance and until the end
of their term. |
| (vi) | Transferability: The OrbiMed Warrants and all rights thereunder are transferable, in whole or in
part, by the relevant holder in accordance with the OrbiMed Warrants Terms and Conditions. |
| (b) | Underlying shares: Each OrbiMed Warrant will entitle its holder to subscribe for one new share
to be issued by the Company. The new shares to be issued upon exercise of the OrbiMed Warrants shall have the same rights and benefits
as, and rank pari passu in all respects including as to entitlements to dividends and other distributions, with the existing and
outstanding shares of the Company at the moment of their issuance and will be entitled to dividends and other distributions in respect
of which the relevant record date or due date falls on or after the date of their issuance. |
| (c) | Dis-application of the preferential subscription right for the benefit of OrbiMed: The general
shareholders’ meeting resolves, in accordance with articles 7:191 and 7:193 of the Belgian Companies and Associations Code, to dis-apply,
in the interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar as required,
of the holders of subscription rights (share options) of the Company, for the benefit of each of OrbiMed Royalty & Credit Opportunities
IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP, as explained in the report of the board of directors referred to
in item 5.(a) of the agenda. |
| (d) | Conditional capital increase and issue of new shares: The general shareholders’ meeting resolves,
subject to and in the case of the exercise of the OrbiMed Warrants, to increase the share capital of the Company and to issue the appropriate
number of new shares that may be issued upon exercise of the OrbiMed Warrants. Subject to, and in accordance with, the respective provisions
of the OrbiMed Warrants Terms and Conditions, upon exercise of the OrbiMed Warrants and the issuance of new shares, the aggregate amount
of the exercise price of the OrbiMed Warrants will be allocated to (as the case may be, following conversion into the Company’s
share capital currency, on the basis of the relevant USD/EUR exchange ratio as shall be published by the European Central Bank, as provided
for in in section 4(b) of the OrbiMed Warrants Terms and Conditions) the share capital of the Company. To the extent that the amount of
the exercise price of the OrbiMed Warrants, per share to be issued upon exercise of the OrbiMed Warrants, exceeds the fractional value
of the then existing shares of the Company existing immediately prior to the issue of the new shares concerned, a part of the exercise
price, per share to be issued upon exercise of the OrbiMed Warrants, equal to such fractional value shall be booked as share capital,
whereby the balance shall be booked as issue premium. Following the capital increase and issuance of new shares, each new and existing
share shall represent the same fraction of the share capital of the Company. |
| (e) | Issue premium: Any issue premium that will be booked in connection with the OrbiMed Warrants (whether
as subscription price, upon exercise of the OrbiMed Warrants, or otherwise) will be accounted for on a non-distributable account on the
liabilities side of the Company’s balance sheet under its net equity, and the account on which the issue premium will be booked
shall, like the share capital, serve as a guarantee for third parties and can only be reduced on the basis of a lawful resolution of the
general shareholders’ meeting passed in the manner required for an amendments to the Company’s articles of association. |
| (f) | Powers of attorney: The board of directors is authorised to implement and execute the resolutions
adopted by the general shareholders’ meeting in connection with the OrbiMed Warrants, and to take all measures and carry out all
formalities that will be required pursuant to the OrbiMed Warrants Terms and Conditions, the Company’s articles of association and
all applicable laws in order to issue or transfer the shares upon exercise of the OrbiMed Warrants. In addition, each director of the
Company, Joe Sollee and Ron Kalfus, each such person acting individually and with the possibility of sub-delegation and power of subrogation,
shall have the power, upon exercise of the OrbiMed Warrants, (i) to proceed with the recording of (A) the capital increase and the issue
of new shares resulting from such exercise, (B) the allocation as share capital and (if applicable) as issue premium, and (C) the amendment
of the Company’s articles of association to reflect the new share capital and number of shares outstanding following the exercise
of the OrbiMed Warrants (ii) to sign and deliver, on behalf of the Company, the relevant Euroclear, Computershare, Nasdaq and/or bank
documentation, the share register and all other necessary documents in connection with the issuance and delivery of the shares to the
beneficiary and the admission to listing and trading of such shares, and (iii) to do whatever may be necessary or useful (including, but
not limited to, the preparation and execution of all documents and forms) for the admission of the shares issued upon exercise of the
OrbiMed Warrants to trading on Nasdaq (or any other market on which the Company’s shares will then be traded). |
Unofficial English translation – For informational
purposes only
Attendance quorum: According to the Belgian
Companies and Associations Code, an attendance quorum of at least 50% of the outstanding shares must be present or represented at the
extraordinary general shareholders’ meeting for the deliberation and voting the items of the aforementioned agenda of the extraordinary
general shareholders’ meeting. If such attendance quorum is not reached, a second extraordinary general shareholders’ meeting
will be convened for these agenda items, unless, as the case may be, decided otherwise on behalf of the board of directors, and the attendance
quorum requirement will not apply to such second meeting.
Voting and majority: Subject to applicable
legal provisions, each share shall have one vote. In accordance with applicable law, the proposed resolutions referred to in the aforementioned
agenda of the extraordinary general shareholders’ meeting shall be passed if they are approved by a majority of 75% of the votes
validly cast by the shareholders. Pursuant to article 7:135 of the Belgian Companies and Associations Code, the holders of subscription
rights have the right to participate to the extraordinary general shareholders’ meeting, but only with an advisory vote.
Participation
to the meetings
Introduction: Holders of securities issued
by the Company who wish to participate to the ordinary and extraordinary general shareholders’ meetings of the Company should take
into account the formalities and procedures described below.
Since the completion, on 18 December 2023, of
the Company’s transition from a dual listing of the Company’s former American Depositary Shares on Nasdaq and shares on Euronext
Brussels to a sole listing of its shares on Nasdaq, the Company’s shares are comprised of:
| (a) | shares that are reflected in the component of the Company’s share register that is held in Belgium
and which is managed by Euroclear Belgium (the “Belgian Share Register” and, the shares reflected in the Belgian Share
Register, the “European Shares”), and that cannot be traded on Nasdaq until they have been repositioned into U.S. Shares
(as defined below); and |
| (b) | shares that are reflected directly or indirectly in the component of the Company’s share register
that is held in the United States and which is managed by Computershare (the “U.S. Share Register” and, the shares
reflected in the U.S. Share Register, the “U.S. Shares”), and that can be traded on Nasdaq. |
For
further information and details regarding the transition to a single listing on Nasdaq and the repositioning process, please visit the
dedicated web page on the Company’s website (see: https://mdxhealth.com/proposed-transition-to-a-single-listing-on-nasdaq/).
Registration date: In accordance with article
32 of the Company’s articles of association and article 7:134 of the Belgian Companies and Associations Code, the Company’s
board of directors sets the registration date for the ordinary and extraordinary general shareholders’ meetings on Friday, 24 May
2024, at midnight (12:00 a.m., Belgian time) (the “Registration Date”). Only persons owning securities issued by the
Company on Friday, 24 May 2024, at midnight (12:00 a.m., Belgian time) shall be entitled to participate to, and, as the case may be, vote
at the ordinary and extraordinary general shareholders’ meetings. Only shareholders are entitled to vote. The holders of subscription
rights can participate to the ordinary and extraordinary general shareholders’ meetings, but only with an advisory vote. Shareholders,
as well as holders of subscription rights must satisfy the formalities that are described under “—Participation to the meetings”.
Unofficial English translation – For informational
purposes only
Participation to the meetings: In order
to be able to participate to the ordinary and extraordinary general meetings, a holder of securities issued by the Company must satisfy
two conditions: (a) be registered as holder of such securities on the Registration Date, and (b) notify the Company, as described
below:
| (a) | Registration: Firstly, the right for a holder of securities issued by the Company to participate
to and, as applicable, to vote at the ordinary and extraordinary general shareholders’ meetings is only granted on the basis of
the registration of the securities concerned on the aforementioned Registration Date at midnight, as follows: |
| (i) | Holders of registered European Shares and
registered subscription rights issued by the Company: The holders of registered European Shares and subscription rights in registered
form issued by the Company may participate to the ordinary and extraordinary general shareholders’ meetings only
for the registered European Shares and registered subscription rights that are reflected in their name in the Belgian Share Register and
relevant register of subscription rights, respectively, on the Registration Date. |
| (ii) | Holders of dematerialised European Shares:
The holders of dematerialised European Shares that want participate to the ordinary and extraordinary general shareholders’
meetings must request their certified account holder or the central securities depositary for the shares concerned to issue a certificate
stating the number of dematerialised shares registered in the name of the shareholder in its books on the Registration Date, and to send
it to the Company (by mail at its registered office (MDxHealth SA, CAP Business Center, Zone Industrielle des Hauts-Sarts, rue
d’Abhooz 31, 4040 Herstal, Belgium, Attention: Mr. Ron Kalfus) or by e-mail at agsm@mdxhealth.com) at the latest on the second business
day prior to the ordinary and extraordinary general shareholders’ meetings, i.e., on or before Tuesday, 28 May 2024 at the latest
(the “Notification Deadline”). The Company shall determine the ownership of the relevant shares at the Registration
Date solely on the basis of such certificates. |
| (iii) | Holders of U.S. Shares, reflected directly in the U.S. Share Register (not through DTCC): The
holders of U.S. Shares reflected directly in the U.S. Share Register (not through DTCC) may only be admitted to the ordinary and extraordinary
general shareholders’ meetings if their ownership of U.S. Shares is reflected in the U.S. Share Register on the Registration Date.
The Company’s U.S. transfer agent will no later than the Notification
Deadline provide the Company directly or indirectly with a shareholder list at the Registration Date that contains all of the registered
holders of the Company’s U.S. Shares recorded in the U.S. Share Register directly (not through DTCC) on the Registration Date. The
Company shall determine the ownership of the relevant shares at the Registration Date solely on the basis of the aforementioned information.
|
| (iv) | Holders of U.S. Shares reflected indirectly in the U.S. Share Register (through DTCC): The holders
of U.S. Shares reflected indirectly in the U.S. Share Register, through CEDE & Co., the nominee holder of the U.S. Shares held for
the beneficial owners through the DTCC system, may only be admitted to the ordinary and extraordinary general shareholders’ meetings
if their ownership of U.S. Shares is included in the information provided to the Company no later than the Notification Deadline through
the broker, financial institution or other intermediary of such shareholders. The Company shall determine the ownership of the relevant
shares at the Registration Date solely on the basis of the aforementioned information. |
| (b) | Notification: Secondly, in accordance with article 32 of the Company’s articles of association
and article 7:134 of the Belgian Companies and Associations Code, the Company’s board of directors sets the deadline for holders
of securities issued by the Company to notify their participation to the ordinary and extraordinary general shareholders’ meetings
on the Notification Deadline. Therefore, in order to participate to the ordinary and extraordinary general shareholders’ meetings,
holders of securities issued by the Company must notify the Company whether they want to participate to the meetings, and the must do
so prior to or at the latest on Tuesday, 28 May 2024. The holders of securities who wish to make such notification can make use of the
attendance form that can be obtained at the Company’s registered office and on the Company’s website (http://www.mdxhealth.com).
The notice must reach the Company, by mail at its registered office (MDxHealth SA, CAP Business Center, Zone Industrielle des Hauts-Sarts,
rue d’Abhooz 31, 4040 Herstal, Belgium, Attention: Mr. Ron Kalfus) or by e-mail at agsm@mdxhealth.com, at the latest on the Notification
Deadline. Depending on the type securities it holds, a holder of securities issued by the Company must notify to the Company its participation
to the general shareholders’ meetings as follows: |
| (i) | Holders of registered European Shares and
registered subscription rights issued by the Company: Holders of registered European Shares and
subscription rights in registered form issued by the Company that wish to make such notification must make sure that the attendance
form is duly signed and completed and reaches the Company no later than
the Notification Deadline (pursuant to the instructions set out above). |
Unofficial English translation – For informational
purposes only
| (ii) | Holders of dematerialised European Shares: Holders of dematerialised European Shares that wish
to make such notification must make sure that the attendance form is duly signed and completed and reaches the Company no later than the
Notification Deadline (pursuant to the instructions set out above). Furthermore,
the notification must include a certificate confirming the number of European Shares that have been registered in their name on the Registration
Date. The certificate can be obtained by the holders of the dematerialised European Shares with the certified
account holder or the central securities depositary for the European Shares concerned (see also under (ii) in paragraph (a) above). |
| (iii) | Holders of U.S. Shares, reflected directly in the U.S. Share Register (not through DTCC): Holders
of U.S. Shares reflected directly in the U.S. Share Register (not through DTCC) that wish to
make such notification must make sure that the attendance form included as part of their notice is duly completed and reaches the Company
no later than the Notification Deadline (pursuant to the instructions set out above). |
| (iv) | Holders of U.S. Shares reflected indirectly in the U.S. Share Register (through DTCC): Holders
of U.S. Shares reflected indirectly in the U.S. Share Register, through CEDE & Co., the nominee holder of the U.S. Shares held for
the beneficial owners through the DTCC system, that wish to make such notification must make sure that the attendance form is duly completed
and reaches the Company no later than the Notification Deadline (pursuant to the instructions set
out above). Furthermore, the notification must include a certificate from a broker,
financial institution or other intermediary indicating that such holder was the owner of such U.S. Shares on the Registration Date. |
The
Company encourages shareholders to participate to the ordinary and extraordinary general shareholders’ meetings through a signed
proxy or the U.S. proxy card (as further explained below under “—Representation by proxy”)
that will be provided or is made available to them and in accordance with the accompanying instructions. If a shareholder
attends to the general shareholders’ meetings in person, it may revoke its signed proxy or U.S.
proxy card until the Notification Deadline. Providing to the Company a signed proxy or U.S. proxy card to the Company shall also
qualify as a notification, provided that the signed proxy or U.S. proxy
card reaches the Company (by mail at its registered office (MDxHealth SA, CAP Business Center, Zone Industrielle des Hauts-Sarts, rue
d’Abhooz 31, 4040 Herstal, Belgium, Attention: Mr. Ron Kalfus) or by e-mail at agsm@mdxhealth.com) no later than the Notification
Deadline. For the shareholders referred to in (ii) and (iv) above, the signed proxy or U.S.
proxy card must also include the certificates referred to in (ii) and (iv) above respectively.
Representation by proxy: The holders of
securities can participate to the meetings and vote, as applicable, through a written proxy. Written proxies must contain specific voting
instructions for each proposed resolution. Proxy forms can be obtained on the Company’s website (http://www.mdxhealth.com). The
proxy form must be signed in writing or electronically. Holders of U.S Shares who want to appoint a proxy are strongly encouraged to use
the U.S. proxy card that will be provided to them and according to the accompanying instructions.
Signed proxies and U.S. proxy cards must reach the Company by mail
at its registered office (MDxHealth SA, CAP Business Center, Zone Industrielle des Hauts-Sarts, rue d’Abhooz 31, 4040 Herstal, Belgium,
Attention: Mr. Ron Kalfus) or by e-mail at agsm@mdxhealth.com, at the latest on the Notification Deadline, i.e., on or before Tuesday,
28 May 2024 at the latest. Holders of securities who wish to be represented by proxy must, in any case comply with the formalities
to participate to the meetings, as explained under “—Participation to the meetings”. For the shareholders referred to
in (ii) and (iv) of paragraph (b) of “—Participation to the meetings”, the signed proxy or U.S.
proxy card must also include the certificates referred to in (ii) and (iv), respectively, of paragraph (b) of “—Participation
to the meetings”.
Unofficial English translation – For informational
purposes only
Access to the meeting room: The natural
persons who attend the ordinary and extraordinary general shareholders’ meetings in their capacity as owner of securities, holder
of proxies or representative of a legal entity must be able to provide evidence of their identity in order to be granted access to the
meeting room (subject to what is shared above under “—General information”). In addition, the representatives of legal
entities must hand over the documents establishing their capacity as corporate representative or attorney-in-fact. These documents will
be verified immediately before the start of the meetings.
Recommendation to use e-mail: The Company
recommends the holders of its securities to use e-mail for all communication with the Company regarding the general shareholders’
meetings. The Company’s e-mail address for such communication is: agsm@mdxhealth.com. The Company also points at that, in addition
to be physically available at the Company’s registered office and distributed by mail, all forms and other documentation in relation
to the general shareholders’ meetings will be available on the Company’s website (http://www.mdxhealth.com). See also “—Available
documentation”.
Data
Protection
The Company
is responsible for the processing of personal data it receives from, or collects about, holders of securities issued by the Company and
proxy holders in the context of general shareholders’ meetings. The processing of such data will be carried out for the purposes
of the organisation and conduct of the relevant general shareholders’ meeting, including the convening notices, registrations, participation
and voting, as well as for maintaining lists or registers of security holders, and the analysis of the investor and security holder base
of the Company. The data include, amongst others, identification data, the number and nature of securities of a holder of securities issued
by the Company, proxies and voting instructions. This data may also be transferred to third parties for the purposes of assistance or
services to the Company in connection with the foregoing. The processing of such data will be carried out, mutatis mutandis, in
accordance with the Company’s Privacy Policy, available on the Company’s website (https://mdxhealth.com/privacy-policy). The
Company draws the attention of the holders of securities issued by the Company and proxy holders to the description of the rights they
may have as data subjects, such as, among others, the right to access, the right to rectify and the right to object to processing, which
are outlined in the aforementioned Privacy Policy. All this does not affect the rules that apply in connection with the registration and
participation to the general shareholders’ meeting. To exercise rights as a data subject and for all other information regarding
the processing of personal data by or on behalf of the Company, the Company can be contacted by e-mail at dataprotection@mdxhealth.com.
available
documentation
The following documentation is available on the
Company’s website (http://www.mdxhealth.com): the notice convening the ordinary and extraordinary general shareholders’ meetings,
the documents to be submitted to the ordinary and extraordinary general shareholders’ meetings as referred to in the agenda of the
meetings, the attendance form, and the proxy form. Prior to the ordinary and extraordinary general shareholders’ meetings, holders
of securities of the Company can also obtain at the registered office of the Company (CAP Business Center, Zone Industrielle des Hauts-Sarts,
rue d’Abhooz 31, 4040 Herstal, Belgium), free of cost, a copy of this documentation.
Please address any correspondence on this matter
to MDxHealth SA, Mr. Ron Kalfus CAP Business Center, Zone Industrielle des Hauts-Sarts, rue d’Abhooz 31, 4040 Herstal, Belgium.
The facsimile number is +32 (0)4 259 78 75 and the e-mail address is agsm@mdxhealth.com.
On behalf of the board of directors
This document
is not an offer to sell or a solicitation of an offer to buy shares or other securities of mdxhealth sa.
13
Exhibit 99.2
| |
 |
| |
MDxHealth SA |
| |
CAP Business Center |
| |
Rue d’Abhooz, 31 |
| |
B-4040 Herstal - Belgium |
| |
T. +32 (0) 4 257 70 21 |
| |
F. +32 (0) 4 259 78 75 |
| May 15, 2024 |
|
|
E. info@mdxhealth.com |
| |
www.mdxhealth.com |
Dear Shareholder,
| Re: | Ordinary and extraordinary general shareholders’ meetings of MDxHealth SA to be held on May 30, 2024
|
On behalf of the Board of Directors of MDxHealth
SA (the “Company”), you are cordially invited to attend the 2024 ordinary and extraordinary general shareholders’ meetings
(respectively the “Ordinary” and “Extraordinary” Meetings) to be held in-person on Thursday, May 30,
2024, at 3:00 p.m. (Belgian time) at the offices of the notary public Stijn Raes, at Kortrijksesteenweg 1147, 9051 Ghent, Belgium.
The respective agendas, proposed resolutions and
the other documents for the Ordinary and Extraordinary Meetings are available in French and English on the Company’s website (see: https://www.mdxhealth.com/shareholder-information/).
We encourage you to read these materials carefully.
Whether or not you plan to attend the meetings,
your vote is important, and we encourage you to vote promptly.
For a description of the formalities to be fulfilled
by holders of securities of the Company to participate and vote Ordinary and Extraordinary Meetings, please see notice convening the meetings,
which can be found on the Company’s website.
You may also vote your shares through one of the
methods described in the accompanying proxy card.
Sincerely,
Michael K. McGarrity
CEO & Director
TVA
BE 0479 292 440 w RCB 212
29 w ING Bank 736-0304341-19
NOTICE OF MDXHEALTH SA
ORDINARY GENERAL MEETING OF SHAREHOLDERS AND
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
MAY 30, 2024 3:00 P.M. (Belgian Time)
At the offices of the notary public Stijn Raes,
at Kortrijksesteenweg 1147, 9051 Ghent, Belgium
To the Shareholders of MDxHealth SA:
The 2024 ordinary and extraordinary general shareholders’
meetings (respectively the “Ordinary” and “Extraordinary” Meetings) to be held in-person on Thursday,
May 30, 2024, at 3:00 p.m. Central European Time at the offices of the notary public Stijn Raes, at Kortrijksesteenweg 1147, 9051 Ghent,
Belgium.
The purpose of the meetings is to:
Ordinary Meeting
| ● | Report on the annual statutory financial statements and consolidated financial statements |
| ● | Approve the annual (non-consolidated) statutory financial statements and review the consolidated financial
statements |
| ● | Discharge the directors and the statutory auditor from liability |
| ● | Re-appoint two directors: |
| ● | Ahok BV, represented by Koen Hoffmann |
| ● | Qaly-Co BV, represented by Lieve Verplancke |
| ● | Approve the remuneration of the directors |
Extraordinary Meeting
| ● | Report on and approve the 2024 Share Option Plan and 2,000,000 2024 Share Options |
| ● | Report on and approve 1,000,000 Exact Sciences Warrants |
| ● | Report on and approve 1,000,000 OrbiMed Warrants |
The respective detailed agendas, proposed resolutions
and the other documents for the Ordinary and Extraordinary Meetings are available in French and English on the Company’s website (see:
https://www.mdxhealth.com/shareholder-information/). We encourage you to read these materials carefully.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETINGS, PLEASE VOTE YOUR SHARES IN ACCORDANCE WITH THE INSTRUCTIONS SET OUT ON THE ACCOMPANYING PROXY CARD. PROXY CARDS
SHOULD BE DATED, SIGNED AND RETURNED FOR RECEIPT BY OR BEFORE MAY 23, 2024. YOUR PROMPT COOPERATION IS GREATLY APPRECIATED.
| |
On behalf of the board of directors |
| |
|
| |
Joseph Sollee |
| |
General Counsel & Secretary of the Board of Directors |
TVA BE 0479 292 440 ● RCB 212 29 ●
ING Bank 310-1801580-85
Exhibit 99.3
MDxHealth SA
Limited Liability Company
(société anonyme)
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal, Belgium
VAT BE 0479.292.440 (RLP Liège, division Liège)
|
ATTENDANCE FORM FOR SECURITY HOLDERS
ordinary
and Extraordinary General Meetings
to be held on Thursday, 30 May 2024, at 3:00 p.m. (Belgian time) |
|
This attendance form should be used by holders
of securities of MDxHealth SA (the “Company”) who want to attend the ordinary and extraordinary general shareholders’
meetings in person. More information regarding the requirements for, and the modalities of, participation in the meetings can be found
in the convening notice of the ordinary and extraordinary general shareholders’ meetings.
The signed and completed form must reach the Company
at the latest on the second business day prior to the ordinary and extraordinary general shareholders’ meetings, i.e., on
or before Tuesday, 28 May 2024 at the latest, by mail to:
MDxHealth SA
Attention Mr. Ron Kalfus
Company Secretary
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz, 31
4040 Herstal,
Belgium
or by e-mail to:
agsm@mdxhealth.com
The use of e-mail
is strongly encouraged.
The Company’s
shares are comprised of: (a) shares that are reflected in the component of the Company’s share register that is held in Belgium and which
is managed by Euroclear Belgium (the “Belgian Share Register” and, the shares reflected
in the Belgian Share Register, the “European Shares”), and that cannot be traded on
Nasdaq until they have been repositioned into U.S. Shares (as defined below), and (b) shares that are reflected directly or indirectly
in the component of the Company’s share register that is held in the United States and which is managed by Computershare (the “U.S.
Share Register” and, the shares reflected in the U.S. Share Register, the “U.S. Shares”),
and that can be traded on Nasdaq.
Holders
of dematerialised European Shares must attach to the present form a certificate issued by the certified account holder or the central
securities depositary for the shares concerned, confirming the number of dematerialised European Shares that have been registered in their
name on the registration date (i.e., Friday, 24 May 2024, at midnight (12:00 a.m., Belgian time)) (the “Registration
Date”), with which they want to participate to the ordinary and extraordinary general shareholders’
meetings.
Holders of U.S.
Shares reflected indirectly in the U.S. Share Register, through CEDE & Co., the nominee holder of the U.S. Shares held for the beneficial
owners through the DTCC system, must attach to the present form a certificate from a broker, financial institution or other intermediary
confirming their ownership of U.S. Shares on the Registration Date, with which they want to participate to the ordinary and extraordinary
general shareholders’ meetings. |
Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth
SA - Attendance form for security holders
The undersigned,
| First Name: |
|
|
| Family Name: |
|
|
| Address: |
|
|
| or |
|
|
| Corporate name: |
|
|
| Corporate form: |
|
|
| Registered office: |
|
|
| Represented by (first name, family name and capacity): |
|
|
| |
|
|
| |
|
|
| |
|
|
owner of the following number of securities issued
by MDxHealth SA, with registered office at CAP Business Center, Zone Industrielle des Hauts-Sarts, rue d’Abhooz 31, 4040 Herstal, Belgium:
| |
| | |
| |
| (1) | registered European Shares |
| |
| (1) | dematerialised European Shares |
| |
| (1) | U.S. Shares reflected directly in the U.S. Share Register (not through DTCC) |
| |
| (1) | U.S. Shares reflected indirectly in the U.S. Share Register (through DTCC) |
| |
| (1) | subscription rights (2) |
| |
| | |
| (1) |
Number of relevant securities to be completed, when applicable. |
| |
|
| (2) |
Pursuant to article 7:135 of the Belgian Companies and Associations Code, the holders of subscription rights have the right to attend the shareholders’ meetings, but only with an advisory vote. |
Hereby notifies his/her/its intent to attend the
ordinary and extraordinary general shareholders’ meetings of MDxhealth SA to be held on Thursday, 30 May 2024, at 3:00 p.m. (Belgian
time) at the offices of the notary public Stijn Raes, at Kortrijksesteenweg 1147, 9051 Ghent, Belgium, or at such other place indicated
at that place at that time.
The undersigned agrees that the English translation
of the present attendance form is a free translation and for information purposes only, and that the French version shall prevail over
the English translation.
The undersigned hereby confirms that the Company
can send all confirmations and information required for participation in the ordinary and extraordinary general shareholders’ meetings
to the following e-mail address of the undersigned:
|
(E-mail address of security holder) |
Done at
_______________________, on _____________________2024
Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth
SA - Attendance form for security holders
Exhibit 99.4
|
AssemblÉes
gÉnÉrales ordinaire et extraordinaire des Actionnaires
30
mai 2024
|
ordinary
and extraordinary general shareholders’ meetings
30 May 2024 |
| Cette
procuration doit être utilisée par les titulaires de titres de MDxHealth SA (la “Société”)
qui désirent être représentés par un mandataire spécial aux assemblées générales
ordinaire et extraordinaire des actionnaires de la Société à tenir le jeudi 30 mai 2024 à 15h00 (heure
belge). Nonobstant ce qui précède, les titulaires d’Actions Américaines (telles que définies ci-dessous)
qui souhaitent désigner un mandataire sont vivement encouragés à utiliser la carte de procuration américaine
(U.S. proxy card) qui leur a été fournie et à suivre les instructions qui l’accompagnent. |
This
proxy should be used by holders of securities of MDxHealth SA (the “Company”) who want to be represented by a proxy
holder at the ordinary and extraordinary general shareholders’ meetings of the Company to be held on Thursday, 30 May 2024, at 3:00
p.m. (Belgian time). Notwithstanding the above, holders of U.S. Shares (as defined below) who want to appoint a proxy are strongly
encouraged to use the U.S. proxy card provided to them and according to the accompanying instructions. |
| |
|
| Les
actions de la Société se composent : (a) d’actions inscrites dans la composante du registre des actions de la Société
qui est tenue en Belgique et qui est maintenue par Euroclear Belgium (le “Registre Belge des Actions” et, les actions
reflétées dans le Registre Belge des Actions, les “Actions Européennes”), et qui ne peuvent
pas être négociées sur le Nasdaq tant qu’elles n’ont pas été repositionnées en Actions Américaines
(telles que définies ci-dessous), et (b) d’actions inscrites directement ou indirectement dans la composante du registre des
actions de la Société tenue aux États-Unis et qui est maintenue par Computershare (le “Registre Américain
des Actions” et, les actions figurant dans le Registre Américain des Actions, les “Actions Américaines”),
et qui peuvent être négociées sur le Nasdaq. |
The
Company’s shares are comprised of: (a) shares that are reflected in the component of the Company’s share register that is held in
Belgium and which is managed by Euroclear Belgium (the “Belgian Share Register” and, the shares reflected in the
Belgian Share Register, the “European Shares”), and that cannot be traded on Nasdaq until they have been repositioned
into U.S. Shares (as defined below), and (b) shares that are reflected directly or indirectly in the component of the Company’s share
register that is held in the United States and which is managed by Computershare (the “U.S. Share Register” and,
the shares reflected in the U.S. Share Register, the “U.S. Shares”), and that can be traded on Nasdaq. |
| |
|
| Cette
procuration ne constitue pas une sollicitation publique de procuration au sens des article 7:145 du Code des sociétés
et des associations. |
This
proxy does not constitute a proxy solicitation in the sense of article 7:145 of the Belgian Companies and Associations Code. |
| |
|
| La
procuration doit être signée de façon écrite ou électroniquement. |
The
proxy must be signed in writing or electronically. |
| |
|
| La
procuration signée et complétée doit parvenir à la Société au plus tard le deuxième
jour ouvrable qui précède les assemblées générales ordinaire et extraordinaire des actionnaires,
soit le, ou avant le, mardi 28 mai 2024 (la “Date limite de Notification”) au plus tard.
Jusqu’à cette date, les procurations peuvent être envoyées à l’adresse
suivante : |
The
signed and completed proxy must reach the Company at the latest on the second business day prior to the ordinary and extraordinary
general shareholders’ meetings, i.e. on or before Tuesday, 28 May 2024 (the “Notification Deadline”)
at the latest. Until the Notification Deadline, proxies can be sent to the following address: |
| |
|
MDxHealth
SA
A l’attention de M. Ron Kalfus
Secrétaire de la Société
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31,
4040 Herstal
Belgique |
MDxHealth
SA
Attention Mr. Ron Kalfus
Company Secretary
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz, 31
4040 Herstal,
Belgium |
| |
|
| ou
par courrier électronique à : |
or
by e-mail to: |
| agsm@mdxhealth.com |
agsm@mdxhealth.com |
| |
|
| Les
titulaires de titres de la Société qui désirent être représentés par procuration doivent
aussi s’enregistrer aux assemblées générales ordinaire et extraordinaire des actionnaires, tel que décrit
dans l’invitation aux assemblées générales ordinaire et extraordinaire des actionnaires. Les titulaires d’Actions
Européennes dématérialisés doivent joindre à ce formulaire un certificat délivré
par le teneur de compte agréé ou le dépositaire central de titres pour les actions concernées, confirmant
le nombre d’Actions Européennes dématérialisées ayant été enregistrés à leur
nom à la date d’enregistrement (soit le vendredi 24 mai 2024, à minuit (00h00, heure belge)) (la “Date d’Enregistrement”)
et avec lesquelles ils veulent participer aux assemblées générales ordinaire et extraordinaire des actionnaires.
Les titulaires d’Actions Américaines inscrites indirectement dans le Registre Américain des Actions, par l’intermédiaire
de CEDE & Co, le détenteur désigné des Actions Américaines détenues pour les bénéficiaires
effectifs via le système DTCC, doivent joindre au présent formulaire un certificat d’un courtier, d’une institution
financière ou d’un autre intermédiaire confirmant leur propriété des Actions Américaines à
la Date d’Enregistrement, avec lesquelles ils souhaitent participer aux assemblées générales ordinaires et extraordinaires
des actionnaires. |
Holders
of securities of the Company who wish to be represented by proxy must also register for the ordinary and extraordinary general shareholders’
meetings, as described in the notice convening the ordinary and extraordinary general shareholders’ meetings. Holders of dematerialised
European Shares must attach to the present form a certificate issued by the certified account holder or the central securities depositary
for the shares concerned, confirming the number of dematerialised European Shares that have been registered in their name on the
registration date (i.e., Friday, 24 May 2024, at midnight (12:00 a.m., Belgian time)) (the “Registration Date”),
with which they want to participate to the ordinary and extraordinary general shareholders’ meetings. Holders of U.S. Shares reflected
indirectly in the U.S. Share Register, through CEDE & Co., the nominee holder of the U.S. Shares held for the beneficial owners
through the DTCC system, must attach to the present form a certificate from a broker, financial institution or other intermediary
confirming their ownership of U.S. Shares on the Registration Date, with which they want to participate to the ordinary and extraordinary
general shareholders’ meetings. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 1/18 |
| La
Société recommande d’utiliser le courrier électronique pour toute communication avec la Société
concernant les assemblées générales d’actionnaires. |
The
Company recommends to use e-mail for all communication with the Company regarding the general shareholders’ meetings. |
| Le/La
soussigné(e), |
The
undersigned, |
| Prénom
/ First name: |
|
| Nom
de famille / Family name: |
|
| Adresse
/ Address: |
|
| ou
/ or |
|
| Dénomination
/ Corporate name: |
|
| Forme
juridique / Corporate form: |
|
| Siège
/ Registered office: |
|
| Représenté
par (prénom, nom de famille et qualité) / |
|
| Represented by (first name, family name and capacity): |
|
| titulaire
du (des) nombre(s) suivant(s) de titres émis par MDxHealth SA, ayant son siège au CAP Business Center, Zone Industrielle
des Hauts-Sarts, Rue d’Abhooz 31, 4040 Herstal, Belgique, |
owner
of the following number of securities issued by MDxHealth SA, with its registered office at CAP Business Center, Zone Industrielle
des Hauts-Sarts, rue d’Abhooz 31, 4040 Herstal, Belgium, |
| |
Nombre
d’Actions Européennes nominatives / Number of registered European Shares: |
|
| |
|
|
| |
Nombre
d’Actions Européennes dématérialisées / Number of dematerialised European Shares: |
|
|
|
|
| |
Nombre
d’Actions Américaines, inscrites directement dans le Registre Américain des Actions (pas par l’intermédiaire
de DTCC) / Number of U.S. Shares reflected directly in the U.S. Share Register (not through DTCC): |
|
| |
|
|
| |
Nombre
d’Actions Américaines, inscrites indirectement dans le Registre Américain des Actions (par l’intermédiaire de
DTCC) / Number of U.S. Shares reflected indirectly in the U.S. Share Register (through DTCC): |
|
| |
|
|
| |
Nombre
de droits de souscription / Number of subscription rights:1 |
|
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 2/18 |
| constitue
pour mandataire spécial, avec pouvoir de substitution: |
appoints
as his/her/its proxy holder, with power of substitution: |
☐
M./Mme / Mr./Ms.__________________________________________________________2
☐
Président du conseil d’administration / Chair of the board of
directors3
|
1 Conformément
à l’article 7:135 du Code des sociétés et des associations, les titulaires de droits de souscription ont le droit
de participer à l’assemblée générale des actionnaires mais seulement avec voix consultative.
2 Veuillez
compléter tel qu’approprié. Une absence d’instruction sera interprétée comme une nomination du président
du conseil d’administration en tant que mandataire. |
1 Pursuant to article 7:135 of the
Belgian Companies and Associations Code, the holders of subscription rights have the right to attend the shareholders’ meetings, but only
with an advisory vote.
2 Please complete as appropriate.
An absence of instruction shall be tantamount to an appointment of the chair of the board of directors as proxy holder. |
| |
|
| 3 Le président du conseil d’administration de la Société a le pouvoir de nommer un autre administrateur, un employé ou remplaçant désigné de la Société comme suppléant en vertu d’une sous-délégation si le président est empêché d’assister aux assemblées générales des actionnaires. Le président ou son suppléant ne vote qu’en exécution de la procuration, conformément aux instructions de vote spécifiques figurant dans la procuration. Voir également la note 2 ci-dessous. |
3 The chair of the board of directors of the Company has the power to appoint another director, employee or substitute of the Company as a substitute pursuant to a sub delegation if the chair is hindered to attend the general shareholders’ meetings. The chair or his substitute may only vote in execution of the proxy, in accordance with the specific voting instructions included in the proxy. See also note 2 below. |
| |
|
| lequel accepte ainsi d’être nommé, et à qui le/la soussigné(e) donne les pouvoirs et instructions de vote spécifiques suivants:4 |
who agrees to be so appointed, and to whom the undersigned gives the following powers and specific voting instructions:4 |
| |
|
|
4 Veuillez indiquer l’instruction
de vote dans les cases appropriées pour les points à l’ordre du jour. En l’absence d’une instruction de vote pour un point
de l’ordre du jour, ou dans le cas où, pour quelque raison que ce soit, il y aurait un manque de clarté concernant les
instructions de vote, le mandataire sera présumé avoir voté “en faveur” des résolutions proposées
soutenues par le conseil d’administration et cela sera considéré comme une instruction de vote spécifique au sens
de l’article 7:143 §4 2° du Code des sociétés et des associations. |
4 Please indicate the voting instructions in the appropriate boxes of the agenda items. In the absence of voting instructions for any agenda item or in the event that, for any reason whatsoever, any uncertainty would arise with regards to the voting instructions, the proxy holder will be presumed to have voted “in favour” of the proposed resolutions supported by the board of directors and that this will be deemed to be a specific voting instruction in the sense of article 7:143 §4 2° of the Belgian Companies and Associations Code. |
| |
|
| I. De
représenter le/la soussigné(e) aux assemblées générales ordinaire et extraordinaire des
actionnaires à tenir le jeudi 30 mai 2024 à 15h00 (heure belge), dans les bureaux de Maître Stijn Raes, notaire,
à Kortrijksesteenweg 1147, 9051 Gand, Belgique, ou à tout autre endroit qui sera indiqué à cette
occasion. |
I. To
represent the undersigned at the ordinary and extraordinary general meetings of shareholders to be held on Thursday, 30 May 2024 at
3:00 p.m. (Belgian time), at the offices of the notary public Stijn Raes, at Kortrijksesteenweg 1147, 9051 Ghent, Belgium, or at
such place as will be indicated at that place at that time. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 3/18 |
ORDRE
DU JOUR
assemblée
générale ordinaire |
agenda
Ordinary
general meeting
|
| 1.
Rapport sur les comptes annuels statutaires et sur les comptes annuels consolidés |
1. Report
on the annual statutory financial statements and on the consolidated financial statements |
Communication et discussion (a) du rapport annuel combiné du
conseil d’administration sur les comptes annuels consolidés et statutaires (non consolidés) de la Société
pour l’exercice social clôturé au 31 décembre 2023, (b) du rapport du commissaire sur les comptes annuels statutaires
(non consolidés) de la Société pour l’exercice social clôturé au 31 décembre 2023, et (c) du
rapport du commissaire sur les comptes annuels consolidés de la Société pour l’exercice social clôturé
au 31 décembre 2023. |
Submission of, and discussion on, (a) the combined annual report of
the board of directors on the consolidated and (non-consolidated) statutory financial statements of the Company for the financial year
ended on 31 December 2023, (b) the report of the statutory auditor on the (non-consolidated) statutory financial statements of the Company
for the financial year ended on 31 December 2023, and (c) the report of the statutory auditor on the consolidated financial statements
of the Company for the financial year ended on 31 December 2023. |
| |
|
| 2. Approbation des comptes annuels statutaires (non consolidés) |
2. Approval of the annual (non-consolidated) statutory financial statements |
| Communication,
discussion et approbation des comptes annuels statutaires (non consolidés) pour l’exercice social clôturé au 31 décembre
2023 et approbation de l’affectation du résultat tel que proposé par le conseil d’administration. |
Submission of, discussion on, and approval of the annual (non-consolidated)
statutory financial statements for the financial year ended on 31 December 2023, and approval of the allocation of the result as proposed
by the board of directors. |
| |
|
| ►
Proposition de résolution: |
► Proposed resolution: |
L’assemblée générale des actionnaires décide
d’approuver les comptes annuels statutaires (non consolidés) de la Société pour l’exercice social clôturé
le 31 décembre 2023 et d’approuver l’affectation du résultat annuel tel que proposé par le conseil d’administration.
|
The general shareholders’ meeting resolves to approve the annual (non-consolidated)
statutory financial statements of the Company for the financial year ended on 31 December 2023 and to approve the allocation of the annual
result as proposed by the board of directors. |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| 3. Comptes annuels consolidés |
3. Consolidated financial statements |
| Communication et discussion des comptes annuels consolidés de la Société pour l’exercice social clôturé le 31 décembre 2023. |
Submission of, and discussion on, the consolidated financial statements of the Company for the financial year ended on 31 December 2023. |
| |
|
| 4. Décharge de responsabilité des administrateurs |
4. Discharge from liability of the directors |
| Décharge de responsabilité des administrateurs pour l’exercice
de leur mandat au cours de l’exercice social clôturé le 31 décembre 2023. |
Discharge from liability of the directors for the exercise of their
mandates during the financial year ended on 31 December 2023. |
| ► Proposition de résolution: |
► Proposed resolution: |
| L’assemblée générale des actionnaires décide d’accorder la décharge à chacun des administrateurs
qui était en fonction au cours de l’exercice social clôturé le 31 décembre 2023 pour l’exercice de son mandat
au cours de cet exercice social. |
The general shareholders’ meeting resolves to grant discharge from liability to each of the directors who was in office during the financial
year ended on 31 December 2023, for the performance of its, his or her mandate during that financial year. |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| 5.
Décharge de responsabilité du commissaire |
5. Discharge from liability of the statutory auditor |
| Décharge de responsabilité du commissaire pour l’exercice
de son mandat au cours de l’exercice social clôturé le 31 décembre 2023. |
Discharge from liability of the statutory auditor for the exercise
of its mandate during the financial year ended on 31 December 2023. |
| |
|
| ► Proposition de résolution: |
► Proposed resolution: |
| L’assemblée générale des actionnaires décide
d’accorder la décharge au commissaire qui était en fonction au cours de l’exercice social clôturé le 31 décembre
2023 pour l’exercice de son mandat au cours de cet exercice social. |
The general shareholders’ meeting resolves to grant discharge from
liability to the statutory auditor which was in office during the financial year ended on 31 December 2023, for the performance of its
mandate during that financial year. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 4/18 |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| 6. Renouvellement
de mandats d’administrateurs |
6. Re-appointment
of directors |
| Le conseil d’administration recommande que (a) Ahok BV, représentée
par Koen Hoffman en tant que représentant permanent, et (b) Qaly-Co BV, représentée par Lieve Verplancke en tant
que représentante permanente, soient renouvelés en tant qu’administrateurs de la Société, chacune pour une
durée de deux ans. |
The board of directors recommends that (a) Ahok BV, represented by
Koen Hoffman as permanent representative, and (b) Qaly-Co BV, represented by Lieve Verplancke as permanent representative, be re-appointed
as directors of the Company, each for a term of two years. |
| |
|
| ► Propositions de résolutions: |
► Proposed resolutions: |
| (a) L’assemblée générale des actionnaires décide
de renouveler le mandat de Ahok BV, représentée par Koen Hoffman en tant que représentant permanent, en tant qu’administrateur
de la Société, pour une durée de deux ans, s’étendant jusqu’à, et y compris, la clôture de l’assemblée
générale ordinaire des actionnaires à tenir en 2026 qui statuera sur les comptes annuels de l’exercice social clôturé
le 31 décembre 2025. Le mandat de l’administrateur est rémunéré, cette rémunération étant
telle que décidée par l’assemblée générale des actionnaires de temps à autre. |
(a) The general shareholders’ meeting
resolves to re-appoint Ahok BV, represented by Koen Hoffman as permanent representative, as director of the Company for a term of
two years, up to and including the closing of the ordinary general shareholders’ meeting to be held in 2026 which will have
decided upon the financial statements for the financial year ended on 31 December 2025. The mandate of the director shall be
remunerated, which remuneration shall be as decided by the general shareholders’ meeting from time to time. |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| (b)
L’assemblée générale des actionnaires décide de renouveler le mandat de Qaly-Co BV,
représentée par Lieve Verplancke en tant que représentante permanente, en tant qu’administrateur de la
Société, pour une durée de deux ans, s’étendant jusqu’à, et y compris, la
clôture de l’assemblée générale ordinaire des actionnaires à tenir en 2026 qui statuera sur
les comptes annuels de l’exercice social clôturé le 31 décembre 2025. Le mandat de l’administrateur
est rémunéré, cette rémunération étant telle que décidée par
l’assemblée générale des actionnaires de temps à autre. |
(b) The general shareholders’ meeting
resolves to re-appoint Qaly-Co BV, represented by Lieve Verplancke as permanent representative, as director of the Company for a
term of two years, up to and including the closing of the ordinary general shareholders’ meeting to be held in 2026 which will
have decided upon the financial statements for the financial year ended on 31 December 2025. The mandate of the director shall be
remunerated, which remuneration shall be as decided by the general shareholders’ meeting from time to time. |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| Note : Si la résolution proposée au point 6 est approuvée
par l’assemblée générale des actionnaires, le conseil d’administration de la Société sera composé
de (1) Michael K. McGarrity, Chief Executive Officer (CEO), administrateur et administrateur délégué (jusqu’en 2026),
(2) Ahok BV, représentée par Koen Hoffman, administrateur et président du conseil d’administration (jusqu’en 2026),
(3) Hilde Windels BV, représentée par Hilde Windels, administrateur (jusqu’en 2025), (4) Qaly-Co BV, représentée
par Lieve Verplancke, administrateur (jusqu’en 2026), (5) Donnie M. Hardison Jr., administrateur (jusqu’en 2025), (6) Regine Slagmulder
BV, représentée par Regine Slagmulder, administrateur (jusqu’en 2025), et (7) Eric Bednarski, administrateur (jusqu’en 2025). |
Note: If the proposed resolutions set out in point 6 are approved by
the general shareholders’ meeting, the Company’s board of directors will be composed of (1) Michael K. McGarrity, chief executive officer
(CEO), executive director and managing director (until 2026), (2) Ahok BV, represented by Koen Hoffman, director and chair of the board
of directors (until 2026), (3) Hilde Windels BV, represented by Hilde Windels, director (until 2025), (4) Qaly-Co BV, represented by Lieve
Verplancke, director (until 2026), (5) Donnie M. Hardison Jr., director (until 2025), (6) Regine Slagmulder BV, represented by Regine
Slagmulder, director (until 2025), and (7) Eric Bednarski, director (until 2025). |
| |
|
| 7. Rémunération
des administrateurs |
7. Remuneration of directors |
| En tenant compte de la
recommandation du Comité de Rémunération du conseil d’administration, le conseil d’administration propose que
la rémunération des membres du conseil d’administration soit modifiée comme indiqué dans la proposition
de résolution. |
Taking into account the recommendation of the Compensation Committee
of the board of directors, the board of directors proposes that the remuneration of the members of the board of directors be amended as
set out in the proposed resolution. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 5/18 |
| ► Proposition de
résolution : |
► Proposed resolution: |
| L’assemblée générale des actionnaires décide que la rémunération des membres du conseil d’administration de la Société sera la suivante : |
The general shareholders’ meeting resolves that the remuneration of the members of the board of directors of the Company shall be as follows: |
| |
|
| (a) Le
mandat des administrateurs de la Société est rémunéré comme suit : |
(a) The mandate of the directors of the Company shall be remunerated as follows: |
| |
|
| (i) Chaque administrateur a droit à une rémunération fixe annuelle maximale de USD 40.000,00 (environ EUR 37.120,00). |
(i) Each director shall be entitled to a maximum annual fixed remuneration
of USD 40,000.00 (ca. EUR 37,120.00). |
| |
|
| (ii) Le président du conseil d’administration a droit à une rémunération fixe annuelle maximale supplémentaire de USD 64.400,00 (environ EUR 59.762,00). |
(ii) The chairperson of the board of directors shall be entitled to an additional maximum annual fixed remuneration of USD 64,400.00 (ca. EUR 59,762.00). |
| |
|
| (iii) Le président du Comité d’Audit a droit à une rémunération fixe annuelle maximale supplémentaire de EUR 19.000,00 (environ EUR 17.632,00), et les autres membres du Comité d’Audit (autres que le président de ce comité) ont droit à une rémunération fixe annuelle maximale supplémentaire de USD 9.500,00 (environ EUR 8.816,00). |
(iii) The chairperson of the Audit Committee shall be entitled to an additional maximum annual fixed remuneration of USD 19,000.00 (ca. EUR 17,632.00), and the other members of the Audit Committee (other than the chairperson of this committee) shall be entitled to an additional maximum annual fixed remuneration of USD 9,500 (ca. EUR 8,816.00). |
| |
|
| (iv) Le président du Comité de Gouvernance d’Entreprise et de Nomination a droit à une
rémunération fixe annuelle maximale supplémentaire de USD 10.000,00 (environ EUR 9.280,00), et les autres
membres du Comité de Gouvernance d’Entreprise et de Nomination (autres que le président de ce comité) ont
droit à une rémunération fixe annuelle maximale supplémentaire de USD 5.000,00 (environ EUR
4.640,00). |
(iv) The chairperson of the Corporate Governance and Nominating Committee shall be entitled to an additional maximum annual fixed remuneration of USD 10,000.00 (ca. EUR 9,280.00), and the other members of the Corporate Governance and Nominating Committee (other than the chairperson of this committee) shall be entitled to an additional maximum annual fixed remuneration of USD 5,000.00 (ca. EUR 4,640.00). |
| |
|
| (v) Le président du Comité de Rémunération a droit à une rémunération fixe annuelle maximale supplémentaire de USD 13.500,00 (environ EUR 12.528,00), et les autres membres du Comité de Rémunération (autres que le président de ce comité) ont droit à une rémunération fixe annuelle maximale supplémentaire de USD 6.800,00 (environ EUR 6.310,00). |
(v) The chairperson of the Compensation Committee shall be entitled to an additional maximum annual fixed remuneration of USD 13,500.00 (ca. EUR 12,528.00), and the other members of the Compensation Committee (other than the chairperson of this committee) shall be entitled to an additional maximum annual fixed remuneration of USD 6,800.00 (ca. EUR 6,310.00). |
| |
|
| (vi) Les rémunérations prévues aux paragraphes (ii), (iii), (iv) et (v) s’ajoutent à la rémunération prévue au paragraphe (i) et peuvent être combinées, selon que les critères d’éligibilité énoncés dans ces paragraphes ont été remplis ou non. La rémunération peut être réduite pro rata temporis en fonction de la durée du mandat ou de la présidence d’un administrateur ou de son appartenance à un comité au cours d’une année donnée. Tous les montants s’entendent hors TVA et autres charges similaires. |
(vi) The remuneration set out in paragraphs (ii), (iii), (iv) and (v) shall be in addition to the remuneration set out in paragraph (i) and can be combined, depending on whether the eligibility criteria set out in these paragraphs have been met. The remuneration can be reduced pro rata temporis depending on the duration of the mandate, chairpersonship or membership of a director during a given year. All amounts are exclusive of VAT and similar charges. |
| |
|
| (b)
Nonobstant ce qui précède, les administrateurs qui, conformément aux règles et réglementations de
la législation américaine et/ou du Nasdaq, peuvent être ou ont été qualifié
d’administrateurs indépendants, ont chacun le droit (i) de recevoir, le 15 juin 2024, une attribution unique de droits
de souscription (share options) pour 30.000 actions de la Société, et (ii) chaque année suivante, à
compter de l’assemblée générale ordinaire des actionnaires qui se tiendra en 2025 et qui aura
statué sur les comptes annuels de l’exercice social clôturé le 31 décembre 2024, de recevoir des
droits de souscription (share options) pour un maximum de 10.000 actions de la Société. |
(b) Notwithstanding the foregoing, directors whom, in
accordance with the rules and regulations of U.S. law and/or Nasdaq can be, or have been, qualified as independent directors, shall
each be entitled (i) to receive, on 15 June 2024, a one-time grant of share options for 30,000 shares of the Company, and (ii) each
year thereafter, commencing with the ordinary general shareholders’ meeting to be held in 2025 which will have decided upon
the financial statements for the financial year ended on 31 December 2024, to receive share options for a maximum of 10,000 shares
of the Company. |
| |
|
| (c)
Les règles énoncées au paragraphe (a) s’appliquent à partir du 1 juillet 2024, la
rémunération pour la période allant du 1 juillet 2024 au 31 décembre 2024 étant égale
à 50 % de la rémunération visée au paragraphe (a). |
(c) The rules set out in paragraph (a) shall apply as from 1 July 2024, whereby the remuneration for the period from 1 July 2024 until 31 December 2024 shall be 50% of the remuneration referred to in paragraph (a). |
| |
|
| Par souci d’exhaustivité, la rémunération des administrateurs décrite ci-dessus remplace, à partir du 1 juillet 2024, toutes les autres décisions concernant la rémunération des administrateurs approuvées dans le passé par l’assemblée générale des actionnaires, y compris la politique de rémunération approuvée par l’assemblée générale ordinaire des actionnaires tenue le 27 mai 2021. |
For the sake of completeness, the above remuneration of the directors replaces, as from 1 July 2024, all other decisions regarding remuneration of directors approved in the past by the general shareholders’ meeting, including the remuneration policy approved by the ordinary general shareholders’ meeting held on 27 May 2021. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 6/18 |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
ORDRE
DU JOUR
ASSEMBLEE GENERALE EXTRAORDINAIRE |
agenda
extraordinary
general meeting |
| 1.
Communication des rapports - Plan d’Option sur Action de 2024 |
1. Submission
of reports - 2024 Share Option Plan |
| |
|
| Communication et discussion sur : |
Submission of and discussion on: |
| |
|
| a) le rapport du conseil d’administration de la Société, préparé conformément aux articles 7:180 et 7:191 du Code des sociétés et associations relatif à la proposition d’émettre 2.000.000 nouveaux droits de souscription de la Société (les “2024 Share Options”), en vertu d’un plan d’option sur action dénommé “le Plan d’Option sur Action de 2024”, et de supprimer, dans l’intérêt de la Société, le droit de préférence des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription en circulation (share options) de la Société, en faveur des membres du personnel de la Société et de ses filiales de temps à autre, au sens de l’article 1:27 du Code des sociétés et des associations (les “Participants Sélectionnés”); et |
a) the report of the board of directors of the Company, prepared in accordance with articles 7:180 and 7:191 of the Belgian Companies and Associations Code, in relation to the proposal to issue 2,000,000 new subscription rights for shares of the Company (the “2024 Share Options”), pursuant to a share option plan named “the 2024 Share Option Plan”, and to dis-apply, in the interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar as required, of the holders of outstanding subscription rights (share options) of the Company, for the benefit of the members of the personnel of the Company and its subsidiaries from time to time, within the meaning of article 1:27 of the Belgian Companies and Associations Code (the “Selected Participant”); and |
| |
|
| b) le rapport du commissaire de la Société, préparé conformément aux articles 7:180 et 7:191 du Code des sociétés et des associations, concernant la proposition d’émettre 2.000.000 2024 Share Options et de supprimer, dans l’intérêt de la Société, le droit de préférence des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription en circulation (share options) de la Société, en faveur des Participant Sélectionnés. |
b) the report of the statutory auditor of the Company in accordance with articles 7:180 and 7:191 of the Belgian Companies and Associations Code in relation to the proposal to issue 5,000,000 2023 Share Options, and to dis-apply, in the interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar as required, of the holders of outstanding subscription rights (share options) or ADSs of the Company, to the benefit of the Selected Participants. |
| |
|
| 2.
Proposition d’émettre 2.000.000 2024 Share Options |
2. Proposal to issue 2,000,000
2024 Share Options |
| |
|
| ►
Proposition de résolution: |
► Proposed resolution: |
| |
|
| L’assemblée générale des actionnaires décide
d’approuver l’émission de 2.000.000 2024 Share Options, en vertu d’un plan d’option sur action dénommé “le Plan
d’Option sur Action de 2024”, et de supprimer, dans l’intérêt de la Société, le droit de préférence
des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription
en circulation (share options) de la Société, en faveur des Participants Sélectionnés. En conséquence,
le conseil d’administration décide de ce qui suit : |
The general shareholders’ meeting resolves to approve the issuance
of 2,000,000 2024 Share Options, pursuant to a share option plan named the “2024 Share Option Plan”, and to dis-apply, in the
interest of the Company, the preferential subscription right of the existing shareholders of the Company and, insofar as required, of
the holders of outstanding subscription rights (share options) of the Company, for the benefit of Selected Participant. In view thereof,
the general shareholders’ meeting resolves as follows: |
| |
|
| (a) Termes et conditions
des 2024 Share Options : Les termes et conditions des 2024 Share Options (inclus, mais sans s’y limiter, le prix d’exercice des 2024
Share Options) seront tels que figurant dans l’annexe au rapport du conseil d’administration visé au point 1.(a) de l’ordre du
jour (aux fins de la présente résolution, le “Plan”), dont une copie restera jointe procès-verbal constatant
la présente résolution. Les 2024 Share Options ont une durée de 10 ans à partir de leur date d’émission. |
(a) Terms and conditions
of the 2024 Share Options: The terms and conditions of the 2024 Share Options (including, but not limited to, the exercise price of
the 2024 Share Options) shall be as set out in the annex to the report of the board of directors referred to in item 1.(a) of the agenda
(for the purpose of this resolution, the “Plan”), a copy of which shall remain attached to the minutes recording the present
resolution. The 2024 Share Options have a term of ten years as from their issue date. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 7/18 |
| (b) Actions
sous-jacentes : Chaque 2024 Share Option donne à son détenteur le droit de souscrire à une nouvelle action qui
sera émise par la Société. Les nouvelles actions à émettre lors de l’exercice des 2024 Share
Options auront les mêmes droits et avantages, et seront à tous égards pari passu, en ce compris en ce qui concerne
les droits aux dividendes et autres distributions, avec les actions existantes et en circulation de la Société au moment
de leur émission, et auront droit aux dividendes et autres distributions pour lesquelles la date d’enregistrement ou la
date d’échéance tombe à, ou après la date d’émission des nouvelles actions. |
(b) Underlying shares:
Each 2024 Share Option shall entitle the holder thereof to subscribe for one new share to be issued by the Company. The new shares to
be issued at the occasion of the exercise of the 2024 Share Options shall have the same rights and benefits as, and rank pari passu in
all respects, including as to entitlements to dividends and other distributions, with the existing and outstanding shares of the Company
at the moment of their issuance, and will be entitled to dividends and other distributions in respect of which the relevant record date
or due date falls on or after the date of issue of the new shares. |
| |
|
| (c) Suppression
du droit de préférence en faveur des Participants Sélectionnés : L’assemblée générale
des actionnaires décide, conformément à l’article 7:191 du Code des sociétés et des associations,
de supprimer, dans l’intérêt de la Société, le droit de préférence des actionnaires existants
de la Société et, pour autant que de besoin, des détenteurs de droits de souscription en circulation (share options)
de la Société, en faveur des Participants Sélectionnés, et d’approuver la possibilité pour la
Société d’octroyer les 2024 Share Options aux Participants Sélectionnés, comme expliqué plus
en détail dans le rapport du conseil d’administration visé au point 1.(a) de l’ordre du jour et dans les termes
et conditions du Plan. |
(c) Dis-application
of the preferential subscription right for the benefit of the Selected Participants: The general shareholders’ meeting resolves,
in accordance with article 7:191 of the Belgian Companies and Associations Code, to dis-apply, in the interest of the Company, the preferential
subscription right of the existing shareholders of the Company and, insofar as required, of the holders of outstanding subscription rights
(share options) of the Company, for the benefit of the Selected Participants, and to approve the possibility for the Company to grant
the 2024 Share Options to the Selected Participants, as further explained in the report of the board of directors referred to in item
1.(a) of the agenda and the terms and conditions of the Plan. |
| |
|
| (d) Confirmation
de la souscription de 2024 Share Options par la Société : L’assemblée générale des actionnaires
décide d’approuver et de confirmer que la Société sera en mesure de souscrire aux 2024 Share Options, en vue
de créer un pool de 2024 Share Options disponible pour des octrois ultérieurs aux Participants Sélectionnés.
La Société ne peut cependant pas exercer les 2024 Share Options pour son compte propre. |
(d) Confirmation of the
subscription of 2024 Share Options by the Company: The general shareholders’ meeting resolves to approve and confirm that the Company
will be able to subscribe for the 2024 Share Options, with a view to creating a pool of outstanding 2024 Share Options available for further
grants to Selected Participants. The Company may not, however, exercise the 2024 Share Options for its own account. |
| |
|
| (e) Augmentation de capital
conditionnelle et émission de nouvelles actions : L’assemblée générale des actionnaires décide,
sous réserve et dans la mesure de l’exercice des 2024 Share Options, d’augmenter le capital de la Société et d’émettre
le nombre approprié de nouvelles actions pouvant être émises lors de l’exercice des 2024 Share Options. Sous réserve
et conformément aux dispositions du Plan, lors de l’exercice des 2024 Share Options et de l’émission de nouvelles actions,
le montant total du prix d’exercice des 2024 Share Options sera affecté (le cas échéant, après conversion
dans la devise du capital de la Société, sur la base du taux de change USD/EUR publié par la Banque centrale européenne,
comme prévu à la section 5.2 du Plan) au capital de la Société. Dans la mesure où le montant du prix
d’exercice des 2024 Share Options, par action à émettre lors de l’exercice des 2024 Share Options, excède le pair
comptable des actions de la Société existantes alors immédiatement avant l’émission des nouvelles actions
concernées, une partie du prix d’exercice, par action à émettre lors de l’exercice des 2024 Share Options, égale
à ce pair comptable sera comptabilisée en capital, le solde étant comptabilisé en prime d’émission.
Suite à l’augmentation de capital et à l’émission de nouvelles actions, chaque action nouvelle et existante représentera
la même fraction du capital de la Société. |
(e) Conditional
capital increase and issue of new shares: The general shareholders’ meeting resolves, subject to, and to the extent of the
exercise of the 2024 Share Options, to increase the Company’s share capital and to issue the relevant number of new shares issuable
upon the exercise of the 2024 Share Options. Subject to, and in accordance with, the provisions of the Plan, upon exercise of the 2024
Share Options and issue of new shares, the aggregate amount of the exercise price of the 2024 Share Options will be allocated to (as
the case may be, following conversion into the Company’s share capital currency, on the basis of the relevant USD/EUR exchange
ratio as shall be published by the European Central Bank, as provided for in section 5.2 of the Plan) the share capital of the Company.
To the extent that the amount of the exercise price of the 2024 Share Options, per share to be issued upon exercise of the 2024 Share
Options, exceeds the fractional value of the then existing shares of the Company existing immediately prior to the issue of the new shares
concerned, a part of the exercise price, per share to be issued upon exercise of the 2024 Share Options, equal to such fractional value
shall be booked as share capital, whereby the balance shall be booked as issue premium. Following the capital increase and issuance of
new shares, each new and existing share shall represent the same fraction of the share capital of the Company. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 8/18 |
| (f) Prime
d’émission : Toute prime d’émission qui sera comptabilisée en relation avec les 2024 Share Options
sera comptabilisée sur un compte indisponible au passif du bilan de la Société dans ses capitaux propres, et
le compte sur lequel la prime d’émission sera comptabilisée constituera, au même titre que le capital de
la Société, la garantie des tiers et, sauf possibilité de capitalisation de ces réserves, ne pourra être
réduit ou supprimé que par une décision de l’assemblée générale des actionnaires
statuant dans les conditions requises pour la modification des statuts de la Société. |
(f) Issue
premium: Any issue premium that will be booked in connection with the 2024 Share Options shall be accounted for on a non-distributable
account on the liabilities side of the Company’s balance sheet under its net equity, and the account on which the issue premium
will be booked shall, like the share capital, serve as a guarantee for third parties and can only be reduced on the basis of a lawful
resolution of the general shareholders’ meeting passed in the manner required for an amendments to the Company’s articles
of association. |
| |
|
| (g) Procurations
: Le conseil d’administration est autorisé à mettre en œuvre et à exécuter les résolution
adoptées par l’assemblée générale des actionnaires en rapport avec les 2024 Share Options, et à
prendre toutes les mesures et à accomplir toutes les formalités requises en vertu du Plan, des statuts de la Société
et de la loi applicable afin d’émettre ou transférer les actions lors de l’exercice des 2024 Share Options.
En outre, chaque administrateur de la Société, Joe Sollee et Ron Kalfus, chacun agissant individuellement et avec possibilité
de subdélégation et pouvoir de subrogation, auront le pouvoir, lors de l’exercice des 2024 Share Options, (i)
de procéder à la constatation (A) de l’augmentation de capital et de l’émission de nouvelles actions
résultant de cet exercice, (B) de l’allocation du capital et (le cas échéant) de la prime d’émission,
et (C) de la modification des statuts de la Société afin de refléter le nouveau capital et nombre d’actions
en circulation suite à l’exercice des 2024 Share Options, (ii) de signer et remettre, au nom de la Société,
la documentation Euroclear, Computershare, Nasdaq, bancaire et/ou autre pertinente, le registre des actions et tous les autres documents
nécessaires en relation avec l’émission et la délivrance des actions aux Participant Sélectionnés
concernés et l’admission de ces actions à la cotation et à la négociation, et (iii) faire tout
ce qui peut être nécessaire ou utile (y compris, mais sans s’y limiter, la préparation et l’exécution
de tous les documents et formulaires) pour l’admission des actions émises lors de l’exercice des 2024 Share Options
à la négociation sur Nasdaq (ou tout autre marché sur lequel les actions de la Société seront
négociées à ce moment). |
(g) Powers
of attorney: The board of directors is authorised to implement and execute the resolutions passed by the general shareholders’
meeting in connection with the 2024 Share Options, and to take all steps and carry out all formalities that shall be required by
virtue of the Plan, the Company’s articles of association and applicable law in order to issue or transfer the shares upon
exercise of the 2024 Share Options. Furthermore, each of the Company’s directors, Joe Sollee and Ron Kalfus, each such person
acting individually and with possibility of sub-delegation and the power of subrogation, shall have the power, upon exercise of the
2024 Share Options, (i) to proceed with the recording of (A) the capital increase and issue of new shares resulting from such exercise,
(B) the allocation of the share capital and (as applicable) the issue premium, and (C) the amendment of the Company’s articles
of association in order to reflect the new share capital and number of outstanding shares following the exercise of the 2024 Share
Options, (ii) to sign and deliver, on behalf of the Company, the relevant Euroclear, Computershare, Nasdaq, bank and/or other documentation,
the share register and all other necessary documents in connection with the issuance and delivery of the shares to the Selected Participants
concerned and the admission to listing and trading of such shares, and (iii) to do whatever may be necessary or useful (including
but not limited to the preparation and execution of all documents and forms) for the admission of the shares issued upon the exercise
of the 2024 Share Options to trading on Nasdaq (or such other markets on which the Company’s shares will be trading at that
time). |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 9/18 |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| |
|
| 3. Communication des rapports – Warrants d’Exact Sciences |
3.
Submission of reports – Exact Sciences Warrants |
| |
|
| Communication et discussion sur : |
Submission of and discussion on: |
| |
|
(a) le
rapport du conseil d’administration de la Société, préparé conformément aux articles 7:180, 7:191
et 7:193 du Code des sociétés et associations, concernant la proposition d’émettre, en faveur de Genomic Health,
Inc. (une filiale d’Exact Sciences Corporation dénommée ci-après “Exact Sciences”) 1.000.000
de nouveaux droits de souscription pour actions de la Société
(les “Warrants d’Exact Sciences”), et de supprimer, dans l’intérêt de la Société, le
droit de préférence des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs
de droits de souscription en circulation (share options) de la Société, en faveur d’Exact Sciences ; et |
(a) the
report of the board of directors of the Company, prepared in accordance with articles 7:180, 7:191 and 7:193 of the Belgian Companies
and Associations Code, in relation to the proposal to issue, for the benefit of Genomic Health, Inc. (a subsidiary of Exact Sciences
Corporation referred to herein as “Exact Sciences”) 1,000,000 new subscription rights for shares of the Company
(the “Exact Sciences Warrants”), and to dis-apply, in the interest of the Company, the preferential subscription
right of the Company’s existing shareholders and, insofar as required, of the holders of subscription rights (share options) of the
Company, for the benefit of Exact Sciences; and |
|
|
| (b) le
rapport du commissaire de la Société, préparé conformément aux articles 7:180, 7:191 et 7:193
du Code des sociétés et des associations, concernant la proposition d’émettre en faveur d’Exact Sciences 1.000.0000
de Warrants d’Exact Sciences, et de supprimer, dans l’intérêt de la Société, le droit de préférence
des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription
en circulation (share options) de la Société, en faveur d’Exact Sciences. | (b) the
report of the Company’s statutory auditor, prepared in accordance with articles 7:180, 7:191
and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to
issue for the benefit of Exact Sciences 1,000,000 Exact Sciences Warrants, and to dis-apply,
in the interest of the Company, the preferential subscription right of the Company’s existing
shareholders and, insofar as required, of the holders of subscription rights (share options)
of the Company, for the benefit of Exact Sciences. |
|
|
| 4. Proposition d’émettre
1.000.000 de Warrants d’Exact Sciences |
4. Proposal to issue 1,000,000
Exact Sciences Warrants |
| |
|
| ► Proposition de résolution: |
► Proposed resolution: |
| |
|
L’assemblée
générale des actionnaires décide d’approuver l’émission de 1.000.000 de nouveaux droits de
souscription pour actions de la Société, dénommé les “Warrants d’Exact Sciences”, et
de supprimer, dans l’intérêt de la Société, le droit de préférence des actionnaires
existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription en circulation
(share options) de la Société, en faveur des d’Exact Sciences. A cette fin, l’assemblée
générale des actionnaires décide de ce qui suit :
|
The general shareholders’
meeting resolves to approve the issuance of 1,000,000 new subscription rights for shares of the Company, called the “Exact Sciences
Warrants”, and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s existing shareholders
and, insofar as required, of the holders of outstanding subscription rights (share options) of the Company, for the benefit of Exact Sciences.
To this end, the general shareholders’ meeting resolves as follows:
|
| |
|
| (a) Termes
et conditions des droits de souscription : Les termes et conditions des Warrants d’Exact Sciences seront conformes à
l’Annexe A du rapport du conseil d’administration visé au point 3.(a) de l’ordre du jour (aux fins de la
présente résolution, le “Les Termes et Conditions des Warrants d’Exact Sciences”), dont une
copie restera jointe au procès-verbal constatant la présente résolution. Les principaux termes et conditions
des Warrants d’Exact Sciences peuvent, à titre d’information, être résumés comme suit : | (a) Terms
and conditions of the subscription rights: The terms and conditions of the Exact Sciences
Warrants will be in accordance with Annex A of the report of the board of directors referred
to in item 3.(a) of the agenda (for the purposes of this resolution, the “Exact
Sciences Warrants Terms and Conditions”), a copy of which will remain attached
to the minutes recording the present resolution. The main terms and conditions of the Exact
Sciences Warrants can, for information purposes, be summarised as follows: |
| | |
| (i) Droit
de souscrire à une action ordinaire : Chaque Warrant d’Exact Sciences permet à son détenteur de souscrire
à une (1) action ordinaire de la Société à émettre par la Société. | (i) Right
to subscribe for one ordinary share: Each Exact Sciences Warrant entitles the holder to subscribe for one (1) ordinary share of the
Company to be issued by the Company. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 10/18 |
|
(ii) Prix
d’exercice : Le prix d’exercice des Warrants d’Exact Sciences (c’est-à-dire le prix à payer en numéraire pour
souscrire à une nouvelle action de la Société lorsqu’un Warrant Exact Sciences est exercé) sera de USD 5,265.
Le prix d’exercice est sujet à d’éventuels ajustements habituels à la baisse en cas de certaines actions dilutives
de la Société;
(iii) Durée
: Les Warrants d’Exact Sciences auront une durée commençant à partir de leur émission et se terminant
le 22 août 2028 (inclus).
(iv) Possibilité
d’exercice : L’exercice des Warrants d’Exact Sciences sera soumis aux
termes et conditions contenus dans les Termes et Conditions des Warrants d’Exact Sciences.
Les Warrants d’Exact Sciences peuvent être exercés à partir de
leur émission et jusqu’à la fin de leur durée, à condition
qu’un nombre de Warrants d’Exact Sciences avec un prix d’exercice global
d’au moins USD 250.000 soit exercé par leur détenteur.
(v) Cessibilité
: A moins que la Société autorise explicitement la cession des Warrants d’Exact Sciences, les Warrants d’Exact
Sciences ne peuvent pas être cédés par leur détenteur. En outre, les Warrants d’Exact Sciences ne seront
pas admis à la cotation ou à la négociation. |
(ii) Exercise price:
The exercise price of the Exact Sciences Warrants (i.e., the price to be paid in cash to subscribe for one new share in the Company when
an Exact Sciences Warrant is exercised) will be USD 5.265. The exercise price is subject to potential customary downward adjustments
in the case of certain dilutive actions of the Company.
(iii) Term: The Exact
Sciences Warrants will have a term starting as from their issuance and ending on (and including) August 22, 2028.
(iv) Exercisability: The exercise
of the Exact Sciences Warrants will be subject to the terms and conditions contained in the Exact Sciences Warrants Terms and Conditions.
The Exact Sciences Warrants may be exercised as from their issuance and until the end of their term, provided that a number of Exact
Sciences Warrants with an aggregate exercise price of at least USD 250,000 are exercised by the holder thereof.
(v) Transferability:
Except if the Company were to explicitly allow a transfer of the Exact Sciences Warrants, the Exact Sciences Warrants cannot be transferred
by the holder. Furthermore, the Exact Sciences Warrants will not be admitted to listing or trading. |
| |
|
(b) Actions
sous-jacentes : Chaque Warrant d’Exact Sciences donnera à son détenteur le droit de souscrire à une
nouvelle action à émettre par la Société. Les nouvelles actions à émettre lors de l’exercice
des Warrants d’Exact Sciences auront les mêmes droits et avantages, et seront à tous égards pari passu, y compris
en ce qui concerne les droits aux dividendes et autres distributions, avec les actions existantes et en circulation de la Société
au moment de leur émission, et auront droit aux dividendes et autres distributions pour lesquelles la date d’enregistrement
ou la date d’échéance tombe à, ou après leur date d’émission.
|
(b) Underlying
shares: Each Exact Sciences Warrant will entitle its holder to subscribe for one new share to be issued by the Company. The new
shares to be issued upon exercise of the Exact Sciences Warrants shall have the same rights and benefits as, and rank pari passu in
all respects including as to entitlement to dividends and other distributions, with the existing and outstanding shares of the Company
at the moment of their issuance and will be entitled to dividends and other distributions in respect of which the relevant record date
or due date falls on or after the date of their issuance. |
| |
|
(c) Suppression
du droit de préférence en faveur d’Exact Sciences : L’assemblée
générale des actionnaires décide, conformément aux articles 7:191
et 7:193 du Code des sociétés et des associations, de supprimer, dans l’intérêt
de la Société, le droit de préférence des actionnaires existants
de la Société et, pour autant que de besoin, des détenteurs actuels
de droits de souscription (share options) de la Société, en faveur d’Exact
Sciences, comme expliqué dans le rapport du conseil d’administration visé au
point 3.(a) de l’ordre du jour. |
(c) Dis-application
of the preferential subscription right for the benefit of Exact Sciences: The general
shareholders’ meeting resolves, in accordance with articles 7:191 and 7:193 of the Belgian
Companies and Associations Code, to dis-apply, in the interest of the Company, the preferential
subscription right of existing shareholders of the Company and, insofar as required, of the
holders of subscription rights (share options) of the Company, for the benefit of Exact Sciences,
as explained in the report of the board of directors referred to in item 3.(a) of the agenda. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 11/18 |
(d) Augmentation
de capital conditionnelle et émission de nouvelles actions : L’assemblée générale des actionnaires décide,
sous réserve et dans la mesure de l’exercice des Warrants d’Exact Sciences, d’augmenter le capital de la Société
et d’émettre le nombre approprié de nouvelles actions pouvant être émises lors de l’exercice des Warrants d’Exact
Sciences. Sous réserve et conformément aux dispositions des Termes et Conditions des Warrants d’Exact Sciences, lors de
l’exercice des Warrants d’Exact Sciences et de l’émission de nouvelles actions, le prix d’exercice agrégé des Warrants
d’Exact Sciences sera comptabilisé (le cas échéant, après conversion dans la devise du capital de la Société,
sur la base du taux de change USD/EUR publié par la Banque centrale européenne, comme prévu à la section 5.4
des Termes et Conditions des Warrants d’Exact Sciences) en tant que capital de la Société. Dans la mesure où le montant
du prix d’exercice des Warrants d’Exact Sciences, par action à émettre lors de l’exercice des Warrants d’Exact Sciences,
excède le pair comptable des actions de la Société existantes immédiatement avant l’émission des nouvelles
actions concernées, une partie du prix d’exercice, par action à émettre lors de l’exercice des Warrants d’Exact Sciences,
égale à ce pair comptable sera comptabilisée en capital, le solde étant comptabilisé en prime d’émission.
Suite à l’augmentation de capital et à l’émission de nouvelles actions, chaque action nouvelle et existante représentera
la même fraction du capital de la Société.
|
(d) Conditional
capital increase and issue of new shares: The general shareholders’ meeting resolves, subject to and in the case of the exercise
of the Exact Sciences Warrants, to increase the share capital of the Company and to issue the appropriate number of new shares that may
be issued upon exercise of the Exact Sciences Warrants. Subject to, and in accordance with, the respective provisions of the Exact Sciences
Warrants Terms and Conditions, upon exercise of the Exact Sciences Warrants and the issuance of new shares, the aggregate amount of the
exercise price of the Exact Sciences Warrants will be allocated to (as the case may be, following conversion into the Company’s
share capital currency, on the basis of the relevant USD/EUR exchange ratio as shall be published by the European Central Bank, as provided
for in section 5.4 of the Exact Sciences Warrants Terms and Conditions) the share capital of the Company. To the extent that the amount
of the exercise price of the Exact Sciences Warrants, per share to be issued upon exercise of the Exact Sciences Warrants, exceeds the
fractional value of the then existing shares of the Company existing immediately prior to the issue of the new shares concerned, a part
of the exercise price, per share to be issued upon exercise of the Exact Sciences Warrants, equal to such fractional value shall be booked
as share capital, whereby the balance shall be booked as issue premium. Following the capital increase and issuance of new shares, each
new and existing share shall represent the same fraction of the share capital of the Company.
|
| |
|
| (e) Prime
d’émission : Toute prime d’émission qui sera comptabilisée en rapport avec les Warrants d’Exact Sciences (sur
exercice des Warrants d’Exact Sciences ou autrement) sera comptabilisée sur un compte indisponible au passif du bilan de la
Société dans ses capitaux propres, et le compte sur lequel la prime d’émission sera comptabilisée constituera,
au même titre que le capital de la Société, la garantie des tiers et, sauf possibilité de capitalisation
de ces réserves, ne pourra être réduit ou supprimé que par une décision de l’assemblée générale
des actionnaires statuant dans les conditions requises pour la modification des statuts de la Société. |
(e) Issue
premium: Any issue premium that will be booked in connection with the Exact Sciences Warrants (whether upon exercise of the Exact
Sciences Warrants, or otherwise) will be accounted for on a non-distributable account on the liabilities side of the Company’s
balance sheet under its net equity, and the account on which the issue premium will be booked shall, like the share capital, serve as
a guarantee for third parties and can only be reduced on the basis of a lawful resolution of the general shareholders’ meeting
passed in the manner required for an amendments to the Company’s articles of association.
|
| |
|
| (f) Procurations:
Le conseil d’administration est autorisé à mettre en œuvre et à exécuter les résolutions
adoptés par l’assemblée générale des actionnaires en rapport avec les Warrants d’Exact Sciences, et
à prendre toutes les mesures et à accomplir toutes les formalités qui seront requises en vertu des Termes et
Conditions des Warrants d’Exact Sciences, des statuts de la Société
et des lois applicables afin d’émettre ou transférer les actions lors de l’exercice des Warrants d’Exact Sciences. En outre,
chaque administrateur de la Société, Joe Sollee et Ron Kalfus, chacun agissant individuellement et avec possibilité
de subdélégation et pouvoir de subrogation, auront le pouvoir, lors de l’exercice des Warrants d’Exact Sciences, (i) de
procéder à la constatation (A) de l’augmentation de capital et de l’émission de nouvelles actions résultant
de cet exercice, (B) de la comptabilisation en tant que capital et (le cas échéant) prime d’émission, et (C) de la
modification des statuts de la Société afin de refléter le nouveau capital et nombre d’actions en circulation suite
à l’exercice des Warrants d’Exact Sciences, (ii) de signer et remettre, au nom de la Société, la documentation Euroclear,
Computershare, Nasdaq, bancaire et/ou autre pertinente, le registre des actions et tous les autres documents nécessaires en relation
avec l’émission et la délivrance des actions au bénéficiaire et l’admission de ces actions à la cotation
et à la négociation, et (iii) faire tout ce qui peut être nécessaire ou utile (y compris, mais sans s’y limiter,
la préparation et l’exécution de tous les documents et formulaires) pour l’admission des actions émises lors de l’exercice
des Warrants d’Exact Sciences à la négociation sur le Nasdaq (ou tout autre marché sur lequel les actions de la Société
seront alors négociées à ce moment). |
(f) Powers
of attorney: The board of directors is authorised to implement and execute the resolutions
adopted by the general shareholders’ meeting in connection with the Exact Sciences
Warrants, and to take all measures and carry out all formalities that will be required pursuant
to the Exact Sciences Warrants Terms and Conditions, the Company’s articles of association
and all applicable laws in order to issue or transfer the shares upon exercise of the Exact
Sciences Warrants. In addition, each director of the Company, Joe Sollee and Ron Kalfus,
each such person acting individually and with the possibility of sub-delegation and power
of subrogation, shall have the power, upon exercise of the Exact Sciences Warrants, (i) to
proceed with the recording of (A) the capital increase and the issue of new shares resulting
from such exercise, (B) the allocation as share capital and (if applicable) as issue premium,
and (C) the amendment of the Company’s articles of association to reflect the new share
capital and number of shares outstanding following the exercise of the Exact Sciences Warrants
(ii) to sign and deliver, on behalf of the Company, the relevant Euroclear, Computershare,
Nasdaq and/or bank documentation, the share register and all other necessary documents in
connection with the issuance and delivery of the shares to the beneficiary and the admission
to listing and trading of such shares, and (iii) to do whatever may be necessary or useful
(including, but not limited to, the preparation and execution of all documents and forms)
for the admission of the shares issued upon exercise of the Exact Sciences Warrants to trading
on Nasdaq (or any other market on which the Company’s shares will then be traded).
|
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 12/18 |
| ► Instruction de vote: |
► Voting instruction: |
| 0 Pour / For |
0 Contre / Against |
0 Abstention |
| |
|
| 5. Communication des rapports - Warrants d’OrbiMed |
5. Submission of reports - OrbiMed Warrants |
| |
|
| Communication et discussion sur : |
Submission of and discussion on: |
| |
|
(a) le rapport du
conseil d’administration de la Société, préparé conformément aux articles 7:180, 7:191 et 7:193 du
Code des sociétés et associations, concernant la proposition d’émettre, en faveur de OrbiMed Royalty & Credit
Opportunities IV, LP et OrbiMed Royalty & Credit Opportunities IV Offshore, LP (ensemble dénommés ci-après “OrbiMed”)
1.243.060 nouveaux droits de souscription pour actions de la Société (de ces 1.243.060 nouveaux droits de souscription pour
actions, 881.906 nouveaux droits de souscription pour actions à émettre en faveur d’OrbiMed Royalty & Credit Opportunities
IV, LP et 361.154 nouveaux droits de souscription pour actions à émettre en faveur d’OrbiMed Royalty & Credit Opportunities
IV Offshore, LP), ayant une durée de 5 ans à partir de leur date d’émission, (les “Warrants d’OrbiMed”),
et de supprimer, dans l’intérêt de la Société, le droit de préférence des actionnaires existants
de la Société et, pour autant que de besoin, des détenteurs de droits de souscription en circulation (share options)
de la Société, en faveur d’OrbiMed ; et
|
(a) the report of
the board of directors of the Company, prepared in accordance with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations
Code, in relation to the proposal to issue, for the benefit of OrbiMed Royalty & Credit Opportunities IV, LP and OrbiMed Royalty &
Credit Opportunities IV Offshore, LP (together referred to herein as “OrbiMed”) 1,243,060 new subscription rights for
shares of the Company (of those 1,243,060 new subscription rights for shares, 881,906 new subscription rights for shares to be issued
for the benefit of OrbiMed Royalty & Credit Opportunities IV, LP and 361,154 new subscription rights for shares to be issued for the
benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP), with a term of 5 years as from their issue date (the “OrbiMed
Warrants”), and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s existing shareholders
and, insofar as required, of the holders of subscription rights (share options) of the Company, for the benefit of OrbiMed; and
|
| |
|
(b) le rapport du
commissaire de la Société, préparé conformément aux articles 7:180, 7:191 et 7:193 du Code des sociétés
et des associations, concernant la proposition d’émettre en faveur d’OrbiMed 1.243.060 Warrants d’OrbiMed, et de supprimer, dans
l’intérêt de la Société, le droit de préférence des actionnaires existants de la Société
et, pour autant que de besoin, des détenteurs de droits de souscription en circulation (share options) de la Société,
en faveur d’OrbiMed.
|
(b) the report of the Company’s statutory auditor, prepared in accordance
with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations Code, in relation to the proposal to issue for the benefit
of OrbiMed 1,243,060 OrbiMed Warrants, and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s
existing shareholders and, insofar as required, of the holders of subscription rights (share options) of the Company, for the benefit
of OrbiMed. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 13/18 |
| 6. Proposition déemettre 1.243.060 Warrants d’OrbiMed |
6. Proposal to issue 1,243,060 OrbiMed Warrants |
| |
|
| ► Proposition de résolution: |
► Proposed resolution: |
| |
|
L’assemblée
générale des actionnaires décide d’approuver l’émission de 1.243.060 nouveaux droits de souscription pour
actions de la Société, ayant une durée de 5 ans à partir de leur date d’émission, dénommés
les “Warrants d’OrbiMed”, et de supprimer, dans l’intérêt de la Société, le droit de préférence
des actionnaires existants de la Société et, pour autant que de besoin, des détenteurs de droits de souscription
en circulation (share options) de la Société, en faveur de chacun d’OrbiMed Royalty & Credit Opportunities IV, LP et
OrbiMed Royalty & Credit Opportunities IV Offshore, LP. A cette fin, l’assemblée générale des actionnaires décide
de ce qui suit :
|
The general shareholders’ meeting resolves to approve the issuance
of 1,243,060 new subscription rights for shares of the Company, with a term of 5 years as from their issue date, called the “OrbiMed
Warrants”, and to dis-apply, in the interest of the Company, the preferential subscription right of the Company’s existing shareholders
and, insofar as required, of the holders of subscription rights (share options) of the Company, for the benefit of each of OrbiMed Royalty
& Credit Opportunities IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP. To this end, the general shareholders’
meeting resolves as follows: |
| |
|
(a) Termes
et conditions des droits de souscription : Les termes et conditions des Warrants d’OrbiMed seront conformes à l’annexe A du
rapport du conseil d’administration visé au point 5.(a) de l’ordre du jour (aux fins de la présente résolution,
le “Les Termes et Conditions des Warrants d’OrbiMed”), dont une copie restera jointe au procès-verbal constatant la
présente résolution. Les principaux termes et conditions des Warrants d’OrbiMed peuvent, à titre d’information,
être résumés comme suit :
|
(a) Terms
and conditions of the subscription rights: The terms and conditions of the OrbiMed Warrants will be in accordance with Annex
A of the report of the board of directors referred to in item 5.(a) of the agenda (for the purposes of this resolution, the “OrbiMed
Warrants Terms and Conditions”), a copy of which will remain attached to the minutes recording the present resolution. The main
terms and conditions of the OrbiMed Warrants can, for information purposes, be summarised as follows: |
(i) Droit
de souscrire à une action ordinaire : Chaque Warrant d’OrbiMed permet à son détenteur de souscrire à
une (1) action ordinaire de la Société à émettre par la Société.
(ii) Prix
d’exercice : Le prix d’exercice des Warrants d’OrbiMed (c’est-à-dire le prix à payer en numéraire pour souscrire
à une nouvelle action de la Société lorsqu’un Warrant d’OrbiMed est exercé) sera de USD 2,4134. Le prix d’exercice
est sujet à d’éventuels ajustements habituels à la baisse en cas de certaines actions dilutives de la Société.
(iii) Prix de souscription
: Le prix de souscription des 881.906 Warrants d’OrbiMed à émettre en faveur d’OrbiMed Royalty & Credit Opportunities
IV, LP sera de USD 1.744.485,56 et le prix de souscription des 361.154 Warrants d’OrbiMed à émettre en faveur d’OrbiMed
Royalty & Credit Opportunities IV Offshore, LP sera de USD 714.394,11. Le prix d’émission doit être payé pour
la souscription des Warrants d’OrbiMed respectifs par OrbiMed Royalty & Credit Opportunities IV, LP et OrbiMed Royalty & Credit
Opportunities IV Offshore, LP, respectivement. Le prix de souscription sera comptabilisé en tant que prime d’émission (conformément
ce qui est indiqué au paragraphe (d) ci-dessous).
|
(i) Right
to subscribe for one ordinary share: Each OrbiMed Warrant entitles its holder to subscribe for one (1) ordinary share of the Company
to be issued by the Company.
(ii) Exercise price: The exercise price of the OrbiMed Warrants (i.e., the price
to be paid in cash to subscribe for one new share in the Company when an OrbiMed Warrant is exercised) will be USD 2.4134. The exercise
price is subject to potential customary downward adjustments in the case of certain dilutive actions of the Company.
(iii) Subscription
price: The subscription price for the 881,906 OrbiMed Warrants to be issued for the benefit of OrbiMed Royalty
& Credit Opportunities IV, LP will be USD 1,744,485.56, and the subscription price for the 361,154 OrbiMed
Warrants to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP will be
USD 714,394.11. The subscription price shall be booked as issue premium (in accordance with what is stated in
paragraph (d) below).
|
| (iv) Durée
: Les Warrants d’OrbiMed auront une durée de 5 ans à partir de leur date d’émission. |
(iv) Term:
The OrbiMed Warrants will have a term of 5 years as from their issue date.
|
| |
|
(v) Possibilité
d’exercice : L’exercice des Warrants d’OrbiMed sera soumis aux termes et conditions contenus
dans les Termes et Conditions des Warrants d’OrbiMed. Les Warrants d’OrbiMed peuvent être
exercés à partir de leur émission et jusqu’à la fin de leur durée.
|
(v) Exercisability:
The exercise of the OrbiMed Warrants will be subject to the terms and conditions contained in the OrbiMed
Warrants Terms and Conditions. The OrbiMed Warrants may be exercised as from their issuance and until the end
of their term.
|
| |
|
| |
|
| (vi) Cessibilité
: Les Warrants OrbidMed et tous les droits qui en découlent sont cessibles, en tout ou en partie, par leur détenteur
concerné conformément aux Termes et Conditions des Warrants OrbidMed. | (vi) Transferability:
The OrbiMed Warrants and all rights thereunder are transferable, in whole or in part, by the relevant holder in accordance with the
OrbiMed Warrants Terms and Conditions. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 14/18 |
(b) Actions
sous-jacentes : Chaque Warrant d’OrbiMed donnera à son détenteur le droit de souscrire à une nouvelle
action à émettre par la Société. Les nouvelles actions à émettre lors de l’exercice des
Warrants d’OrbiMed auront les mêmes droits et avantages, et seront à tous égards pari passu, y compris en ce
qui concerne les droits aux dividendes et autres distributions, avec les actions existantes et en circulation de la Société
au moment de leur émission, et auront droit aux dividendes et autres distributions pour lesquelles la date d’enregistrement
ou la date d’échéance tombe à, ou après leur date d’émission.
|
(b) Underlying shares: Each
OrbiMed Warrant will entitle its holder to subscribe for one new share to be issued by the Company. The new shares to be issued upon
exercise of the OrbiMed Warrants shall have the same rights and benefits as, and rank pari passu in all respects including as to entitlements
to dividends and other distributions, with the existing and outstanding shares of the Company at the moment of their issuance and will
be entitled to dividends and other distributions in respect of which the relevant record date or due date falls on or after the date
of their issuance. |
| |
|
| (c) Suppression
du droit de préférence en faveur d’OrbiMed : L’assemblée générale des actionnaires décide,
conformément aux articles 7:191 et 7:193 du Code des sociétés et des associations, de supprimer, dans l’intérêt
de la Société, le droit de préférence des actionnaires existants de la Société et, pour autant
que de besoin, des détenteurs de droits de souscription (share options) de la Société, en faveur de chacun d’OrbiMed
Royalty & Credit Opportunities IV, LP et OrbiMed Royalty & Credit Opportunities IV Offshore, LP., comme expliqué dans
le rapport du conseil d’administration visé au point 5.(a) de l’ordre du jour. |
(c) Dis-application
of the preferential subscription right for the benefit of OrbiMed: The general shareholders’ meeting resolves, in accordance
with articles 7:191 and 7:193 of the Belgian Companies and Associations Code, to dis-apply, in the interest of the Company, the preferential
subscription right of the existing shareholders of the Company and, insofar as required, of the holders of subscription rights (share
options) of the Company, for the benefit of each of OrbiMed Royalty & Credit Opportunities IV, LP and OrbiMed Royalty & Credit
Opportunities IV Offshore, LP, as explained in the report of the board of directors referred to in item 5.(a) of the agenda.
|
| |
|
(d) Augmentation
de capital conditionnelle et émission de nouvelles actions : L’assemblée générale des actionnaires décide,
sous réserve et dans la mesure de l’exercice des Warrants d’OrbiMed, d’augmenter le capital de la Société et d’émettre
le nombre approprié de nouvelles actions pouvant être émises lors de l’exercice des Warrants d’OrbiMed. Sous réserve
et conformément aux dispositions des Termes et Conditions des Warrants d’OrbiMed, lors de l’exercice des Warrants d’OrbiMed et
de l’émission de nouvelles actions, le prix d’exercice agrégé des Warrants d’OrbiMed sera comptabilisé (le
cas échéant, après conversion dans la devise du capital de la Société, sur la base du taux de change
USD/EUR publié par la Banque centrale européenne, comme prévu à la section 4(b) des Termes et Conditions des
Warrants d’OrbiMed) en tant que capital de la Société. Dans la mesure où le montant du prix d’exercice des Warrants
d’OrbiMed, par action à émettre lors de l’exercice des Warrants d’OrbiMed, excède le pair comptable des actions de
la Société existantes immédiatement avant l’émission des nouvelles actions concernées, une partie du
prix d’exercice, par action à émettre lors de l’exercice des Warrants d’OrbiMed, égale à ce pair comptable
sera comptabilisée en capital, le solde étant comptabilisé en prime d’émission. Suite à l’augmentation
de capital et à l’émission de nouvelles actions, chaque action nouvelle et existante représentera la même fraction
du capital de la Société.
|
(d) Conditional
capital increase and issue of new shares: The general shareholders’ meeting resolves, subject to and in the case of the exercise
of the OrbiMed Warrants, to increase the share capital of the Company and to issue the appropriate number of new shares that may be issued
upon exercise of the OrbiMed Warrants. Subject to, and in accordance with, the respective provisions of the OrbiMed Warrants Terms and
Conditions, upon exercise of the OrbiMed Warrants and the issuance of new shares, the aggregate amount of the exercise price of the OrbiMed
Warrants will be allocated to (as the case may be, following conversion into the Company’s share capital currency, on the basis
of the relevant USD/EUR exchange ratio as shall be published by the European Central Bank, as provided for in in section 4(b) of the
OrbiMed Warrants Terms and Conditions) the share capital of the Company. To the extent that the amount of the exercise price of the OrbiMed
Warrants, per share to be issued upon exercise of the OrbiMed Warrants, exceeds the fractional value of the then existing shares of the
Company existing immediately prior to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon
exercise of the OrbiMed Warrants, equal to such fractional value shall be booked as share capital, whereby the balance shall be booked
as issue premium. Following the capital increase and issuance of new shares, each new and existing share shall represent the same fraction
of the share capital of the Company.
|
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 15/18 |
(e) Prime d’émission
: Toute prime d’émission qui sera comptabilisée en rapport avec les Warrants d’OrbiMed (sur exercice des Warrants d’OrbiMed
ou autrement) sera comptabilisée sur un compte indisponible au passif du bilan de la Société dans ses capitaux propres,
et le compte sur lequel la prime d’émission sera comptabilisée constituera, au même titre que le capital de la Société,
la garantie des tiers et, sauf possibilité de capitalisation de ces réserves, ne pourra être réduit ou supprimé
que par une décision de l’assemblée générale des actionnaires statuant dans les conditions requises pour la
modification des statuts de la Société.
|
(e) Issue premium:
Any issue premium that will be booked in connection with the OrbiMed Warrants (whether as subscription price, upon exercise of the OrbiMed
Warrants, or otherwise) will be accounted for on a non-distributable account on the liabilities side of the Company’s balance sheet under
its net equity, and the account on which the issue premium will be booked shall, like the share capital, serve as a guarantee for third
parties and can only be reduced on the basis of a lawful resolution of the general shareholders’ meeting passed in the manner required
for an amendments to the Company’s articles of association.
|
| |
|
(f) Procurations
: Le conseil d’administration est autorisé à mettre en œuvre et à exécuter les résolutions
adoptées par l’assemblée générale des actionnaires en rapport avec les Warrants d’OrbiMed, et
à prendre toutes les mesures et à accomplir toutes les formalités qui seront requises en vertu des Termes et Conditions
des Warrants d’OrbiMed, des statuts de la Société et des lois applicables afin d’émettre ou transférer
les actions lors de l’exercice des Warrants d’OrbiMed. En outre, chaque administrateur de la Société, Joe Sollee
et Ron Kalfus, chacun agissant individuellement et avec possibilité de subdélégation et pouvoir de subrogation,
auront le pouvoir, lors de l’exercice des Warrants d’OrbiMed, (i) de procéder à la constatation (A) de l’augmentation
de capital et de l’émission de nouvelles actions résultant de cet exercice, (B) de la comptabilisation en tant que
capital et (le cas échéant) prime d’émission, et (C) de la modification des statuts de la Société
afin de refléter le nouveau capital et nombre d’actions en circulation suite à l’exercice des Warrants d’OrbiMed,
(ii) de signer et remettre, au nom de la Société, la documentation Euroclear, Computershare, Nasdaq, bancaire et/ou autre
pertinente, le registre des actions et tous les autres documents nécessaires en relation avec l’émission et la délivrance
des actions au bénéficiaire et l’admission de ces actions à la cotation et à la négociation,
et (iii) faire tout ce qui peut être nécessaire ou utile (y compris, mais sans s’y limiter, la préparation
et l’exécution de tous les documents et formulaires) pour l’admission des actions émises lors de l’exercice
des Warrants d’OrbiMed à la négociation sur le Nasdaq (ou tout autre marché sur lequel les actions de la Société
seront alors négociées à ce moment).
|
(f) Powers of attorney:
The board of directors is authorised to implement and execute the resolutions adopted by the general shareholders’ meeting in connection
with the OrbiMed Warrants, and to take all measures and carry out all formalities that will be required pursuant to the OrbiMed Warrants
Terms and Conditions, the Company’s articles of association and all applicable laws in order to issue or transfer the shares upon exercise
of the OrbiMed Warrants. In addition, each director of the Company, Joe Sollee and Ron Kalfus, each such person acting individually and
with the possibility of sub-delegation and power of subrogation, shall have the power, upon exercise of the OrbiMed Warrants, (i) to proceed
with the recording of (A) the capital increase and the issue of new shares resulting from such exercise, (B) the allocation as share capital
and (if applicable) as issue premium, and (C) the amendment of the Company’s articles of association to reflect the new share capital
and number of shares outstanding following the exercise of the OrbiMed Warrants (ii) to sign and deliver, on behalf of the Company, the
relevant Euroclear, Computershare, Nasdaq and/or bank documentation, the share register and all other necessary documents in connection
with the issuance and delivery of the shares to the beneficiary and the admission to listing and trading of such shares, and (iii) to
do whatever may be necessary or useful (including, but not limited to, the preparation and execution of all documents and forms) for the
admission of the shares issued upon exercise of the OrbiMed Warrants to trading on Nasdaq (or any other market on which the Company’s
shares will then be traded). |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 16/18 |
| ►
Instruction de vote: |
►
Voting instruction: |
| 0
Pour / For |
0
Contre / Against |
1
Abstention |
| II. Si les assemblées générales ordinaire et/ou extraordinaire des actionnaires sont ajournées ou suspendues, le mandataire spécial aura les pouvoirs de représenter le soussigné aux assemblées générales des actionnaires qui seront tenues avec le même ordre du jour, le cas échéant (étant entendu que, par rapport aux points susmentionnés de l’ordre du jour de l’assemblée générale extraordinaire des actionnaires, les votes susmentionnés s’appliqueront en tout état de cause également à la deuxième assemblée générale extraordinaire des actionnaires qui serait convoquée avec un ordre du jour identique à celui de la première assemblée générale extraordinaire des actionnaires dans le cas où le quorum de présence légalement requis pour délibérer et voter valablement sur ces points de l’ordre du jour n’aurait pas été atteint lors de la première assemblée générale extraordinaire des actionnaires): |
II. In case the aforementioned ordinary and/or extraordinary general shareholders’ meetings would be postponed or suspended, the special proxy holder shall have the power to represent the undersigned at the general shareholders’ meetings that would be held having the same agenda, as relevant (it being understood that, in relation to the aforementioned agenda items on the agenda of the extraordinary general shareholders’ meeting, the aforementioned votes will in any event also apply to the second extraordinary general shareholders’ meeting which would be convened with an agenda identical to the agenda of the first extraordinary general shareholders’ meeting in case the legally required attendance quorum to validly deliberate and resolve on such agenda items would not be reached during the first extraordinary general shareholders’ meeting): |
| |
|
| ☐ oui |
☐ yes |
| ☐ non |
☐ no |
| |
|
| Veuillez remplir la case appropriée. Une absence d’instruction ou si, pour quelque raison, il y a une absence de clarté à propos de l’instruction donnée, le soussigné sera supposé avoir choisi “oui”. Veuillez noter qu’aux fins de s’appliquer à telle assemblée subséquente, les titulaires de titres doivent s’enregistrer à nouveau pour cette assemblée. |
Please tick the appropriate box. In the absence of an instruction, or if, for whatever reason, there is a lack of clarity with regard to the instruction given, the undersigned shall be deemed to have selected “yes”. Please note that in order to apply for such subsequent meeting, holders of securities must again register for such meeting. |
| |
|
| Si, pendant les assemblées, il y a des modifications à une proposition de résolution ou une nouvelle proposition de résolution:1 |
In case of amendments during the meetings to a proposed resolution or a new proposed resolution:1 |
| |
|
| ☐ le mandataire spécial votera pour la résolution modifiée ou nouvelle |
☐ the proxy holder shall vote for the amended or new resolution |
| ☐ le mandataire spécial votera contre la résolution modifiée ou nouvelle |
☐ the proxy holder shall vote against the amended or new resolution |
| ☐ le mandataire spécial s’abstiendra de voter sur la résolution modifiée ou nouvelle |
☐ the proxy holder shall abstain from the vote on the amended or new resolution |
| ☐ le mandataire spécial votera sur la résolution modifiée ou nouvelle selon la manière supportée ou recommandée par le conseil d’administration de la Société |
☐ the proxy holder shall vote on the amended or new resolution in the manner supported or recommended by the board of directors of the Company |
| |
|
| 1
Veuillez cocher tel qu’approprié. Une absence d’instruction sera interprétée comme une instruction de
voter pour la résolution modifiée ou nouvelle selon la manière supportée ou recommandée par le
conseil d’administration de la Société. |
1 Please complete as appropriate. An absence of instruction shall
be tantamount to an instruction to vote for the amended or new resolution as will be supported or recommended by the board of directors
of the Company. |
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 17/18 |
| III. Le mandataire spécial est autorisé, au nom et pour le compte du soussigné, à signer toutes listes de présence et procès-verbaux, à participer à toutes les délibérations, à prendre part au vote sur toutes les décisions ou sujets pouvant, conformément à cet ordre du jour, être soumis à l’assemblée. |
III. The special proxy holder has the power to, in the name of and on behalf of the undersigned, sign all attendance lists and minutes, participate in all deliberations, vote with respect to all decisions or items that can, pursuant to this agenda, be presented to said meetings. |
| |
|
IV. Le mandataire spécial est autorisé, en général, à faire tout ce qui semble nécessaire et/ou utile pour exercer cette procuration.
Le/la
soussigné(e) ratifie et approuve par la présente tous les actes accomplis par le mandataire spécial susmentionné.
Le mandataire spécial votera pour le compte du/de la soussigné(s) conformément aux instructions spécifiques
données ci-dessus.
La présente
procuration vaut également notification conformément aux formalités décrites dans l’invitation aux assemblées
générales ordinaire et extraordinaire des actionnaires de la Société à tenir le jeudi 30 mai 2024,
à condition qu’elle soit dûment complétée par le soussigné et reçue par la Société
au plus tard à la Date limite de Notification.
Le soussigné
confirme que la traduction anglaise de la présente procuration n’est qu’une traduction libre en anglais et à titre informatif
uniquement, et que la version française prévaut sur la version anglaise. |
IV. In general, the special proxy holder has the power to do all that appears necessary and/or useful for the exercise of this proxy.
The undersigned hereby ratifies and
approves all acts carried out by the aforementioned proxy holder. The special proxy holder will vote on behalf of the undersigned in
accordance with the specific instructions given above.
The present proxy shall also serve as notification in accordance with the
formalities described in the notice convening the ordinary and extraordinary general shareholders’ meetings of the Company to be held
on Thursday 30 May 2024, provided it is duly completed by the undersigned and received by the Company at the latest on the Notification
Deadline.
The undersigned confirms that the English translation of the present proxy is a free English translation and for information
purposes only, and that the French version shall prevail over the English version. |
| |
|
| BON POUR PROCURATION |
GOOD FOR PROXY |
_______________________________2024
(date)
_______________________________________
(nom
/ name)
_______________________________________
(signature)
| Assemblée Générale Ordinaire et Extraordinaire des Actionnaires de MDxHealth SA - Procuration | |
| Ordinary and Extraordinary General Shareholders’ Meetings of MDxHealth SA - Proxy | 18/18 |
Exhibit 99.5
MDxHealth SA
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of profit or loss
Thousands of $ (except per share amounts)
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Services | |
4 | |
| 69,965 | | |
| 36,965 | | |
| 21,937 | |
| Royalties and other revenues | |
4 | |
| 228 | | |
| 89 | | |
| 302 | |
| Revenues | |
| |
| 70,193 | | |
| 37,054 | | |
| 22,239 | |
| Cost of sales (exclusive of amortization of intangible assets) | |
4 | |
| (26,264 | ) | |
| (17,835 | ) | |
| (11,675 | ) |
| Gross profit | |
| |
| 43,929 | | |
| 19,219 | | |
| 10,564 | |
| Research and development expenses | |
5 | |
| (6,376 | ) | |
| (5,497 | ) | |
| (5,589 | ) |
| Selling and marketing expenses | |
5 | |
| (36,915 | ) | |
| (25,704 | ) | |
| (17,452 | ) |
| General and administrative expenses | |
5 | |
| (23,010 | ) | |
| (23,308 | ) | |
| (13,915 | ) |
| Amortization of intangible assets | |
5 | |
| (4,494 | ) | |
| (3,169 | ) | |
| (1,610 | ) |
| Other operating (expense) income, net | |
7 | |
| (461 | ) | |
| 559 | | |
| 1,161 | |
| Operating loss | |
| |
| (27,327 | ) | |
| (37,900 | ) | |
| (26,841 | ) |
| Financial income | |
8 | |
| 2,570 | | |
| 241 | | |
| 11 | |
| Financial expenses | |
8 | |
| (18,342 | ) | |
| (6,385 | ) | |
| (2,172 | ) |
| Loss before income tax | |
| |
| (43,099 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| Income tax | |
9 | |
| (1 | ) | |
| 0 | | |
| 0 | |
| Loss for the year | |
| |
| (43,100 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| | |
| |
| | | |
| | | |
| | |
| Loss per share attributable to parent | |
| |
| | | |
| | | |
| | |
| Basic and diluted, $ | |
20 | |
| (1.66 | ) | |
| (2.78 | ) | |
| (2.38 | ) |
Consolidated statement of comprehensive income
Thousands of $
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Loss for the year | |
| |
| (43,100 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| | |
| |
| | | |
| | | |
| | |
| Other comprehensive income (loss) | |
| |
| | | |
| | | |
| | |
| Items that will be reclassified to profit or loss: | |
| |
| | | |
| | | |
| | |
| Exchange differences arising from translation of foreign operations | |
| |
| (149 | ) | |
| 593 | | |
| 264 | |
| Total other comprehensive income (loss) | |
| |
| (149 | ) | |
| 593 | | |
| 264 | |
| Total comprehensive loss for the year (net of tax) | |
| |
| (43,249 | ) | |
| (43,451 | ) | |
| (28,738 | ) |
Consolidated statement of financial position
Thousands of $ For the years ended December 31 | |
Notes | |
2023 | | |
2022 | |
| ASSETS | |
| |
| | | |
| | |
| Non-current assets | |
| |
| | | |
| | |
| Goodwill | |
3/10 | |
| 35,926 | | |
| 35,926 | |
| Intangible assets | |
11 | |
| 44,337 | | |
| 46,166 | |
| Property, plant and equipment | |
12 | |
| 4,956 | | |
| 3,791 | |
| Right-of-use assets | |
12 | |
| 4,989 | | |
| 4,103 | |
| Financial assets | |
| |
| 763 | | |
| - | |
| Total non-current assets | |
| |
| 90,971 | | |
| 89,986 | |
| | |
| |
| | | |
| | |
| Current assets | |
| |
| | | |
| | |
| Inventories | |
13 | |
| 2,779 | | |
| 2,327 | |
| Trade receivables | |
14/19 | |
| 11,088 | | |
| 9,357 | |
| Prepaid expenses and other current assets | |
14 | |
| 1,914 | | |
| 1,962 | |
| Cash and cash equivalents | |
15/19 | |
| 22,380 | | |
| 15,503 | |
| Total current assets | |
| |
| 38,161 | | |
| 29,149 | |
| TOTAL ASSETS | |
| |
| 129,132 | | |
| 119,135 | |
| | |
| |
| | | |
| | |
| EQUITY | |
| |
| | | |
| | |
| Share capital | |
22 | |
| 173,931 | | |
| 133,454 | |
| Issuance premium | |
22 | |
| 153,177 | | |
| 153,177 | |
| Accumulated deficit | |
| |
| (331,446 | ) | |
| (288,346 | ) |
| Share-based compensation | |
24 | |
| 12,139 | | |
| 11,474 | |
| Translation reserve | |
| |
| (593 | ) | |
| (444 | ) |
| Total equity | |
| |
| 7,208 | | |
| 9,315 | |
| | |
| |
| | | |
| | |
| LIABILITIES | |
| |
| | | |
| | |
| Non-current liabilities | |
| |
| | | |
| | |
| Loans and borrowings | |
16/19 | |
| 35,564 | | |
| 34,914 | |
| Lease liabilities | |
16 | |
| 3,578 | | |
| 3,091 | |
| Other non-current financial liabilities | |
16/19 | |
| 63,259 | | |
| 53,537 | |
| Total non-current liabilities | |
| |
| 102,401 | | |
| 91,542 | |
| | |
| |
| | | |
| | |
| Current liabilities | |
| |
| | | |
| | |
| Loans and borrowings | |
16/19 | |
| 643 | | |
| 616 | |
| Lease liabilities | |
16 | |
| 1,480 | | |
| 1,172 | |
| Trade payables | |
18/19 | |
| 8,811 | | |
| 10,178 | |
| Other current liabilities | |
18 | |
| 5,694 | | |
| 3,985 | |
| Other current financial liabilities | |
16/19 | |
| 2,895 | | |
| 2,327 | |
| Total current liabilities | |
| |
| 19,523 | | |
| 18,278 | |
| Total liabilities | |
| |
| 121,924 | | |
| 109,820 | |
| TOTAL EQUITY AND LIABILITIES | |
| |
| 129,132 | | |
| 119,135 | |
Consolidated statement of changes in equity
| | |
Attributable to owners of mdxhealth sa | |
Thousands of $
(except number of shares) | |
Number of
shares | | |
Share capital
& issuance premium | | |
Accumulated
Deficit | | |
Share-based
compensation | | |
Translation
reserve | | |
Total equity | |
| Notes | |
| | | |
| 22 | | |
| | | |
| 24 | | |
| | | |
| | |
| Balance at January 1, 2021 | |
| 9,069,145 | | |
| 213,065 | | |
| (215,300 | ) | |
| 9,385 | | |
| (1,301 | ) | |
| 5,849 | |
| Loss for the year | |
| | | |
| | | |
| (29,002 | ) | |
| | | |
| | | |
| (29,002 | ) |
| Other comprehensive income | |
| | | |
| | | |
| | | |
| | | |
| 264 | | |
| 264 | |
| Total comprehensive income for the year | |
| | | |
| | | |
| (29,002 | ) | |
| | | |
| 264 | | |
| (28,738 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Transactions with owners in their capacity as owners: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Issuance of shares, net of transaction costs | |
| 6,527,777 | | |
| 68,566 | | |
| | | |
| | | |
| | | |
| 68,566 | |
| Share-based compensation costs | |
| | | |
| | | |
| | | |
| 1,222 | | |
| | | |
| 1,222 | |
| Balance at December 31, 2021 | |
| 15,596,922 | | |
| 281,631 | | |
| (244,302 | ) | |
| 10,607 | | |
| (1,037 | ) | |
| 46,899 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at January 1, 2022 | |
| 15,596,922 | | |
| 281,631 | | |
| (244,302 | ) | |
| 10,607 | | |
| (1,037 | ) | |
| 46,899 | |
| Loss for the year | |
| | | |
| | | |
| (44,044 | ) | |
| | | |
| | | |
| (44,044 | ) |
| Other comprehensive income | |
| | | |
| | | |
| | | |
| | | |
| 593 | | |
| 593 | |
| Total comprehensive income for the year | |
| | | |
| | | |
| (44,044 | ) | |
| | | |
| 593 | | |
| (43,451 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Transactions with owners in their capacity as owners: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Issuance of shares as part of GPS acquisition | |
| 691,171 | | |
| 5,000 | | |
| | | |
| | | |
| | | |
| 5,000 | |
| Share-based compensation costs | |
| | | |
| | | |
| | | |
| 867 | | |
| | | |
| 867 | |
| Balance at December 31, 2022 | |
| 16,288,093 | | |
| 286,631 | | |
| (288,346 | ) | |
| 11,474 | | |
| (444 | ) | |
| 9,315 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at January 1, 2023 | |
| 16,288,093 | | |
| 286,631 | | |
| (288,346 | ) | |
| 11,474 | | |
| (444 | ) | |
| 9,315 | |
| Loss for the year | |
| | | |
| | | |
| (43,100 | ) | |
| | | |
| | | |
| (43,100 | ) |
| Other comprehensive income | |
| | | |
| | | |
| | | |
| | | |
| (149 | ) | |
| (149 | ) |
| Total comprehensive income for the year | |
| | | |
| | | |
| (43,100 | ) | |
| | | |
| (149 | ) | |
| (43,249 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Transactions with owners in their capacity as owners: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Issuance of shares, net of transaction costs | |
| 10,750,000 | | |
| 39,599 | | |
| | | |
| | | |
| | | |
| 39,599 | |
| Issuance of shares as part of amended GPS asset purchase agreement | |
| 250,000 | | |
| 878 | | |
| | | |
| | | |
| | | |
| 878 | |
| Share-based compensation costs | |
| | | |
| | | |
| | | |
| 665 | | |
| | | |
| 665 | |
| Balance at December 31, 2023 | |
| 27,288,093 | | |
| 327,108 | | |
| (331,446 | ) | |
| 12,139 | | |
| (593 | ) | |
| 7,208 | |
| * | The
company completed a share consolidation with respect to all its outstanding shares by means of a 1-for-10 reverse stock split (the “Share
Consolidation”) as of November 13, 2023. All share amounts and the EPS were adjusted retroactively to reflect the reverse stock-split. |
Consolidated statement of cash flow
Thousands of $
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| |
| | |
| | |
| |
| Operating loss | |
| |
| (27,327 | ) | |
| (37,900 | ) | |
| (26,841 | ) |
| Depreciation | |
12 | |
| 2,365 | | |
| 1,740 | | |
| 1,426 | |
| Amortization of intangible assets | |
11 | |
| 4,494 | | |
| 3,169 | | |
| 1,610 | |
| Impairment | |
11 | |
| - | | |
| 44 | | |
| - | |
| Share-based compensation | |
24 | |
| 665 | | |
| 867 | | |
| 1,222 | |
| Other non-cash transactions | |
| |
| 421 | | |
| (473 | ) | |
| (325 | ) |
| Cash used in operations before working capital changes | |
| |
| (19,382 | ) | |
| (32,553 | ) | |
| (22,908 | ) |
| | |
| |
| | | |
| | | |
| | |
| Increase (-) / decrease (+) in inventories | |
13 | |
| (452 | ) | |
| (416 | ) | |
| 413 | |
| Increase (-) in receivables | |
14 | |
| (1,683 | ) | |
| (5,122 | ) | |
| (1,383 | ) |
| Increase (+) in payables | |
18/19 | |
| 20 | | |
| 3,973 | | |
| 1,330 | |
| Net cash outflow from operating activities | |
| |
| (21,497 | ) | |
| (34,118 | ) | |
| (22,548 | ) |
| | |
| |
| | | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| |
| | | |
| | | |
| | |
| Purchase of property, plant and equipment | |
12 | |
| (2,747 | ) | |
| (2,789 | ) | |
| (896 | ) |
| Acquisition and generation of intangible assets | |
11 | |
| (2,272 | ) | |
| (1,374 | ) | |
| - | |
| Acquisition of Genomic Prostate Score Business | |
11 | |
| - | | |
| (25,000 | ) | |
| - | |
| Interests received | |
8 | |
| 1,088 | | |
| 125 | | |
| 11 | |
| Net cash outflow from investing activities | |
| |
| (3,931 | ) | |
| (29,038 | ) | |
| (885 | ) |
| | |
| |
| | | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| |
| | | |
| | | |
| | |
| Proceeds from issuance of shares, net of transaction costs | |
22 | |
| 39,599 | | |
| - | | |
| 68,566 | |
| Proceeds from loan obligation | |
16 | |
| - | | |
| 34,291 | | |
| - | |
| Repayment of loan obligation and debt extinguishment costs | |
16 | |
| (1,659 | ) | |
| (10,805 | ) | |
| - | |
| Amendment fee related to GPS Asset Purchase Agreement | |
16 | |
| (250 | ) | |
| - | | |
| - | |
| Payment of lease liability | |
16 | |
| (1,610 | ) | |
| (1,358 | ) | |
| (1,057 | ) |
| Payment of interest | |
| |
| (3,610 | ) | |
| (1,412 | ) | |
| (1,011 | ) |
| Other financial expenses | |
8 | |
| (190 | ) | |
| - | | |
| - | |
| Net cash inflow from financing activities | |
| |
| 32,280 | | |
| 20,716 | | |
| 66,498 | |
| | |
| |
| | | |
| | | |
| | |
| Net increase (+) / decrease (-) in cash and cash equivalents | |
| |
| 6,852 | | |
| (42,440 | ) | |
| 43,065 | |
| | |
| |
| | | |
| | | |
| | |
| Cash and cash equivalents at beginning of the financial year | |
| |
| 15,503 | | |
| 58,498 | | |
| 15,953 | |
| Effect on exchange rate changes | |
| |
| 25 | | |
| (555 | ) | |
| (520 | ) |
| Cash and cash equivalents at end of the financial year | |
14/18 | |
| 22,380 | | |
| 15,503 | | |
| 58,498 | |
NOTE 1: Status and principal activity
When used in this report, all references to “MDxHealth”,
the “company”, “we”, “our” and “us” refer to MDxHealth, SA and its subsidiaries. MDxHealth
is a limited liability company domiciled in Belgium, with offices and labs in Belgium, the United States and The Netherlands.
MDxHealth is a commercial-stage precision diagnostics
company committed to providing non-invasive, clinically actionable and cost-effective urologic solutions to improve patient care. The
Company’s novel prostate cancer genomic testing solutions combine advanced clinical modeling with genomic data to provide each patient
with a personalized cancer risk profile, which provides more accurate and actionable information than standard risk factors (e.g., PSA,
DRE, age) used by clinicians.
The Company’s Select mdx and Confirm mdx
solutions address men at risk for developing prostate cancer, providing physicians with a clear clinical pathway to accurately identify
clinically significant prostate cancer while minimizing the use of invasive procedures that are prone to complications. The Company’s
Genomic Prostate Score (GPS) solution addresses men newly diagnosed with prostate cancer, providing physicians with a clear clinical pathway
to make the most informed treatment decision for their individual disease, including active surveillance. The Company’s collective
decades of experience in precision diagnostics and its portfolio of novel biomarkers for diagnostic, prognostic and predictive molecular
assays supports its active pipeline of new testing solutions for prostate and other urologic diseases.
MDxHealth offers its laboratory solutions from
its state-of-the-art, 13,448 square feet, College of American Pathologists (CAP)-accredited and Clinical Laboratory Improvement Amendments
of 1988 (“CLIA”) certified, molecular laboratory facility located at its U.S. headquarters in Irvine, California as well as
a CLIA-certified lab in Plano, Texas. MDxHealth also operates a research and development-focused molecular laboratory facility, MDxHealth
B.V., located in Nijmegen, the Netherlands.
The Company is headquartered in Belgium. The parent
company, MDxHealth SA, has its registered and corporate office in Cap Business Center, Rue d’Abhooz 31, 4040 Herstal, Belgium. MDxHealth,
Inc., the Company’s U.S. subsidiary, is located at 15279 Alton Parkway, Suite 100, Irvine, CA 92618, United States. MDxHealth B.V.,
the Company’s Dutch subsidiary, is located at Transistorweg 5, 6534 Nijmegen, The Netherlands.
American Depositary Shares (“ADS”),
each representing 10 ordinary shares of the Company, began trading on the Nasdaq Capital Market on November 4, 2021. On November 13, 2023,
the Company completed a 1-for-10 reverse stock split of its ordinary shares, after which each ADS represented one ordinary share. On November
27, 2023, the Company completed the mandatory exchange of all of its ADSs for one ordinary share each and subsequently terminated the
Company’s ADS facility, at which time the ordinary shares were admitted to listing on the Nasdaq Capital Market under the symbol
“MDXH”. Following a transition period of three weeks, the Company de-listed its ordinary shares from Euronext Brussels and,
as of December 15, 2023, its ordinary shares began solely trading on the Nasdaq Capital Market. The disclosures in these financial statements
give retroactive effect to these changes.
NOTE 2: Summary of Material Accounting Policies
2.1.
Basis of preparation and statement of compliance
MDxHealth’s consolidated financial statements
have been prepared in accordance with the International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretation
Committee (IFRS-IC) applicable to companies reported under IFRS. The financial statements comply with IFRS as issued by the International
Accounting Standards Board (IASB), collectively “IFRS”. In addition the financial statements are also prepared in accordance
with IFRS as adopted by the EU (“EU IFRS”).
The principal accounting policies applied in the
preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated. The functional and presentation currency is the U.S. Dollar ($) and all amounts are presented in thousands
of U.S. Dollars, rounded to the nearest thousand, unless otherwise indicated.
Reclassifications
Certain prior period balances have been reclassified
to conform to current period presentation of the Company’s consolidated financial statements and accompanying notes. Such reclassifications
have no effect on previously reported results of operations, accumulated deficit, subtotals of operating, investing or financing cash
flows or consolidated balance sheet totals.
2.2.
Basis of consolidation
The consolidated financial statements incorporate
the financial statements of MDxHealth SA (Belgium) and its wholly owned subsidiaries, including MDxHealth Inc. (United States), and MDxHealth
BV (The Netherlands) for each fiscal year ending on December 31.
Subsidiaries are all entities over which the Company
has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Company. The acquisition method of accounting is used to account for
business combinations by the Company.
All intercompany balances, profits and transactions are eliminated
upon consolidation.
2.3.
Going Concern
The Company has experienced net losses and significant
cash used in operating activities since its inception in 2003, and as of December 31, 2023, had an accumulated deficit of $331.4 million,
a net loss of $43.1 million, and net cash used in operating activities of $21.5 million. Management expects the Company to continue to
incur net losses and have significant cash outflows for at least the next twelve months. While these conditions, among others, could raise
doubt about its ability to continue as a going concern, these consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. This basis of accounting contemplates the recovery of its assets and the satisfaction of liabilities
in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive
cash flows adequate to support the Company’s cost structure.
As of December 31, 2023, the Company had cash
and cash equivalents of $22.4 million. On May 1, 2024, the Company closed a $100 million loan and security agreement with funds managed
by OrbiMed Advisors LLC. The Company drew down $55 million from this loan, replacing its existing $35 million debt facility with Innovatus.
Taking into account the above financial situation and on the basis of the most recent business plan including the Company’s expected
ability to access additional cash through debt, equity, or other means, the Company believes that it has sufficient cash to be able to
continue its operations for at least the next twelve months from the date of issuance of these financial statements, and accordingly has
prepared the consolidated financial statements assuming that it will continue as a going concern. This assessment is based on forecasts
and projections within management’s most recent business plan as well as the Company’s expected ability to meet the conditions
and covenants as part of the OrbiMed credit facility as well as to access additional cash through debt, equity or other means, for which
at this moment a material uncertainty exists that casts substantial doubt on the Company’s ability to continue as a going concern.
The Company also believes the going concern assumption is justified based on its ability to realize cost savings in case it will not be
successful in raising additional cash through debt, equity or other means.
Macroeconomic Factors
The Company does not believe that the Ukraine
war or the war in Israel/Gaza has an impact on the Company’s ability to continue as a going concern. There is no direct or indirect
impact of these conflicts on the day-to-day business of the Company. The Company is not materially impacted by inflation, supply disruption
or cyber-attacks due to the current geopolitical conflict.
With regards to climate-related matters, the Company
is not impacted in a material way by extreme weather conditions.
2.4.
Use of estimates and judgments
Management makes certain critical accounting estimates
and management judgments when applying the Company’s accounting policies, which affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses
during the reporting period. Estimates and judgments are continuously evaluated based on historical experience and other factors, including
expectations of future events, which are believed to be reasonable under the circumstances. In the future, actual experience may differ
from these estimates and assumptions.
Judgements:
Financial Liabilities and Assets (Note 16)
The warrant issued to Exact Sciences as well as
the right held by MDxHealth to pay the earnout obligation either in cash or in shares, up to certain limits, were considered as embedded
derivatives of the host financial (earnout) liability and not closely related to the host financial liability given the differences in
risk and exposure:
| |
● |
The fair value of the Company’s option to settle the earnout obligation in cash or through the issuance of additional shares of the Company was measured based on a Monte Carlo valuation model which takes into account several factors including the expected evolution in Company’s share price as well as the 7.5% ownership limit of the outstanding shares of MDxHealth, as described above. This valuation model is considered as level 3 input and was valued as a $0.8 million financial asset; and |
| |
● |
The fair value of the warrant held by Exact Sciences to acquire up to 1,000,000 of the Company’s shares at an exercise price of $5.265 per share, was measured based upon a Binomial tree valuation model which takes into account several factors including the expected evolution in the Company’s share price. This valuation model is considered as level 3 input and was valued at $2.2 million financial liability. |
Revenue recognition (Note 4):
As further described in Note 2.7 (paragraph “Determining
the Transaction Price”), the Company analyzes historical collection data on a quarterly basis and makes adjustments to its estimates.
In accordance with IFRS 15, revenue is recognized where such a variable consideration is included in the transaction price only to
the extent that it is highly probable that the amount of revenue recognized will not be subject to significant future reversals as a result
of subsequent re-estimation.
Going Concern (Note 2.3)
Management needs to make significant judgements
whether the Company will have sufficient liquidity to continue operations during the next twelve months. Refer to Note 2.3 for management
assessment.
Estimates:
The areas where assumptions and estimation uncertainties
in the financial statements have potentially the most significant effect in 2023, are listed below:
Financial Liabilities and Assets (Note 16)
Other financial assets and liabilities are accounted
for at fair value through the statement of profit or loss and include the following:
The fair value of the contingent consideration
payable to Exact Sciences (for the GPS acquisition) and to NovioGendix, which are presented in the yearend statement of financial position
under “other non-current financial liabilities” and “other current financial liabilities” are based on an estimated
outcome of the conditional purchase price and contingent payments arising from contractual obligations (level 3 input). These were initially
recognized as part of the purchase price and then subsequently measured for fair value. Any changes to fair value are recorded in the
statement of profit or loss through either “other operating (expense) income”, “financial income” or “financial
expense” depending on the underlying driver for the fair value adjustment.
The fair value of the GPS contingent consideration
is based on the estimated timing and amount of the earnout payments. This estimate is then discounted to its net present value, taking
into account the expected time when the earnout would become payable in 2025, 2026, and 2027. This contingent consideration was initially
recorded along with the purchase price allocation of this business combination as detailed in Note 3.
In August 2023, the Company and Exact Sciences
amended their existing GPS asset purchase agreement in consideration for an amendment fee of $250,000 in cash and 250,000 of the Company’s
shares, a 5-year subscription right (warrant) to acquire up to 1,000,000 of the Company’s shares at an exercise price of $5.265
per share (representing a 50% premium to the market price of the shares as of August 18, 2023), and an increase in the potential aggregate
earnout amount from $70 million to $82.5 million. At the option of MDxHealth, the earnout amounts can be settled in cash or through the
issuance of additional shares of the Company (valued in function of a volume weighted average trading price of the Company’s shares at
the end of the relevant earnout period) to Exact Sciences, provided that the aggregate number of shares held by Exact Sciences shall not
exceed more than 7.5% (increased from 5% in the initial agreement) of the outstanding shares of MDxHealth.
The amendment resulted in a fair value adjustment
to the contingent consideration liability of $9.7 million for the year ended December 31, 2023, of which 9.1 million was recorded in “financial
expenses” and resulted from changes in the weighted-average cost of capital (WACC) as well as changes in the terms of the earnout
following the GPS asset purchase agreement amendment in August 2023, while the remaining $0.6 million was recorded under “other
operating (expense) income, net”. The contingent consideration liability is considered as a financial liability based on level 3
input and was valued at $62.6 million as of December 31, 2023, using a discount rate of 12.83%.
The fair value of the contingent consideration
related to NovioGendix is based on a risk-adjusted future cash flows of different scenarios discounted using an interest rate of 12.83%.
The fair value of the liability for the year ended December 31, 2023, was valued at $1.2 million, of which $550,000 is considered to be
current.
The fair value of the derivative financial liabilities
related to the Innovatus derivative call option (as detailed in Note 16) was performed using a binomial pricing model which takes into
account several factors including the expected evolution in Company’s share price and are considered as level 3 input. The fair
value of the liability for the year ended December 31, 2023, is estimated at $192,000.
Impairment Testing (Notes 3, 10 and 11)
The Company recorded Goodwill of $35.9 million
as part of the GPS business combination in the prior year (detailed in Note 3), which is subject to annual impairment testing. The Company
has performed an impairment test as of December 31, 2023, at the level of the entire company which is in line with the level at which
management monitors its profitability. The Company’s cash-generating unit (CGU) is expected to benefit from the synergies of the
business combination.
The impairment testing is based on a discounted
cash flow (DCF) model, with cash flows for the next five years derived from the internal budgets and a residual value that assumes a perpetual
growth rate of 2%. The value-in-use is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows
and the growth rate used for extrapolation purposes.
Key underlying estimates are considered to be
the estimated cashflows and the weighted-average cost of capital, and are further described in Note 10.
Share-Based Payments (Note 24)
Management estimates the fair value of the equity-settled share-based payment
transactions by using the Black-Scholes option valuation model:
| |
● |
The dividend return is estimated by reference to the historical dividend payment of the Company; currently, this is estimated to be zero as no dividends have been paid since inception; |
| |
● |
The expected volatility was determined using the average volatility of the stock over the last two years at the date of grant; |
| |
● |
Risk-free interest rate is based on the interest rate applicable for the 10-year Belgian government bond at the grant date given all grants during 2023 were done at the moment the Company was still listed on Euronext. |
2.5. New Standards, Interpretations
and Amendments
2.5.1. New Standards, Interpretations and Amendments adopted by
the Company
The accounting policies have been consistently
applied by the Company and are consistent with those used in previous years.
The following amendments and interpretations issued
by the IASB and IFRIC apply for the first time in 2023, but do not have a significant impact on the consolidated financial statements
of the Group.
| |
● |
IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17 (issued on 25 June 2020) |
| |
● |
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (issued on 12 February 2021) |
| |
● |
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021) |
| |
● |
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 7 May 2021) |
| |
● |
Amendments to IFRS 17 Insurance contracts: initial application of IFRS 17 and IFRS 9 – Comparative information (issued on 9 December 2021 |
| |
● |
Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (issued on 23 May 2023) |
This adoption has not had any material impact
on the disclosures or on the amounts reported in these financial statements.
2.5.2. Standards and Interpretations issued
but not yet effective in the current period
Certain new accounting standards and amendments
to standards have been published, but were not mandatory for the December 31, 2023, reporting period.
No amendments to standards that are issued but
not yet effective are considered to materially affect the Company’s accounting policies or any of the disclosures when applied for
the first time.
The following amendments have been issued, but
are not mandatory for the financial year beginning January 1, 2023:
| |
● |
Amendments to IAS 1 ‘Presentation of Financial Statements: Classification of Liabilities as current or non-current’ (effective January 1, 2024), affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. The amendments: |
| |
o |
clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least twelve months and make explicit that only rights in place “at the end of the reporting period” should affect the classification of a liability; |
| |
o |
clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services; and |
| |
o |
clarify how conditions with which an entity must comply within 12 months after the reporting period, such as covenants, affect the corresponding liability’s classification. |
| |
● |
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (effective January 1, 2024). The amendments explain how an entity accounts for a sale and leaseback after the date of the transaction, specifically where some or all the lease payments are variable lease payments that do not depend on an index or rate. They state that, in subsequently measuring the lease liability, the seller-lessee determines ‘lease payments’ and ‘revised lease payments’ in a way that does not result in the seller-lessee recognizing any amount of the gain or loss that relates to the right of use it retains. Any gains and losses relating to the full or partial termination of a lease continue to be recognized when they occur as these relate to the right of use terminated and not the right of use retained. |
| |
● |
Amendments to IAS 7 ’Statement of Cash Flows’ and IFRS 7 ‘Financial Instruments: Disclosures’1: Supplier Finance Arrangements, effective 1 January 2024 |
| |
● |
Amendments to IAS 21 ‘The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability’1, effective 1 January 2025 |
The Company is analyzing the impact, if any, on
its consolidated financial statements in view of the application of the amendment of IAS 1.
2.6.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of
each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates
(the functional currency). The Company’s functional and presentation currency is the U.S. dollar based on the continuing development
of the commercial activities in the U.S. market.
Foreign currency transactions are translated into
the functional currency using the exchange rates at the date of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year-end
exchange rates are generally recognized in profit or loss.
The results and financial positions of foreign
operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
| |
● |
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that balance sheet. At December 31, 2023, the official exchange rate applied for assets and liabilities was €1 to $1.105 (2022: €1 to $1.066) quoted by the European Central Bank. |
| |
● |
Income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates. At December 31, 2023, the official exchange rate applied for income and expenses was €1 to $1.0813 (2022: €1 to $1.053) quoted by the European Central Bank. |
| |
● |
All resulting exchange differences are recognized in other comprehensive income. |
2.7.
Revenue recognition
Performance obligations and timing of revenue
recognition
The majority of the Company’s revenue is
derived from laboratory services with revenue recognized at a point in time when control of the services has transferred to the customer.
This is generally when the test results are delivered to the customer.
Minor other Company’s revenue is derived
from license fees and royalties:
| |
● |
License fees are recognized when the Company has fulfilled all conditions and obligations. If the Company has continuing performance obligations towards the fees, the fee will be recognized on a straight-line basis over the contractual performance period. |
| |
● |
Royalties are recognized as revenue once the amounts due can be reliably estimated based on the sale of the underlying products and services and when the collection of the royalties can be reasonably assured. |
License up-front (signature fees) and non-refundable
fees for access to prior research results and databases are recognized when earned, if the Company has no continuing performance obligations
and all conditions and obligations are fulfilled. If the Company has continuing performance obligations towards the fees, the fee will
be recognized on a straight-line basis over the contractual performance period.
Royalties are generated from the sales by third
parties of products or services which incorporate the Company’s proprietary technology. Royalties are recognized as revenue once
the amounts due can be reliably estimated based on the sale of the underlying products and services and when the collection of the royalties
can be reasonably assured.
Determining the transaction price
A large portion of the Company’s revenues
are derived from Medicare, which reimburses the Company for tests performed on its insured patients. Medicare has set a fixed price (via
a Local Coverage Determination or “LCD”) for the Company’s Confirm mdx, Select mdx, and GPS tests. Therefore, the amount
of revenue recognized from Medicare for these tests is determined by reference to the LCD pricing.
For other patients insured by commercial insurance
companies where there is no certainty of the amount that will be paid for services rendered, the Company uses historical collection data
– on an individual payor basis – to estimate its future collection and corresponding revenues that should be recognized for
each type of test.
The Company analyzes historical collection data
on a monthly basis and makes monthly adjustments to its estimates. In accordance with IFRS 15, revenue is recognized where such a variable
consideration is included in the transaction price only to the extent that it is highly probable that the amount of revenue recognized
will not be subject to significant future reversals as a result of subsequent re-estimation.
When historical collection data is insufficient
to estimate future collections, the Company defaults to cash basis, meaning that revenues will not be recognized until actual cash payment
is received from the payor.
Total revenue in any given year includes amounts
related to tests performed in previous years that relate to:
| |
● |
revenue from transactions in previous years that did not previously meet the revenue recognition criteria; |
| |
● |
differences between the revenue recognized in previous years and the actual amount received; and |
| |
● |
reversals of revenue relating to balances that are outstanding for more than 9 months. |
2.8.
Segment information
Information for the Company’s operating
segments has been determined by reference to the information used by the chief operating decision maker (“CODM”) of the Company
to review the performance of the Company and in making decisions on allocation of resources, the nature of the activities and the management
structure and accountabilities. The Company’s CEO has been identified as the chief operating decision maker in accordance with his
designated responsibility for the allocation of resources to operating segments and assessing their performance through periodic reporting.
The CODM periodically reviews the Company’s performance based on information at a company level.
The Company monitors the profitability of the
group as a whole given revenues are generated from clinical laboratory service testing and does accordingly not distinguish different
business segments.
2.9.
intangible assets
Initial measurement:
Externally acquired
Intangible assets are recognized on business combinations
if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles
are determined using appropriate valuation techniques.
Intangible assets are recognized on the business
combinations of NovioGendix in 2015 (Select mdx) and GPS in 2022 and include:
| |
● |
Externally acquired intellectual property, including patents, technology and related IP; and |
All were valued through application of the relief
from royalty method, except for the customers which were valued on the basis of multi-period excess earnings method.
Externally acquired intangible assets also include
patents and software licenses which are initially recognized at cost.
Internally generated intangible assets (development
costs)
Development costs are capitalized when requirements
for capitalization during the development phase have been met. In absence of meeting the requirements, these are expensed in the period
in which they were incurred as research and development expenses.
Internally generated intangible assets relate
to Confirm mdx, Select mdx, Resolve mdx and GPS.
Subsequent measurement
Intangible assets are carried at their cost less
any accumulated amortization and any accumulated impairment losses amortized on a straight-line basis over their estimated useful lives
on the following basis:
| |
● |
Patents & software: shorter of (a) 5 years; or (b) the software license period / patent life |
| |
● |
Intellectual property: 10-15 years |
| |
● |
Capitalized development costs: 5 years |
Amortization over the asset’s useful life
shall begin when the asset is available for use. Amortization of intangible assets are presented as a separate line in the consolidated
statement of profit or loss.
2.10.
Property, plant and equipment
Property, plant and equipment are stated at historical
cost less accumulated depreciation and impairment. Repair and maintenance costs are charged to the income statement as incurred. Depreciation
is charged to write off the cost or valuation of assets over their useful lives, using the straight-line method, on the following basis:
| |
● |
IT hardware and software: 3 years |
| |
● |
Leasehold improvements: in line with the non-cancellable lease period of the related lease |
2.11.
Right-of-use assets and liabilities
Right-of-use assets:
The Company recognizes right-of-use assets at
the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of
the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life
and the lease term. Depreciation periods range between 3 and 6 years. Right-of-use assets are subject to impairment.
Lease liabilities:
At the commencement date of the lease, the Company
recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include
fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of
a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term
reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized
as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments,
the Company uses the incremental borrowing rate at the lease commencement date which is in the following ranges:
| |
● |
Buildings: 10% and 12.75% |
| |
● |
Vehicles: 2.5% and 3.75% |
| |
● |
Materials: 9.75% and 12% |
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
2.12.
Impairment of assets
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances
indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in
use. The Company monitors its Goodwill at consolidated Company level which is the level of the Company of cash-generating units (CGUs)
benefiting from the synergies. Non-financial assets other than Goodwill that suffered an impairment are reviewed for possible reversal
of the impairment at the end of each reporting period.
2.13.
Inventories
Inventories are initially recognized at cost,
and subsequently at the lower of cost and net realizable value. Cost comprises merely purchase costs, as the inventory consists solely
of raw materials. Raw materials are not ordinarily interchangeable, and they are as such accounted for using the specific identification
of their individual cost.
The Company does not account for work in progress
and finished products.
2.14.
Cash and cash equivalents
Cash and cash equivalents are carried on the
consolidated statement of financial position at nominal value. For the purposes of the cash flow statements, cash and cash equivalents
comprise cash on hand, deposits held on call with banks, other short-term highly liquid investments and bank overdrafts. Bank overdrafts,
if any, are included in borrowings included in current liabilities.
2.15.
Taxation
Current tax assets and liabilities for the current
period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting date.
Deferred income tax is provided in full using
the “balance sheet liability method”, on temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax liabilities are recognized for all
taxable differences. Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date
and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities
are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.
2.16.
Share Capital
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.17.
Financial Assets
The financial assets consist mainly of trade receivables
and other current assets (deposits) as well as the Company’s option to settle the earnout obligation to Exact Sciences in cash or
through the issuance of additional shares of the Company (refer to Note 3 for additional details on the Company’s earnout obligation
to Exact Sciences).
Trade receivables and other current assets
(deposits)
Classification and measurement on initial recognition
The classification of financial assets at initial
recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing
them.
The company initially measures a financial asset
at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
For both trade receivables that do not contain
a significant financing component, and trade receivables for which the collection is expected in less than one year, the Company has applied
the simplified approach to providing for expected credit losses (ECL) prescribed by IFRS 9, which requires the use of the lifetime expected
loss provision for all trade receivables.
Trade receivables do not carry any interest and
are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision
for impairment based on expected credit losses, where applicable.
Subsequent measurement
After initial recognition, trade receivables and
some other current assets as listed in Note 14 are measured at amortized cost using the effective interest method, less provision for
impairment based on expected credit losses.
Option to settle the earnout obligation to
Exact Sciences in cash or through the issuance of additional shares of the Company
Classification and measurement on initial recognition
At the option of MDxHealth, the earnout amounts
to Exact Sciences can be settled in cash or through the issuance of additional shares of the Company (valued in function of a volume weighted
average trading price of the Company’s shares at the end of the relevant earnout period) to Exact Sciences, provided that the aggregate
number of shares held by Exact Sciences shall not exceed more than 7.5% (increased from 5% in the initial agreement) of the outstanding
shares of MDxHealth.
This option is considered as an embedded derivative
of the host financial (earnout) liability and not closely related to the host financial liability and is recognized at fair value through
the statement of profit or loss at each closing date using the Monte Carlo valuation model, as further detailed in Note 3.
2.18.
Financial Liabilities
The financial liabilities consist mainly of loans
and borrowings, lease liabilities, trade and other payables and other financial liabilities that include derivative financial liabilities
and contingent consideration related to business combinations.
Measurement on initial recognition
At initial recognition, financial liabilities
are measured at fair value less transaction costs unless the financial liability is carried at fair value through the statement of profit
or loss, in which case the transaction costs are immediately recognized in the statement of profit or loss. The best estimate of the fair
value at initial recognition is usually the transaction price, represented by the fair value of the consideration given or received in
exchange for the financial instrument. Any difference between the fair value estimated by the entity and the transaction price (“day
one gain or loss”) is recognized:
| |
● |
in the statement of profit or loss if the estimate is evidenced by a quoted price in an active market; and |
| |
● |
deferred as an adjustment to the carrying amount of the financial instrument in all other cases. |
The fair value of the contingent consideration
payable at the date of acquisition is computed as the sum of the probability-weighted fair values of the purchase prices, as follows:
| |
● |
GPS: the liability recognized reflects a probability-weighted estimate at the current net present value at the date of acquisition, which is expected to become payable. |
| |
● |
NovioGendix: each of the potential product development paths. The fair value of each path is in turn computed as the sum of the survival probability discounted to present values of the contingent payments in each such path, including the milestone and commercialization payments. Any other financial liability included in the consideration payable for a business combination is recorded at fair value at the date of acquisition. |
The fair value of the derivative financial liabilities
is determined as follows:
| |
● |
Exact Sciences 5-Year Warrants: The fair value of the warrant held by Exact Sciences to acquire up to 1 million shares of MDxHealth was measured using a Binomial tree valuation model which takes into account several factors including the expected evolution in the Company’s share price. |
| |
● |
Innovatus: The derivative financial instrument related to the Innovatus debt facility option to convert up to 15% of the outstanding aggregate principal amount into ordinary shares of the Company for a period up to August 2, 2025, is accounted for at fair value with a portion of the transaction costs allocated to the embedded derivative being expensed as incurred. The embedded derivative will be measured as an American call option using a binomial tree option pricing model with changes to fair value being recorded in the statement of profit or loss under financial expenses or income, as described further in Note 16. |
Subsequent measurement
After initial recognition, loans and borrowings,
lease liabilities, trade and other payables, are measured at amortized cost using the effective interest method. Contingent considerations
and derivative financial liabilities are measured at fair value and are reviewed at each reporting period, with any changes in fair value
recorded in the statement of profit or loss in either operating results (e.g., for changes in internal forecasts and projections) or financial
results (e.g., for changes in net present value), depending on the nature of the driver of the fair value adjustment.
2.19.
Retirement benefit plans and employee savings plans
Payments to defined contribution employee savings
plans are charged as an expense as they fall due. The Company does not offer nor operate any material defined benefit plans for its employees.
2.20.
Share-based compensation plans for personnel, directors and business associates
The Company grants stock options in accordance
with several share-based compensation plans in consideration for services performed by personnel, directors and business associates. The
cost of the services rendered is measured at the fair value of the granted options and recognized as an expense in the statement of profit
or loss. The corresponding credit is recorded directly into equity.
The estimate of the number of options which will
ultimately vest is revised at each reporting date. The change in estimate is recorded as an expense with a corresponding correction in
equity.
The received amount, less directly attributable
transaction costs, will be recorded as share capital and share premium when the options are exercised.
NOTE 3: Business combination
Acquisition of Genomic Prostate Score®
(GPS) test (formerly Oncotype DX GPS) from Exact Sciences
On August 2, 2022, the Company announced it has
entered into an agreement with Genomic Health, Inc., a subsidiary of Exact Sciences Corporation (“Exact Sciences”), to acquire
the GPS test from Exact Sciences. MDxHealth acquired GPS in order to expand its menu of tests targeted into urology and prostate cancer
and in order to position the Company as one of the leaders in the urology and prostate cancer space with one of the most comprehensive
menus of precision diagnostics.
Under the terms of the agreement, the Company
acquired the GPS prostate cancer business of Exact Sciences for an aggregate purchase price of up to $100 million, of which an amount
of $25 million was paid in cash and an amount of $5 million was settled through the delivery of 691,171 shares of the Company, at a price
per share of $7.23. Following the closing, which took place on August 2, 2022, an additional aggregate earnout amount of up to $70 million
was to be paid by the Company to Exact Sciences over a three year period, commencing in 2024, in tranches equal to a portion of the annual
revenues attributable to the GPS prostate cancer business for the preceding fiscal year; provided, in each instance, that such revenues
exceed certain minimum revenue milestones for such fiscal year.
At the option of MDxHealth, the earnout amounts
can be settled in cash or through the issuance of additional shares of the Company (valued in function of a volume weighted average trading
price of the Company’s shares at the end of the relevant earnout period) to Exact Sciences, provided that the aggregate number of
shares held by Exact Sciences shall not exceed more than 5% of the outstanding shares of the MDxHealth.
The Acquisition was accounted for under the acquisition
method of accounting and was being treated as a business combination in accordance with IFRS given that there are inputs from the intellectual
property and customers acquired, a substantive process, consisting of a workforce that was hired from Exact Sciences, which allows the
Company to generate outputs as from day 1 of the acquisition. The purchase price was allocated based on the estimated fair value of net
assets acquired and liabilities assumed at the date of the acquisition.
The acquisition consideration was comprised of (in thousands of $):
| Cash | |
| 25,000 | |
| Stock | |
| 5,000 | |
| GPS Contingent consideration | |
| 50,483 | |
| Total acquisition consideration | |
| 80,483 | |
The purchase price in excess of the fair value
of net assets acquired, has been considered as residual Goodwill for an amount of $35.9 million.
The fair value of the identifiable assets at the
date of acquisition were:
| Thousands of $ | |
Carrying
value at
acquisition
date | | |
Fair
value
adjustments | | |
Fair
value at
acquisition
date | |
| Intangible assets IP / Brand | |
| - | | |
| 36,550 | | |
| 36,550 | |
| Intangible assets Customer relationships | |
| - | | |
| 8,007 | | |
| 8,007 | |
| Total identified assets | |
| - | | |
| 44,557 | | |
| 44,557 | |
| Goodwill | |
| - | | |
| 35,926 | | |
| 35,926 | |
| Acquisition price | |
| - | | |
| - | | |
| 80,483 | |
We have performed a fair value analysis of the business combination,
with corresponding adjustments to the intangible assets.
The accounting for the business combination resulted
in fair values at date of acquisition of $44.6 million for the IP/brand and customer relationships, based on the relief-from-royalty valuation
method, with a royalty rate of 9.56% and a remaining useful life of 15 years for the IP/Brand and a useful life of 6.5 years for the customer
relationships. The discount rate (post-tax WACC) used for the valuation was set at 14.95%. The goodwill recognized is primarily attributable
to the trained and knowledgeable workforce and to the expected synergies that will be realized at level of operations, existing customer
base, and sales & marketing.
Following the closing, an additional aggregate
earnout amount of up to $70 million is to be paid by MDxHealth to Exact Sciences upon achievement of certain revenue milestones related
to fiscal years 2023 through 2025. The contingent consideration was assessed at $52.9 million at December 31, 2022. The liability recognized
reflects a probability-weighted estimate at the current net present value at the date of acquisition, which is expected to become payable,
as further detailed in Note 16. Fair value adjustments to this contingent consideration liability are recognized in the statement of profit
or loss as described in Note 8.
The net deferred tax asset resulting from this
purchase price allocation was not recognized given insufficient future taxable profits. The recognized goodwill is expected to be fully
tax deductible upon actual payment of the contingent consideration.
The total acquisition-related costs recognized
as an expense in general and administrative expenses for the year ended December 31, 2022, were $3.7 million.
The GPS acquisition contributed $30.9 million
and $9.3 million to the Company’s consolidated revenues for the periods ended December 31, 2023 and 2022, respectively. The Company
is unable to determine what the full year 2022 GPS revenues would have been had the acquisition been completed as of January 1, 2022,
given that the Company would have to make assumptions related to GPS while it was owned and sold by Exact Sciences and to do so would
be impracticable.
The Company financed the acquisition in part through
a $35 million loan and security agreement with an affiliate of Innovatus Capital Partners, LLC (“Innovatus”), which replaced
the Company’s existing €9 million debt facility with Kreos Capital (“Kreos”). Refer to Note 16 for further details.
On August 23, 2023, MDxHealth and Exact Sciences
Corporation amended their existing Oncotype DX GPS prostate cancer business asset purchase agreement, deferring the Company’s initial
earnout payment by 3 years, from 2024 to 2027, in consideration for an amendment fee of $250,000 in cash and 250,000 of the Company’s
shares, a 5-year subscription right (warrant) to acquire up to 1,000,000 of the Company’s shares at an exercise price of $5.265
per share (representing a 50% premium to the market price of the shares as of August 18, 2023), and an increase in the potential aggregate
earnout amount from $70 million to $82.5 million. The resulting financial charges of this amendment are further described in Note 8.
The Company agreed to convene a general shareholders’
meeting to approve the subscription right. Under the terms of the amended asset purchase agreement, MDxHealth has agreed to make earnout
payments to Exact Sciences in each of fiscal years 2025, 2026 and 2027, based upon certain revenues related to fiscal years 2024, 2025
and 2023, respectively. At the option of MDxHealth, the earnout amounts can be settled in cash or through the issuance of additional shares
of the Company (valued in function of a volume weighted average trading price of the Company’s shares at the end of the relevant
earnout period) to Exact Sciences, provided that the aggregate number of shares held by Exact Sciences shall not exceed more than 7.5%
(increased from 5% in the initial agreement) of the outstanding shares of the Company.
NOTE 4: Revenue and cost of sales
Revenue
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Services | |
| 69,965 | | |
| 36,965 | | |
| 21,937 | |
| Royalties and other revenues | |
| 228 | | |
| 89 | | |
| 302 | |
| Total revenue | |
| 70,193 | | |
| 37,054 | | |
| 22,239 | |
Revenues related to royalties, licenses and other
revenues are generally recognized over time as described in Note 2.7.
The Company did not recognize any contract assets
or contracts liabilities.
Total revenue for 2023 was $70.2 million, an increase
of 89% as compared to total revenue of $37.1 million for 2022. 2023 revenues were comprised of $30.9 million from GPS, $24.8 million from
Confirm mdx, $9.7 million from Resolve mdx, with the remaining revenues from Select mdx and other. Total revenue of $37.1 million for
2022 increased 67% compared to total revenue of $22.2 million for 2021. 2022 revenues were comprised of $21.8 million from Confirm mdx,
$9.3 million from GPS, $4.9 million from Resolve mdx, with the remaining revenues from Select mdx and other.
Medicare
Reimbursement for diagnostic tests furnished to
Medicare beneficiaries (typically patients aged 65 or older) is usually based on a fee schedule set by the U.S. Centers for Medicare &
Medicaid Services (“CMS”), a division of the U.S. Department of Health and Human Services (“HHS”). As a Medicare-enrolled
service provider, the Company bills the regional Medicare Administrative Contractor (“MAC”) for CMS that covers the region
where the testing service is performed by the Company. The Confirm mdx test obtained a positive Medicare local coverage determination
(“LCD”) in 2014, the GPS test obtained a positive Medicare coverage LCD in 2015, and the Select mdx test obtained a positive
Medicare coverage LCD in 2023, each of which provides coverage for Medicare patients throughout the United States.
In 2023, Medicare represented the only payer generating
over 10% of the Company’s revenues, for a total of $27.7 million (2022: $15.8 million; 2021: $8.5 million).
At the end of 2023, the Company had concluded
agreements with 140 commercial payors for Confirm mdx (2022: 129; 2021: 119), 84 commercial payors for Select mdx (2022: 62; 2021: 54)
and 62 commercial payors for GPS (2022:29; 2021: 0).
Segment revenue
The Company does not distinguish different business
segments since most revenues are generated from clinical laboratory service testing, or the out-licensing of the Company’s patented
DNA methylation platform and biomarkers. However, the Company does distinguish different geographical operating segments based on revenue
since the revenues are generated both in United States of America and Europe.
In 2023, the Company earned 99.7% (2022: 99.8%;
2021: 98.6%) of its revenue from external customers from its clinical laboratory testing services and out-licensing of intellectual property.
Although the Company is incorporated in Belgium, the 2023 revenues generated in Belgium were not material. In 2023, the clinical laboratory
testing in the U.S. CLIA laboratories represented 99% of the Company’s revenue (2022: 99%; 2021: 97%), while the out-licensing of
intellectual property revenue in Europe represented less than 1% (2022: less than 1%; 2021: 1.5%).
The amount of its revenue from external customers
broken down by location is shown in the table below:
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| United States of America | |
| 69,708 | | |
| 36,768 | | |
| 21,785 | |
| Europe | |
| 476 | | |
| 277 | | |
| 441 | |
| Rest of the world | |
| 9 | | |
| 9 | | |
| 13 | |
| Total segment revenue | |
| 70,193 | | |
| 37,054 | | |
| 22,239 | |
At the end of 2023, 91% of the non-current assets
were located in the US (2022: 93%; 2021: 38%) and the remaining 9% in Europe (2022: 7%; 2021: 62%). The increase in non-current assets
located in the U.S. is mainly due to acquired intangible assets in the GPS business combination in 2022 as detailed in Note 3.
Cost
of sales
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Cost of sales | |
| 26,264 | | |
| 17,835 | | |
| 11,675 | |
| Total cost sales | |
| 26,264 | | |
| 17,835 | | |
| 11,675 | |
The costs of sales include the costs associated
with providing testing services to third parties and include the cost of materials, labor (including salaries, bonuses, and benefits),
transportation, collection kits, and allocated overhead costs associated with processing samples. Allocated overhead costs include depreciation
of laboratory equipment, facility occupancy and information technology costs. Costs associated with processing samples are expensed when
incurred, regardless of the timing of revenue recognition. Amortization of intangible assets are excluded from cost of sales and are presented
separately in the statement of profit or loss, as further detailed in Note 5.
NOTE 5: Nature of expenses
Research
and development expenses
Thousands of $
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Personnel costs | |
6 | |
| 3,693 | | |
| 2,453 | | |
| 1,949 | |
| Depreciation | |
12 | |
| 428 | | |
| 212 | | |
| 276 | |
| Impairment | |
11 | |
| - | | |
| 44 | | |
| - | |
| Lab consumables | |
| |
| 639 | | |
| 713 | | |
| 793 | |
| Patent expenses | |
| |
| 83 | | |
| 430 | | |
| 577 | |
| External collaborator fees | |
| |
| 199 | | |
| 783 | | |
| 1,020 | |
| Clinical validation | |
| |
| 765 | | |
| 584 | | |
| 842 | |
| Other expenses | |
| |
| 569 | | |
| 278 | | |
| 132 | |
| Total research and development expenses | |
| |
| 6,376 | | |
| 5,497 | | |
| 5,589 | |
Research and development expenses consist of costs
incurred for the development and improvement of our products. These expenses consist primarily of labor costs (including salaries, bonuses,
benefits, and share-based compensation), reagents and supplies, clinical studies, outside services, patent expenses, depreciation of laboratory
equipment, facility occupancy and information technology costs. Research and development expenses also include costs associated with assay
improvements and automation workflow for our current suite of products.
For the year ended December 31, 2023, research
and development expenses increased by $0.9 million, or 16%, primarily due to annual compensation increases, as well as an increase in
ongoing clinical studies, partially offset by savings in patent expenses, lab consumables, and external collaborator fees.
For the year ended December 31, 2022, research
and development expenses decreased $0.1 million, or 2%, compared to 2021, primarily due to decreases in clinical study costs, external
research and collaborator fees offset by increases in personnel costs.
Selling
and Marketing expenses
Thousands of $
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Personnel costs | |
6 | |
| 27,952 | | |
| 19,070 | | |
| 13,402 | |
| Depreciation | |
12 | |
| 888 | | |
| 750 | | |
| 504 | |
| Professional fees | |
| |
| 710 | | |
| 1,259 | | |
| 523 | |
| Marketing expenses | |
| |
| 5,075 | | |
| 2,843 | | |
| 1,761 | |
| Travel expenses | |
| |
| 1,061 | | |
| 789 | | |
| 340 | |
| Offices & facilities expenses | |
| |
| 459 | | |
| 356 | | |
| 436 | |
| Other expenses | |
| |
| 770 | | |
| 637 | | |
| 486 | |
| Total selling and marketing expenses | |
| |
| 36,915 | | |
| 25,704 | | |
| 17,452 | |
The Company’s selling and marketing expenses
are expensed as incurred and include costs associated with its sales organization, including its direct clinical sales force and sales
management, medical affairs, client services, marketing and managed care, as well as technical lab support and administration. These expenses
consist primarily of labor costs (including salaries, bonuses, benefits, and share-based compensation), customer education and promotional
expenses, market analysis expenses, conference fees, travel expenses and allocated overhead costs.
For the year ended December 31, 2023, selling
and marketing expenses increased by $11.2 million, or 44%, compared to 2022, primarily due to an increase in personnel costs related to
the Company’s acquisition of the GPS business in August 2022, as well as increased direct marketing expenses, travel expenses, facilities
expenses, and depreciation offset by a decrease in outside professional fees.
For the year ended December 31, 2022, selling
and marketing expenses increased $8.3 million, or 47%, compared to 2021, primarily due to increase in personnel costs and marketing expenses
related to the Company’s acquisition of the GPS business.
General
and administrative expenses
Thousands of $
For the years ended December 31 | |
Notes | |
2023 | | |
2022 | | |
2021 | |
| Personnel costs | |
6 | |
| 10,184 | | |
| 8,995 | | |
| 9,009 | |
| Depreciation | |
12 | |
| 737 | | |
| 734 | | |
| 646 | |
| Professional fees | |
| |
| 6,706 | | |
| 7,762 | | |
| 1,678 | |
| Public company expenses | |
| |
| 2,701 | | |
| 4,025 | | |
| 1,108 | |
| Travel expenses | |
| |
| 130 | | |
| 79 | | |
| 9 | |
| Offices & facilities expenses | |
| |
| 1,266 | | |
| 1,142 | | |
| 845 | |
| Royalties to third parties | |
| |
| 28 | | |
| 47 | | |
| 152 | |
| Board fees | |
| |
| 366 | | |
| 394 | | |
| 314 | |
| Other expenses | |
| |
| 892 | | |
| 130 | | |
| 154 | |
| Total general and administrative expenses | |
| |
| 23,010 | | |
| 23,308 | | |
| 13,915 | |
General and administrative expenses include costs
for certain executives, accounting and finance, legal, revenue cycle management, information technology, human resources, and administrative
functions. These expenses consist primarily of labor costs (including salaries, bonuses, benefits, and share-based compensation), professional
service fees such as consulting, accounting, legal, general corporate costs, and public-company costs associated with the Company’s
listing, as well as allocated overhead costs (rent, utilities, insurance, etc.).
General and administrative expenses decreased
in 2023 by $0.3 million or 1%. Despite an increase in personnel costs of $1.2 million, there were decreases in public company expenses
as well as a decrease in professional fees from the 2022 acquisition of GPS. Professional fees for 2023 included one-time expenses related
to the transition of its sole listing on NASDAQ as well as the amended asset purchase agreement with Exact Sciences.
General and administrative expenses increased
in 2022 by $9.4 million or 68%, of which $3.7 million were one-time expenses related to the GPS acquisition (included in Professional
fees), with the remaining $5.7 million increase primarily related to higher insurance, professional fees and public company expenses.
Amortization
of intangible assets
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Research and development | |
| 3,157 | | |
| 2,060 | | |
| 1,084 | |
| Selling and marketing | |
| 1,315 | | |
| 878 | | |
| 292 | |
| General and administrative | |
| 22 | | |
| 231 | | |
| 234 | |
| Total amortization of intangible assets | |
| 4,494 | | |
| 3,169 | | |
| 1,610 | |
Amortization of intangible assets primarily relates
to the acquired intellectual property, brand, and customer relationships of the GPS business combination, as detailed in Note 3.
In 2023, the Company segregated “amortization
of intangible assets” from other operating categories in the statement of profit or loss and is presenting amortization of intangible
assets as a separate category. Prior periods balances have been reclassified to conform to current period presentation.
NOTE 6: Personnel costs
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| The number of employees at the end of the year was: | |
| | |
| | |
| |
| Laboratory operations | |
| 79 | | |
| 67 | | |
| 42 | |
| R&D staff | |
| 31 | | |
| 19 | | |
| 14 | |
| S&M staff | |
| 106 | | |
| 101 | | |
| 71 | |
| G&A staff | |
| 84 | | |
| 71 | | |
| 64 | |
| Total number of employees | |
| 300 | | |
| 258 | | |
| 191 | |
| Their aggregate remuneration comprised: | |
| | | |
| | | |
| | |
| Wages and salaries | |
| 31,388 | | |
| 23,066 | | |
| 18,150 | |
| Social security costs | |
| 2,682 | | |
| 1,684 | | |
| 1,257 | |
| Pension costs | |
| 1,153 | | |
| 724 | | |
| 594 | |
| Health insurance expenses | |
| 5,058 | | |
| 3,167 | | |
| 2,324 | |
| Share-based compensation | |
| 665 | | |
| 867 | | |
| 1,222 | |
| Other costs | |
| 883 | | |
| 1,010 | | |
| 813 | |
| Total personnel costs | |
| 41,829 | | |
| 30,518 | | |
| 24,360 | |
The personnel numbers in the table reflect year-end
numbers, with 42 sales and marketing employees hired in August 2022 as part of the GPS acquisition.
NOTE 7: Other operating (expense) income,
net
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Grant subsidies – The Netherlands | |
| 62 | | |
| 5 | | |
| 382 | |
| Grant subsidies – USA | |
| - | | |
| - | | |
| 659 | |
| Fair value adjustments | |
| (588 | ) | |
| 515 | | |
| 176 | |
| Other operating income | |
| 65 | | |
| 39 | | |
| 53 | |
| Other operating expenses | |
| - | | |
| - | | |
| (109 | ) |
| Total other operating (expense) income, net | |
| (461 | ) | |
| 559 | | |
| 1,161 | |
Other operating (expense) income, net for the
year ended December 31, 2023, primarily consisted of a negative fair value adjustment of $588,000, which primarily consisted of an adjustment
for the contingent consideration liability, partially offset by a positive fair value adjustment of $37,000 related to the NovioGendix
contingent liability.
Other operating (expense) income, net for the
year ended December 31, 2022, primarily consisted of a positive fair value adjustment of $632,000 of the contingent consideration related
to the acquisition of NovioGendix in 2015, partially offset by a negative fair value adjustment of $117,000 related to the initial Kreos
drawdown derivative financial instrument.
Other operating (expense) income, net for the
year ended December 31, 2021, primarily consisted of a $659,000 grant from the U.S. Department of Health and Humas Services as well as
a $382,000 grant from the Dutch government NOW grants, both considered support for COVID-19 inefficiencies.
NOTE 8: Financial income and expense
Financial Income
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Interest income | |
| 1,088 | | |
| 125 | | |
| 11 | |
| Innovatus derivative instrument | |
| 719 | | |
| 116 | | |
| - | |
| Fair value of option to pay GPS earnout in shares | |
| 763 | | |
| - | | |
| - | |
| Financial income, net | |
| 2,570 | | |
| 241 | | |
| 11 | |
Financial Expenses
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Interest on Kreos loan | |
| - | | |
| (660 | ) | |
| (1,566 | ) |
| Interest on Innovatus loan | |
| (5,232 | ) | |
| (1,615 | ) | |
| - | |
| Interest on other loans and leases | |
| (350 | ) | |
| (361 | ) | |
| (309 | ) |
| Kreos settlement | |
| - | | |
| (1,047 | ) | |
| - | |
| Fair value adjustments | |
| | | |
| | | |
| | |
| GPS contingent consideration | |
| (9,105 | ) | |
| (2,398 | ) | |
| - | |
| NovioGendix contingent consideration | |
| (49 | ) | |
| (197 | ) | |
| (194 | ) |
| Kreos derivative instrument | |
| (135 | ) | |
| - | | |
| (96 | ) |
| Exact Sciences 5-year warrants | |
| (2,153 | ) | |
| - | | |
| - | |
| Other financial loss | |
| (190 | ) | |
| (107 | ) | |
| (7 | ) |
| GPS amendment: additional consideration payment in cash | |
| (250 | ) | |
| - | | |
| - | |
| GPS amendment: additional consideration payment in shares | |
| (878 | ) | |
| - | | |
| - | |
| Financial expenses, net | |
| (18,342 | ) | |
| (6,385 | ) | |
| (2,172 | ) |
For the year ended December 31, 2023, financial
expenses, were primarily comprised of a negative fair value adjustment for the GPS contingent consideration of $9.1 million resulting
from changes in net present value, interest charges of $5.2 million related to the Innovatus debt facility (as further detailed in Note
16), and $2.2 million related to the 5-year warrant issued to Exact Sciences as part of the amended GPS asset purchase agreement (as further
detailed in Note 3).
Other financial loss relates to bank costs incurred
during the year.
NOTE 9: Income Tax
No income taxes were payable in view of the losses
incurred by the Company. On December 31, 2023, the Company had a consolidated net tax loss carried forward amounting to $308.7 million
(2022: $285.3 million; 2021: $258.5 million).
The tax losses related to MDxHealth SA in Belgium
are available for carry forward. Until 2021, tax losses related to MDxHealth BV in the Netherlands are available for carry forward to
a period of 6 years. As of 2022, tax losses related to MDxHealth BV in the Netherlands are available for carry forward indefinitely. The
tax losses of MDxHealth Inc., related to the years beginning on or after January 1, 2018, are available for carry forward indefinitely.
Tax losses related to the years before January 1, 2018, can be carried forward to a period of 20 years.
Tax credits (investment deductions) amounted to $0 in 2023, $402,000
in 2022, and $372,000 in 2021.
It is uncertain if the Company will have taxable
profits in the near future to allow all or part of the deferred tax asset to be utilized and as a result, no deferred tax asset was recognized
in 2023, 2022, and 2021. The tax reconciliation and the impact of the unrecognized deferred tax assets is as follows:
| Thousands of $ | |
Income Statement | |
| For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Loss for the year | |
| (43,100 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| Income tax expense | |
| (1 | ) | |
| 0 | | |
| 0 | |
| Loss before income tax | |
| (43,099 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| | |
| | | |
| | | |
| | |
| Tax using the MDxHealth’s domestic tax rate | |
| 10,775 | | |
| 11,011 | | |
| 7,251 | |
| Effect of unused tax losses not recognized as deferred tax assets | |
| (10,775 | ) | |
| (11,011 | ) | |
| (7,251 | ) |
NOTE 10: Goodwill
On August 2, 2022, the Company acquired the GPS
test from Exact Sciences (refer to Note 3 for further details). The purchase price in excess of the fair value of the net assets acquired
has been considered as residual goodwill for an amount of $35.9 million.
The Company is required to test Goodwill for impairment
on an annual basis. The recoverable amount is determined based on a value-in-use calculation. The use of this method requires the estimation
of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.
The company monitors its Goodwill at the consolidated
company level, which is the level of its cash generating unit (CGU) benefiting from the synergies. The recoverable amount of the CGU has
been determined from the value-in-use calculation based on the Company’s cash flow projections covering a period of 5 years through
December 31, 2028.
The amount by which the CGU’s recoverable
value exceeds its carrying value is $88.8 million. The changes in the carrying value of Goodwill at December 31, 2023, 2022, and 2021
can be presented as follows:
| Thousands of $ | |
Goodwill | |
| At January 1, 2022 | |
| - | |
| Additions through business combination | |
| 35,926 | |
| Impairment | |
| - | |
| Currency translation adjustments | |
| - | |
| Carrying value at December 31, 2022 | |
| 35,926 | |
| At January 1, 2023 | |
| 35,926 | |
| Additions through business combination | |
| - | |
| Impairment | |
| - | |
| Currency translation adjustments | |
| - | |
| Carrying value at December 31, 2023 | |
| 35,926 | |
The assumptions used are as follows:
| Assumptions used |
|
December 31,
2023 |
|
| Discount rate (post-tax) |
|
|
12.83 |
% |
| Terminal growth rate |
|
|
2 |
% |
The
discount rate is based on comparable companies in the industry together with company-specific risks. Terminal growth rate is based on
management estimates and industry data.
The Company’s impairment review is sensitive
to changes in the assumptions used, most notably the discount rate and the terminal growth rate.
An increase of 1% in the discount rate would cause
the value-in-use of the CGU to reduce by $18.9 million but would not give rise to an impairment. A 1% reduction in perpetuity growth rate
would cause the value-in-use of the CGU to decrease by $13.6 million but would not give rise to an impairment. Based on sensitivity analysis
performed at December 31, 2023, an increase of the post-tax discount rate by 7.28% up to 20.11% would result in the carrying amount exceeding
the recoverable amount.
Based on the above
information, management concluded that there is no Goodwill impairment in 2023.
NOTE 11: Intangible assets
| Thousands of $ | |
Patents
and
Software
licenses | | |
Internally
developed
intangible
assets | | |
Externally
acquired
Intellectual
property | | |
Customers | | |
TOTAL | |
| Gross value | |
| | |
| | |
| | |
| | |
| |
| At January 1, 2022 | |
| 5,134 | | |
| 9,323 | | |
| 4,500 | | |
| - | | |
| 18,957 | |
| Additions | |
| | | |
| 1,049 | | |
| 325 | | |
| | | |
| 1,374 | |
| Additions through business combination (Note 3) | |
| | | |
| | | |
| 36,550 | | |
| 8,007 | | |
| 44,557 | |
| Currency translation adjustments | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross value at December 31, 2022 | |
| 5,134 | | |
| 10,372 | | |
| 41,375 | | |
| 8,007 | | |
| 64,888 | |
Accumulated amortization and impairment
At January 1, 2022 | |
| (4,910 | ) | |
| (7,736 | ) | |
| (2,863 | ) | |
| - | | |
| (15,509 | ) |
| Additions | |
| (224 | ) | |
| (942 | ) | |
| (1,490 | ) | |
| (513 | ) | |
| (3,169 | ) |
| Impairment | |
| | | |
| (44 | ) | |
| | | |
| | | |
| (44 | ) |
| Accumulated amortization and impairment at December 31, 2022 | |
| (5,134 | ) | |
| (8,722 | ) | |
| (4,353 | ) | |
| (513 | ) | |
| (18,722 | ) |
| Net value at December 31, 2022 | |
| 0 | | |
| 1,650 | | |
| 37,022 | | |
| 7,494 | | |
| 46,166 | |
| Gross value | |
| | | |
| | | |
| | | |
| | | |
| | |
| At January 1, 2023 | |
| 5,134 | | |
| 10,372 | | |
| 41,375 | | |
| 8,007 | | |
| 64,888 | |
| Additions | |
| | | |
| 2,660 | | |
| | | |
| | | |
| 2,660 | |
| Gross value at December 31, 2023 | |
| 5,134 | | |
| 13,032 | | |
| 41,375 | | |
| 8,007 | | |
| 67,548 | |
Accumulated amortization and impairment
At January 1, 2023 | |
| (5,134 | ) | |
| (8,722 | ) | |
| (4,353 | ) | |
| (513 | ) | |
| (18,722 | ) |
| Additions | |
| | | |
| (343 | ) | |
| (2,919 | ) | |
| (1,232 | ) | |
| (4,494 | ) |
| Currency translation adjustments | |
| | | |
| 5 | | |
| | | |
| | | |
| 5 | |
| Accumulated amortization and impairment at December 31, 2023 | |
| (5,134 | ) | |
| (9,060 | ) | |
| (7,272 | ) | |
| (1,745 | ) | |
| (23,211 | ) |
| Net value at December 31, 2023 | |
| 0 | | |
| 3,972 | | |
| 34,103 | | |
| 6,262 | | |
| 44,337 | |
Amortization of intangible assets is included
as a separate line in the statement of profit or loss.
The externally acquired intangible assets include
technology acquired in the business combination with NovioGendix in 2015 and with the acquisition of the GPS test in August 2022, and
increased by $36.6 million in 2022 due to the GPS acquisition. The estimated remaining amortization period amounts to 1.6 years for the
NovioGendix IP and to 13.6 years for the GPS IP.
Customer relationships includes customers acquired
in the GPS acquisition, resulting in the fair value at acquisition date of $8.0 million. The GPS customer relationships are amortized
over 6.5 years, the estimated remaining amortization period amounts to 5 years.
The internally-developed intangible assets relate
to the capitalized development expenses for Confirm mdx and Select mdx over the past years as well as for the development of the GPS assay
in-house and our Resolve mdx assay. The estimated remaining amortization period amounts to 0.2 years for Confirm mdx and Select mdx, 4
years for GPS, and 3.3 years for Resolve mdx. In 2023, the Company capitalized $2.7 million (2022: $1.0 million; 2021: $0) in GPS and
Resolve mdx development expenses.
NOTE 12: Property, plant and equipment and right of-use assets
Property, plant and equipment
| Thousands of $ | |
Laboratory equipment | | |
Furniture | | |
IT
equipment | | |
Leasehold
improvements | | |
TOTAL | |
| Gross value | |
| | |
| | |
| | |
| | |
| |
| At January 1, 2022 | |
| 5,285 | | |
| 569 | | |
| 673 | | |
| 1,341 | | |
| 7,868 | |
| Additions | |
| 1,695 | | |
| 104 | | |
| 277 | | |
| 713 | | |
| 2,789 | |
| Disposals | |
| | | |
| | | |
| (258 | ) | |
| | | |
| (258 | ) |
| Exchange rate difference arising | |
| 88 | | |
| (4 | ) | |
| (5 | ) | |
| 4 | | |
| 83 | |
| Gross value at December 31, 2022 | |
| 7,068 | | |
| 669 | | |
| 687 | | |
| 2,058 | | |
| 10,482 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation At January 1, 2022 | |
| (4,817 | ) | |
| (315 | ) | |
| (459 | ) | |
| (606 | ) | |
| (6,197 | ) |
| Additions | |
| (276 | ) | |
| (72 | ) | |
| (159 | ) | |
| (166 | ) | |
| (673 | ) |
| Disposals | |
| | | |
| | | |
| 258 | | |
| | | |
| 258 | |
| Exchange rate difference arising | |
| (91 | ) | |
| 7 | | |
| 3 | | |
| 2 | | |
| (79 | ) |
| Accumulated depreciation at December 31, 2022 | |
| (5,184 | ) | |
| (380 | ) | |
| (357 | ) | |
| (770 | ) | |
| (6,691 | ) |
| Net value at December 31, 2022 | |
| 1,884 | | |
| 289 | | |
| 330 | | |
| 1,288 | | |
| 3,791 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross value | |
| | | |
| | | |
| | | |
| | | |
| | |
| At January 1, 2023 | |
| 7,068 | | |
| 669 | | |
| 687 | | |
| 2,058 | | |
| 10,482 | |
| Additions | |
| 1,312 | | |
| 200 | | |
| 303 | | |
| 741 | | |
| 2,556 | |
| Disposals | |
| - | | |
| - | | |
| (111 | ) | |
| - | | |
| (111 | ) |
| Transfer from leases | |
| 498 | | |
| - | | |
| - | | |
| - | | |
| 498 | |
| Exchange rate difference arising | |
| (62 | ) | |
| (2 | ) | |
| (2 | ) | |
| (2 | ) | |
| (68 | ) |
| Gross value at December 31, 2023 | |
| 8,816 | | |
| 867 | | |
| 877 | | |
| 2,797 | | |
| 13,357 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation At January 1, 2023 | |
| (5,184 | ) | |
| (380 | ) | |
| (357 | ) | |
| (770 | ) | |
| (6,691 | ) |
| Additions | |
| (558 | ) | |
| (102 | ) | |
| (228 | ) | |
| (500 | ) | |
| (1,388 | ) |
| Disposals | |
| - | | |
| - | | |
| 108 | | |
| - | | |
| 108 | |
| Transfer from leases | |
| (498 | ) | |
| - | | |
| - | | |
| - | | |
| (498 | ) |
| Exchange rate difference arising | |
| 62 | | |
| 2 | | |
| 2 | | |
| 2 | | |
| 68 | |
| Accumulated depreciation at December 31, 2023 | |
| (6,178 | ) | |
| (480 | ) | |
| (475 | ) | |
| (1,268 | ) | |
| (8,401 | ) |
| Net value at December 31, 2023’ | |
| 2,638 | | |
| 387 | | |
| 402 | | |
| 1,529 | | |
| 4,956 | |
During 2023, the Company acquired $1.3 million
of laboratory equipment and $741,000 of leasehold improvements. In 2022, the company also acquired $1.7 million of laboratory equipment
and $713,000 of leasehold improvements. The primary purpose of these acquisitions was to add testing capacity for its new GPS and Resolve
assays.
Right of-use assets
| Thousands of $ | |
buildings | | |
vehicles | | |
Equipment | | |
TOTAL | |
| Gross value | |
| | |
| | |
| | |
| |
| Balance at January 1, 2022 | |
| 5,130 | | |
| 218 | | |
| 897 | | |
| 6,245 | |
| Additions | |
| 1,435 | | |
| 58 | | |
| 334 | | |
| 1,827 | |
| Exchange rate differences | |
| | | |
| | | |
| (1 | ) | |
| (1 | ) |
| Gross value at December 31, 2022 | |
| 6,565 | | |
| 276 | | |
| 1,230 | | |
| 8,071 | |
| | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation | |
| | | |
| | | |
| | | |
| | |
| Balance at January 1, 2022 | |
| (1,929 | ) | |
| (129 | ) | |
| (840 | ) | |
| (2,898 | ) |
| Additions | |
| (945 | ) | |
| (51 | ) | |
| (71 | ) | |
| (1,067 | ) |
| Exchange rate difference | |
| - | | |
| - | | |
| (3 | ) | |
| (3 | ) |
| Accumulated depreciation on December 31, 2022 | |
| (2,874 | ) | |
| (180 | ) | |
| (914 | ) | |
| (3,968 | ) |
| Net value at December 31, 2022 | |
| 3,691 | | |
| 96 | | |
| 316 | | |
| 4,103 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gross value | |
| | | |
| | | |
| | | |
| | |
| Balance at January 1, 2023 | |
| 6,565 | | |
| 276 | | |
| 1,230 | | |
| 8,071 | |
| Additions | |
| 726 | | |
| - | | |
| 1,562 | | |
| 2,288 | |
| Disposals | |
| - | | |
| (114 | ) | |
| (325 | ) | |
| (439 | ) |
| Transfer to tangible assets | |
| - | | |
| - | | |
| (498 | ) | |
| (498 | ) |
| Gross value on December 31, 2023 | |
| 7,291 | | |
| 162 | | |
| 1,970 | | |
| 9,423 | |
| | |
| | | |
| | | |
| | | |
| | |
| Accumulated depreciation | |
| | | |
| | | |
| | | |
| | |
| Balance at January 1, 2023 | |
| (2,874 | ) | |
| (180 | ) | |
| (914 | ) | |
| (3,968 | ) |
| Additions | |
| (1,079 | ) | |
| (34 | ) | |
| (252 | ) | |
| (1,365 | ) |
| Disposals | |
| - | | |
| 70 | | |
| 325 | | |
| 395 | |
| Transfer to tangible assets | |
| - | | |
| - | | |
| 498 | | |
| 498 | |
| Exchange rate differences | |
| 7 | | |
| - | | |
| - | | |
| 7 | |
| Accumulated depreciation on December 31, 2023 | |
| (3,946 | ) | |
| (144 | ) | |
| (343 | ) | |
| (4,433 | ) |
| Net value at December 31, 2023 | |
| 3,345 | | |
| 18 | | |
| 1,626 | | |
| 4,989 | |
In June 2022, the company entered into a 36-month
lease agreement (the “Plano lease”) for approximately 3,000 square feet of lab space in Plano, Texas with an effective date
of June 2022. The Plano lease was amended in November 2022 to add approximately 1,500 square feet of office space. Under the
terms of the Plano lease, the lease will automatically renew for successive 12-month periods after the end of the original term of the
agreement. In December 2023, the Plano lease was amended to add approximately 1,300 square feet of office space. Under the terms
of the lease agreements mentioned, the rental payments escalate through the term of each agreement and the Company is subject to additional
charges for common area maintenance and other costs.
In October 2022, the company renewed its lease
agreement for a term of 60 months for its facilities in Nijmegen, The Netherlands.
The new lease agreements from 2023 represent additional
right of use assets of a total value of $2.3 million.
The following amounts related to leases are recognized
in the statement of profit or loss:
| Thousands of $ | |
2023 | | |
2022 | | |
2021 | |
| Depreciation expense | |
| 1,187 | | |
| 1,067 | | |
| 905 | |
| Interest expense on lease liabilities | |
| 284 | | |
| 314 | | |
| 229 | |
NOTE 13: Inventories
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Raw materials and consumables | |
| 2,779 | | |
| 2,327 | |
| Total Inventories | |
$ | 2,779 | | |
$ | 2,327 | |
Inventories are recognized at the lower of cost
or net realizable value. Inventories recognized as an expense during the year ended December 31, 2023, amounted to $5.7 million (2022:
$3.6 million; 2021: $3.2 million). These were included in cost of sales.
NOTE 14: Trade and other receivables
Trade
receivables
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Trade receivables | |
| 11,088 | | |
| 9,357 | |
| Total trade receivables | |
| 11,088 | | |
| 9,357 | |
Trade receivables mainly consist of claims due
from our patients’ insurance companies related to our diagnostic tests.
Considering the Company’s revenue recognition
methodology further described in Note 2.7, total accounts receivable balance could be presented in relation with the claim date of each
sample as follows:
| A/R by claim date | |
Months | |
Thousands of $
For the year ended December 31, 2023 | |
1-3
months | | |
4-6
months | | |
7-12
months | | |
Not due | | |
Total | |
| Confirm mdx | |
| 2,225 | | |
| 876 | | |
| 639 | | |
| - | | |
| 3,740 | |
| Select mdx | |
| 291 | | |
| 101 | | |
| 128 | | |
| (8 | ) | |
| 512 | |
| Resolve mdx | |
| 1,278 | | |
| 629 | | |
| 401 | | |
| - | | |
| 2,308 | |
| GPS | |
| 3,237 | | |
| 783 | | |
| 508 | | |
| - | | |
| 4,528 | |
| Total Trade Receivables | |
| 7,031 | | |
| 2,389 | | |
| 1,676 | | |
| (8 | ) | |
| 11,088 | |
| A/R by claim date | |
Months | |
Thousands of $
For the year ended December 31, 2022 | |
1-3
months | | |
4-6
months | | |
7-12
months | | |
Not due | | |
Total | |
| Confirm mdx | |
| 1,865 | | |
| 821 | | |
| 765 | | |
| - | | |
| 3,451 | |
| Select mdx | |
| 134 | | |
| 101 | | |
| 78 | | |
| 25 | | |
| 338 | |
| Resolve mdx | |
| 1,966 | | |
| 458 | | |
| 158 | | |
| - | | |
| 2,582 | |
| GPS | |
| 1,907 | | |
| 895 | | |
| - | | |
| - | | |
| 2,802 | |
| Other | |
| 163 | | |
| - | | |
| - | | |
| 21 | | |
| 184 | |
| Total Trade Receivables | |
| 6,035 | | |
| 2,275 | | |
| 1,001 | | |
| 46 | | |
| 9,357 | |
Prepaid expenses and other
current assets
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Prepayments | |
| 1,585 | | |
| 1,710 | |
| Deposits | |
| 110 | | |
| 101 | |
| Recoverable VAT | |
| 183 | | |
| 97 | |
| Grants to be received | |
| - | | |
| 54 | |
| Other | |
| 36 | | |
| - | |
| Total prepaid expenses and other current assets | |
$ | 1,914 | | |
$ | 1,962 | |
Prepaid expenses mainly consist of prepaid insurance
premiums and prepaid maintenance contracts.
All financial assets carried at amortized cost
are shown net of expected credit losses which are not deemed material.
NOTE 15: Cash and cash equivalents
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Cash and cash equivalents | |
| 22,380 | | |
| 15,503 | |
| Total cash and cash equivalents | |
$ | 22,380 | | |
$ | 15,503 | |
The bank balances and cash held by the Company
and short-term bank deposits have an original maturity of less than 3 months. The carrying amount of these assets approximates their fair
value.
The Company had no restricted cash in 2023 and 2022.
NOTE 16: Loans, Borrowings, Leases obligations
and other financial liabilities
Loans, Borrowings & Lease liabilities
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Non-current loans and borrowings | |
| | |
| |
| Loans | |
| 35,564 | | |
| 34,914 | |
| Lease liabilities (*) | |
| 3,578 | | |
| 3,091 | |
| Total non-current loans and borrowings | |
$ | 39,142 | | |
$ | 38,005 | |
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Current loans and borrowings | |
| | |
| |
| Loans | |
| 643 | | |
| 616 | |
| Lease liabilities (*) | |
| 1,480 | | |
| 1,172 | |
| Total current loans and borrowings | |
$ | 2,123 | | |
$ | 1,788 | |
| (*) | the
evolution in the right of use assets is further disclosed in Note 12. |
Innovatus debt facility
On August 2, 2022, the Company entered into a
$70 million loan and security agreement with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), which loan also replaced
the Company’s €9 million debt facility with Kreos Capital. At closing, an amount of $35 million was drawn, with an additional
$35 million remaining available as a $20 million term B loan and a $15 million term C loan that can be drawn in 2024 and 2025 respectively,
subject to certain conditions whereby there can be no assurance that these conditions will be satisfied and that the Company will be able
to draw any further term loan amounts under this facility. The loans are secured by assets of the Company including intellectual property
rights. Remaining proceeds of the loans will be used for working capital purposes and to fund general business requirements.
The loans accrue interest at a floating per annum
rate equal to the sum of (a) the greater of (i) the prime rate published in The Wall Street Journal in the “Money Rates” section
or (ii) 4.00%, plus (b) 4.25%, and require interest-only payments for the initial four years. As contractually agreed, and at the election
of the Company, a portion of the interest becomes payable in-kind by adding an amount equal to 2.25% of the outstanding principal amount
to the then outstanding principal balance on a monthly basis until August 2, 2025. The loans mature on August 2, 2027. The lenders shall
have the right to convert, prior to August 2, 2025, up to 15% of the outstanding principal amount of the loans into shares of the Company
at a price per share equal to $11.21, reflecting a substantial premium to the trading price prior to the announcement of the acquisition.
Amounts converted into shares of the Company will be reduced from the principal amount outstanding under the loan. Notable fees payable
to Innovatus consist of a facility fee equal to 1% of the total loan commitment, due on the funding date of the relevant loans, and an
end-of-loan fee equal to 5% of the amount drawn, payable upon final repayment of the relevant loans.
Security has been granted over all assets (including
IP rights) owned by the Company and MDxHealth, Inc. The loan agreement contains customary financial covenants and general affirmative
and negative covenants, including limitations on the Company’s ability to transfer or dispose of assets, change our business, merge
with or acquire other companies, incur additional indebtedness and liens, make investments, pay dividends and conduct transactions with
affiliates.
The Innovatus debt facility has been accounted
for as a hybrid financial instrument which includes a host financial liability as well as an embedded derivative financial instrument
being an equity conversion call option at a fixed rate of up to 15% of the aggregate outstanding principal amount through August 2, 2025.
The
embedded derivative is not considered to be closely related to the host financial liability given the differences in economics and risks,
and as such both are accounted for separately:
| ● | The
host financial liability is recognized at amortized cost applying the effective interest rate method and has been accounted for as non-current
loans and borrowings; |
| ● | The
embedded derivative convertible (American) call option is recognized at fair value using a binomial tree option pricing model whereby
the fair value is based on the actual stock price and the estimated volatility of the Company’s shares on Nasdaq since the Company’s
IPO on November 4, 2021, and through the valuation date. The volatility measured on August 2, 2022, which was the closing date of the
Innovatus debt facility, was 62.85% and at December 31, 2023 was 72.92% (2022: 64.82%). Any changes to the fair value of the embedded
derivative will be recognized through the statement of profit or loss. The derivative financial instrument has been accounted for as
other current financial liabilities. |
Kreos debt facility
As part of the new debt facility with Innovatus,
the Company’s debt facility with Kreos for an outstanding principal amount of €9 million has been fully repaid in cash in September
2022, for a total amount of $10.8 million. This repayment included the two convertible loans of €180,000 ($185,364) and €202,500
($208,535) that were not converted by Kreos and that were entered into as part of amendments to the original Kreos debt facility.
The 2022 repayment did not include the derivative
financial liability for the initial Kreos drawdown fee which had an estimated fair value on December 31, 2022, of $891,000 and is included
in Other financial liabilities as a separate financial instrument valued at fair-value through statement of profit or loss for the year
ended December 31, 2022. This financial liability is payable upon demand in cash, or convertible into the Company’s common stock,
upon election by Kreos.
In June 2023, Kreos provided notice to the Company
of the cancelation of the convertible loan associated with the initial drawdown fee and requested repayment in cash. As such, Kreos was
entitled to a cash repayment of €945,000 ($1.0 million) which is equal to 150% of the initial drawdown fee of €630,000. The
Company has paid €472,500 ($513,419) in July 2023, and an additional €472,500 ($513,419) in October 2023, and has no further
liabilities toward Kreos as of December 31, 2023.
On April 20, 2020, the Company, through its U.S.
subsidiary, MDxHealth Inc., has entered into a “Paycheck Protection Program” (PPP) loan with the U.S. Small Business Administration
(SBA) in the amount of $2,316,000 as part of the U.S Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan has a term of
five years and carries an interest rate of 1.0% per year. Payments on the loan are deferred for the first eighteen months following disbursement
of the loan, with principal and interest payments beginning on the nineteenth month. Interest on the loan continues to accrue during the
eighteen-month deferment period. Cash proceeds from the loan were received in July 2020. As of December 31, 2023, the outstanding amount
on the PPP loan was $1.0 million.
In addition to the contracted loans, the Company
has several lease obligations. The leases have terms of 3 to 5 years.
Maturity of loans and borrowings are as follows
at the balance sheet date:
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Loans | |
| | |
| |
| Within one year | |
| 643 | | |
| 630 | |
| Years two to five | |
| 35,564 | | |
| 38,439 | |
| | |
| | | |
| | |
| Leases | |
| | | |
| | |
| Within one year | |
| 1,900 | | |
| 1,551 | |
| Years two to five | |
| 3,955 | | |
| 2,330 | |
Note: all figures shown in this table are undiscounted
and reflect future cash payments (capital and interests)
Other financial liabilities
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Other financial liabilities | |
| | |
| |
| Other non-current financial liabilities | |
| 63,259 | | |
| 53,537 | |
| Other current financial liabilities | |
| 2,895 | | |
| 2,327 | |
| Total other financial liabilities | |
| 66,154 | | |
| 55,864 | |
GPS Contingent consideration
As part of the acquisition of the GPS business
from Exact Sciences in August 2022, and the subsequent amended asset purchase agreement from August 2023, an aggregate earnout amount
of up to $82.5 million is to be paid by MDxHealth to Exact Sciences upon achievement of certain revenue milestones related to fiscal years
2023 through 2025, with the maximum earnout payable in relation to 2023 and 2024 not to exceed $30 million and $40 million, respectively.
The liability recognized reflects a probability-weighted estimate at the current net present value which is expected to become payable.
Future fair value adjustments to this contingent consideration will be recognized in the statement of profit or loss. The value of the
contingent liability for GPS including the fair value adjustment accounted for under other non-current financial liabilities is $62.6
million as of December 31, 2023.
MDxHealth option to settle earnout obligation in shares
The fair value of the Company’s option to
settle the earnout obligation in cash or through the issuance of additional shares of the Company, was measured using a Monte Carlo valuation
model which takes into account several factors including the expected evolution in Company’s share price. This valuation model is
considered as level 3 input and was assessed at $0.8 million financial asset, as of December 31, 2023.
Exact Sciences 5-year warrants to acquire 1
million shares of MDxHealth
The fair value of the warrant held by Exact Sciences
to acquire up to 1 million shares of MDxHealth was measured using a Binomial tree valuation model which takes into account several factors
including the expected evolution in the Company’s share price. This valuation model is considered as level 3 input and was assessed
at $2.2 million financial liability as of December 31, 2023.
Innovatus embedded derivative convertible call
option
The embedded derivative convertible (American)
call option is recognized at fair value within other current financial liabilities and is measured using a Binomial tree valuation model
which takes into account several factors including the expected evolution in the Company’s share price. The fair value of the liability
is estimated at $192,000 for the year ended December 31, 2023.
Kreos derivative financial instrument (“initial
drawdown fee”)
As of December 31, 2023, the convertible loan
associated with the initial drawdown fee payable to Kreos has been fully off in cash and as such, the fair value of the financial derivative
has been reduced to zero as no further liabilities to Kreos exist.
As of December 31, 2022, the fair value of the
financial derivative related to the initial drawdown fee of the Kreos loan was computed as the sum of the probability-weighted values
of the fair values associated with each of the possible outcomes and amounted to $891,000 as of December 31, 2022. The derivative financial
instrument is accounted for within other current financial liabilities for the year ended December 31, 2022.
Other financial liabilities
Other financial liabilities include the contingent
consideration related to the acquisition of NovioGendix in 2015 and amounts to $1.2 million of which $550,000 is considered to be current.
The contingent consideration is valued at fair value through the statement of profit or loss. The fair value of this contingent consideration
is reviewed on a periodic basis. The fair value is based on a risk-adjusted future cash flows of different scenarios discounted using
an interest rate of 12.83%. The structure of the possible scenarios and the probability assigned to each scenario is reassessed by management
at every reporting period and requires judgement from management about the outcome and probability of the different scenarios (refer to
Note 26 for further details).
A reconciliation of cash and non-cash movements
of loans and borrowings, lease liabilities and other financial liabilities is presented below:
| Thousands of $ | |
Loans and
borrowings | | |
Other financial
liabilities | |
| For the years ended December 31 | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Beginning balance | |
| 35,530 | | |
| 12,092 | | |
| 55,864 | | |
| 2,427 | |
| Cash movements | |
| | | |
| | | |
| | | |
| | |
| Loans and borrowings repaid1 (Kreos / PPP) | |
| (637 | ) | |
| (10,805 | ) | |
| (1,022 | ) | |
| | |
| Loans and borrowings received (Innovatus) | |
| | | |
| 34,291 | | |
| | | |
| | |
| Non-cash movements | |
| | | |
| | | |
| | | |
| | |
| GPS Contingent Consideration | |
| | | |
| | | |
| | | |
| 50,483 | |
| Recognition of Innovatus embedded derivative convertible call option | |
| | | |
| (1,026 | ) | |
| | | |
| 1,026 | |
| Kreos effective interest rate adjustment and extinguishment costs | |
| | | |
| 1,328 | | |
| | | |
| | |
| Innovatus - effective interest rate adjustment | |
| 1,314 | | |
| 660 | | |
| | | |
| | |
| Foreign exchange rate impact / other | |
| | | |
| (1,010 | ) | |
| (4 | ) | |
| (35 | ) |
| Fair value changes through profit and loss | |
| | | |
| | | |
| 11,316 | | |
| 1,963 | |
| Ending balance | |
$ | 36,207 | | |
$ | 35,530 | | |
$ | 66,154 | | |
$ | 55,864 | |
| 1 | The
amount includes interest paid on loans and borrowings |
Fair value adjustments recognized during 2023
for other financial liabilities relate to:
Thousands of $
For the years ended December 31 | |
2023 | |
| Increase of NovioGendix contingent consideration | |
| 16 | |
| Increase of Kreos derivative financial instrument (“initial drawdown fee”) | |
| 135 | |
| Increase of GPS contingent consideration | |
| 9,730 | |
| Decrease of Innovatus embedded derivative convertible call option | |
| (718 | ) |
| Exact Sciences 5-Year Warrants | |
| 2,153 | |
| Total fair value adjustment | |
| 11,316 | |
| Thousands of $ | |
Lease liabilities | |
| For the years ended December 31 | |
2023 | | |
2022 | |
| Opening balance | |
| 4,263 | | |
| 3,464 | |
| Cash movements | |
| | | |
| | |
| Repayment of lease liabilities | |
| (1,610 | ) | |
| (1,358 | ) |
| Non-cash movements | |
| | | |
| | |
| Interest accretion | |
| 355 | | |
| 314 | |
| New leases | |
| 2,050 | | |
| 1,843 | |
| Closing balance | |
| 5,058 | | |
| 4,263 | |
NOTE 17: Contractual obligations
Thousands of $
For The Years ended December 31 | |
2023 | | |
2022 | |
| Outstanding commitments for future minimum rent payments, which fall due as follows: | |
| | |
| |
| Less than one year | |
| 90 | | |
| 156 | |
| Years 2-5 | |
| 53 | | |
| 60 | |
| Total contractual obligations | |
| 143 | | |
| 216 | |
For 2023 and 2022, we refer to Note 12 and 16
for the lease liabilities subsequent adoption and application of IFRS 16.
Outstanding commitments for future minimum rent
payments include rental fees related to leased facilities, and equipment for assets with a value below $5,000 or with short-term duration.
These lease contracts can be terminated early with certain indemnity fees. All figures shown assume that the lease contracts will not
be terminated early.
NOTE 18: Trade and other payables
Trade
accounts payable
Thousands of $
For The Years ended December 31 | |
2023 | | |
2022 | |
| Trade accounts payable | |
| 4,889 | | |
| 5,061 | |
| Accruals for invoices to be received | |
| 3,922 | | |
| 5,117 | |
| Total trade accounts payable | |
| 8,811 | | |
| 10,178 | |
Other
current liabilities
Thousands of $
For The Years ended December 31 | |
2023 | | |
2022 | |
| Payroll | |
| 5,222 | | |
| 3,932 | |
| Other accruals | |
| 472 | | |
| 53 | |
| Total other current liabilities | |
| 5,694 | | |
| 3,985 | |
NOTE 19: Financial instruments and fair
value
The table shows the Company’s significant
financial assets and liabilities. All financial assets and liabilities are carried at amortized cost with the exception of the contingent
considerations in relation to acquisitions and derivative financial instruments reported at fair value through the statement of profit
or loss.
All financial assets and liabilities are considered
to have carrying amounts that do not materially differ from their fair value.
Thousands of $
For The Years ended December 31 | |
2023 | | |
2022 | | |
Fair value hierarchy |
| Assets | |
| | |
| | |
|
| At amortized cost | |
| | |
| | |
|
| Trade receivables | |
| 11,088 | | |
| 9,357 | | |
|
| Cash and cash equivalents | |
| 22,380 | | |
| 15,503 | | |
|
| Total financial assets | |
| 33,468 | | |
| 24,860 | | |
|
| | |
| | | |
| | | |
|
| Liabilities | |
| | | |
| | | |
|
| At fair value: | |
| | | |
| | | |
|
| Other financial liabilities | |
| | | |
| | | |
|
| GPS contingent consideration | |
| 62,611 | | |
| 52,881 | | |
Level 3 |
| Exact Sciences 5-Year Warrants | |
| 2,153 | | |
| - | | |
Level 3 |
| NovioGendix contingent consideration | |
| 1,198 | | |
| 1,182 | | |
Level 3 |
| Innovatus derivative instrument | |
| 192 | | |
| 910 | | |
Level 3 |
| Kreos derivative instrument | |
| - | | |
| 891 | | |
Level 3 |
| Subtotal financial liabilities at fair value | |
| 66,154 | | |
| 55,864 | | |
|
| | |
| | | |
| | | |
|
| At amortized cost: | |
| | | |
| | | |
|
| Loans and borrowings | |
| 36,207 | | |
| 35,530 | | |
Level 2 |
| Lease liabilities | |
| 5,058 | | |
| 4,263 | | |
|
| Trade payables | |
| 8,811 | | |
| 10,178 | | |
|
| Subtotal financial liabilities at amortized cost | |
| 50,076 | | |
| 49,971 | | |
|
| Total financial liabilities | |
| 116,230 | | |
| 105,835 | | |
|
Recognized fair value measurements – valuation technique and
principal inputs
The fair value of the financial instruments has
been determined on the basis of the following methods and assumptions:
| ● | The
carrying value of the cash and cash equivalents, the trade receivables, other current assets and the trade payables approximate their
fair value due to their short-term character; |
| ● | The
fair value of loans and borrowings applying the Effective Interest Rate method approximates their carrying value (level 2). |
| ● | Innovatus
debt facility: the host financial liability was obtained with a variable interest rate based upon the Prime Rate (with a floor of
4% and a margin of 4.25%) |
| ● | Paycheck
Protection Program (PPP): applying a market rate would not result in a materially different fair value which carries an interest
rate of 1% and was obtained as part of the U.S Coronavirus Aid, Relief, and Economic Security (CARES) Act |
| ● | Kreos
debt facility: Given full repayment of the convertible loan associated with the initial drawdown fee, no fair value assessment was
performed as of December 31, 2023 |
| ● | Leases
are measured at the present value of the remaining lease payments, using a discount rate based on the incremental borrowing rate at the
commencement date of these leases. Their fair value approximates their carrying value. |
| ● | The
fair value of contingent consideration payable to Exact Sciences (for the GPS acquisition) and NovioGendix (presented in the yearend
statement of financial position under “other non-current financial liabilities” and “other current financial liabilities”)
is based on an estimated outcome of the conditional purchase price/contingent payments arising from contractual obligations (level 3).
This is initially recognized as part of the purchase price and subsequently fair valued with changes recorded through other operating
income in the statement of profit or loss. |
| o | GPS:
The fair value of the contingent consideration payable to Exact Sciences is based on a probability-weighted average estimate based on
multiple scenarios varying in timing and amount of earnout payment. This probability-weighted estimate of a payout of $82.5 million over
the full earnout period is then discounted to its net present value taking into account expected time when earnout would become payable
in 2025, 2026, and 2027. This contingent consideration was initially recorded along with the purchase price allocation of this business
combination as explained in Note 3. Fair-value adjustments resulting in total charges of $10.0 million have been recorded as of December
31, 2023, of which $9.4 million is in financial expense and $0.6 million is in operating expense. The Company used a discount rate of
12.83%. |
| |
o |
NovioGendix: the Company used a discount rate of 12.83%. A net positive fair value measurement of $16,000 was recognized in the 2023 consolidated financial statements, of which $37,000 in operating income and $53,000 in financial expense. |
| ● | The
fair value of the derivative financial liabilities related to the Innovatus derivative call option (as detailed in Note 16) was performed
using a binomial pricing model which takes into account several factors including the expected evolution in share price and are considered
as level 3 input. The fair value of the liability is estimated at $192,000 for the year ended December 31, 2023. An increase in volatility
by 10% would result in an increase of the liability by $102,000, and a decrease in volatility by 10% would result in a decrease of the
liability by $65,000. |
| ● | Exact
Sciences 5-Year Warrants: The fair value of the warrant held by Exact Sciences to acquire up to 1 million shares of MDxHealth was measured
using a Binomial tree valuation model which takes into account several factors including the expected evolution in the Company’s
share price starting from the share price on December 31, 2023 of $3.94 with an estimated volatility of 72.99% and a contractual strike
price of $5.265. This valuation model is considered as a level 3 input and was assessed at $2.2 million financial liability as of December
31, 2023. An increase in volatility by 10% would result in an increase of the liability by $253,000, and a decrease in volatility by
10% would result in a decrease of the liability by $277,000. |
| ● | Financial
instruments are evaluated based on the mark-to-market report and the unrealized gains (loss) are recognized through the statement of
profit or loss. |
Fair value
hierarchy:
The Company uses the following hierarchy for determining
and disclosing the fair value of financial instruments by valuation technique:
| ● | Level
1: quoted prices in active markets for identical assets and liabilities; |
| ● | Level
2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly; and |
| ● | Level
3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market
data. |
No financial assets or financial liabilities
have been reclassified between the valuation categories during the year.
A reconciliation of cash and non-cash movements
of level 3 financial liabilities is presented below:
| Thousands of $ | |
Financial Derivative
Instruments (Kreos
and Innovatus) | | |
Contingent
Consideration
(NovioGendix and GPS) | |
| For the years ended December 31 | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Beginning balance | |
| 1,801 | | |
| 810 | | |
| 54,063 | | |
| 1,617 | |
| Cash movements | |
| | | |
| | | |
| | | |
| | |
| Loans and borrowings repaid | |
| (1,022 | ) | |
| | | |
| (250 | ) | |
| | |
| Non-cash movements | |
| | | |
| | | |
| | | |
| | |
| GPS contingent consideration | |
| | | |
| | | |
| | | |
| 50,483 | |
| Exact Sciences 5-year warrant | |
| | | |
| | | |
| 2,153 | | |
| | |
| Innovatus embedded derivative convertible call option | |
| | | |
| 1,026 | | |
| | | |
| | |
| Effective interest rate adjustment | |
| (4 | ) | |
| | | |
| | | |
| | |
| Foreign exchange rate impact / other movements | |
| | | |
| (35 | ) | |
| | | |
| | |
| Fair value changes through profit and loss | |
| (719 | ) | |
| | | |
| 9,996 | | |
| 1,963 | |
| Change to level 1 fair value hierarchy | |
| 136 | | |
| | | |
| | | |
| | |
| Ending balance | |
| 192 | | |
| 1,801 | | |
| 65,962 | | |
| 54,063 | |
NOTE 20: Loss per share
The basic loss per share is calculated by dividing
the net result attributable to shareholders by the weighted average number of shares outstanding during the year, adjusted for the 1-for-10
reverse stock split that took place in November 2023.
| Years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Loss for the year, in thousands of $ | |
| (43,100 | ) | |
| (44,044 | ) | |
| (29,002 | ) |
| Basic and diluted loss per share, in $ | |
| (1.66 | ) | |
| (2.78 | ) | |
| (2.38 | ) |
| Weighted average number of shares | |
2023 | | |
2022 | | |
2021 | |
| Weighted average number of shares for basic and diluted loss per share | |
| 25,910,696 | | |
| 15,865,817 | | |
| 12,193,574 | |
At December 31, 2023, 2022, and 2021, the Company
had potential dilutive shares in the form of warrants, contingent considerations and convertible loans (see Note 16 and Note 24 for further
details). Diluted loss per share considers the impact of potentially dilutive securities except in periods in which there is a loss because
the inclusion of the potential common shares would have an anti-dilutive effect.
NOTE 21: Financial Risk Management
Capital
management
Capital is comprised of equity attributable to
shareholders, borrowings, and cash and cash equivalents. The Company aims to maintain a strong capital base in order to maintain investor
and creditor confidence and to sustain the future development of the business. The Company’s objectives when managing capital are
to maintain sufficient liquidity to meet its working capital requirements, fund capital investment and purchases, and safeguard its ability
to continue operating as a going concern. The Company monitors capital regularly to ensure that the statutory capital requirements are
met and may propose capital increases at shareholders’ meetings to ensure the necessary capital remains intact.
Credit
risk
Credit risk arises from cash and cash equivalents,
short-term bank deposits, as well as credit exposure to collaboration partners. Credit risk refers to the risks that counterparty will
default on its contractual obligations resulting in financial loss to the Company.
At the end of 2023, the Company operated with
more than 1,000 different customers, systematically reducing credit risk compared to prior periods.
In the U.S. healthcare system, and particularly
within the molecular diagnostic CLIA laboratory industry, where there are rapid technological advances in diagnostic services, companies
provide services to healthcare professionals and their patients, while being reimbursed from commercial and governmental insurance systems.
Often these services are provided out of network and without supplier contracts. As a result, there is reimbursement risk, separate from
credit risk that is characterized by uncertainty in reimbursement value, delays in payment, and ultimately non-payment. This impacts the
Company’s revenue recognition and cash collections.
In addition to reimbursement risk associated with
commercial third-party payors, credit risk may also arise from amounts due directly from patients. In many cases, payors will cover the
entire cost of testing. For example, for tests that fall under the Clinical Laboratory Fee Schedule, there is no co-payment, co-insurance
or deductible for patients covered under traditional Medicare. However, patients covered by commercial insurance companies may be responsible
for a co-payment, co-insurance, and/or deductible depending on the health insurance plan and individual patient benefit. Credit risk exists
for those patients who cannot meet their co-payment or deductible portions.
Customers’ compliance with agreed credit
terms is regularly and closely monitored. Trade accounts receivable amounted to $11.1 million as of December 31, 2023, and no allowance
for expected credit loss was recorded. No ECL has been recorded for other financial assets carried at amortized cost as there is no related
credit risk.
The credit risk on cash and cash equivalents of
$22.4 million is limited given that the counterparties are banks with high credit scores attributed by international rating agencies.
The Company had no exposure to Silicon Valley Bank, Silvergate Bank, or Credit Suisse.
Interest
risk
During 2022, the Company entered into a 60-month
loan with Innovatus for a total amount of $35 million (refer to Note 16 for further details). The loan accrues interest at a floating
per annum rate equal to the sum of (a) the greater of (i) the Prime rate published in The Wall Street Journal in the “Money Rates”
section or (ii) 4.00%, plus (b) 4.25%, and require interest-only payments for the initial four years. For every increase of 0.25% in the
Prime rate, the Company’s interest expense increases by approximately $90,000 per year.
In addition, on April 20, 2020, the Company, through
its U.S. subsidiary, MDxHealth Inc., has entered into a “Paycheck Protection Program” (PPP) loan with the U.S. Small Business
Administration (SBA) in the amount of $2,316,000 as part of the U.S Coronavirus Aid, Relief, and Economic Security (CARES) Act. The amortized
cost is calculated using the effective interest method, which allocates interests and expenses at a constant rate over the term of the
instrument; the effective interest rate for the loan is 1.00%. Considering the fixed interest rate, the Company is not exposed to interest
risk, thus did not perform any sensitivity analysis.
Currency
risk
The functional currency changed from the EURO
to the U.S. Dollar as of July 1, 2014. Consequently, the currency risk is concentrated on European operations.
As of December 31, 2023, cash deposits in EURO
amounted to €357,000.
The Company performed a sensitivity analysis of
an increase/decrease of exchange rate on operations of 10%. The exposure of operations to the currency risk is immaterial given the limited
size of the European operations and contribution to revenues versus the Company as a whole.
Liquidity
risk
The Company manages liquidity risk by maintaining
adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities. At the date of this report, the Company has 2 loan agreements with banks and state institutions, and 12 leases (see Notes
12 and 16).
For the years ended December 31, 2023 Thousands of $ | |
Less than
1 year | | |
1-2
years | | |
3-5
years | | |
Total
contractual
cash flows | | |
Carrying
amount | |
| Non derivatives | |
| | |
| | |
| | |
| | |
| |
| Trade payables | |
| 8,811 | | |
| - | | |
| - | | |
| 8,811 | | |
| 8,811 | |
| Loans | |
| 650 | | |
| 324 | | |
| 37,442 | | |
| 38,416 | | |
| 36,207 | |
| Lease liabilities | |
| 1,900 | | |
| 1,766 | | |
| 2,189 | | |
| 5,855 | | |
| 5,058 | |
| Total | |
| 11,361 | | |
| 2,090 | | |
| 39,631 | | |
| 53,082 | | |
| 50,076 | |
For the years ended December 31, 2022 Thousands of $ | |
Less than
1 year | | |
1-2
years | | |
3-5
years | | |
Total
contractual
cash flows | | |
Carrying
amount | |
| Non derivatives | |
| | |
| | |
| | |
| | |
| |
| Trade payables | |
| 10,178 | | |
| - | | |
| - | | |
| 10,178 | | |
| 10,178 | |
| Loans | |
| 630 | | |
| 630 | | |
| 37,809 | | |
| 39,069 | | |
| 35,530 | |
| Lease liabilities | |
| 1,324 | | |
| 915 | | |
| 2,179 | | |
| 4,418 | | |
| 4,263 | |
| Total | |
| 12,132 | | |
| 1,545 | | |
| 39,988 | | |
| 53,665 | | |
| 49,971 | |
Note: Except for carrying amount, all figures shown in this table
are undiscounted and reflect future cash payments
The Company is also committed to a potential additional
cash out of an aggregate earnout amount of up to $82.5 million that could become payable in cash by MDxHealth to Exact Sciences upon achievement
of certain revenue milestones related to fiscal years 2023 through 2025 and payable during 2025 through 2027. At the option of MDxHealth,
the earnout amounts to Exact Sciences can be settled in cash or through the issuance of additional shares of the Company (valued in function
of a volume weighted average trading price of the Company’s shares at the end of the relevant earnout period) to Exact Sciences, provided
that the aggregate number of shares held by Exact Sciences shall not exceed more than 7.5% of the outstanding shares of MDxHealth. The
Company is unable to determine the exact amounts payable to Exact Sciences in each of the coming years, as those amounts are dependent
on the GPS revenues that the Company will achieve in 2024 and 2025.
Other
risks
The Company subscribes to certain insurance policies
to cover matters such as (i) fire, theft, and other damage to its assets, (ii) product and liability insurance and clinical trial insurance,
and (iii) D&O insurance. To date, no significant claims have been made under these insurance policies and there is no guarantee that
the insurances will cover all damages if they should ever occur.
NOTE 22: Share capital and reserves
At December 31, 2023 and 2022, the Company’s
share capital was represented by the following number of shares, adjusted for the 1-for-10 reverse stock split that took place in November
2023. Only one class of shares (common shares) exists and they have no par value.
| For the Years ended December 31 | |
2023 | | |
2022 | |
| Common shares | |
| 27,288,093 | | |
| 16,288,093 | |
| Total outstanding shares | |
| 27,288,093 | | |
| 16,288,093 | |
On August 11, 2022, to settle a portion of the
purchase price for the acquisition by the Company of the GPS test from Genomic Health, Inc. (a subsidiary of Exact Sciences Corporation)
announced on August 2, 2022, the Company issued 691,171 shares, at a price per share of $7.23, totaling $5 million. As a result, the Company’s
share capital has increased from €118,662,067.69 to €123,539,165.19 and the number of issued and outstanding shares has increased
from 15,596,922 to 16,288,093 ordinary shares.
In March 2023, the Company completed a registered
public offering of 10.75 million shares at a price to the public of $4 per share for total gross proceeds of $43.0 million before deducting
commissions and offering expenses of $3.4 million. As a result, the Company’s share capital has increased from €123,539,165.19
to €163,471,629.58, and the number of issued and outstanding shares has increased from 16,288,093 to 27,038,093 ordinary shares.
On August 23, 2023, the Company and Exact Sciences
Corporation amended their existing Oncotype DX GPS prostate cancer business asset purchase agreement, deferring the Company’s initial
earnout payment by 3 years, from 2024 to 2027. As part of this amendment, the Company issued Exact Sciences 250,000 of the Company’s
shares. As a result of this issuance, the Company’s share capital increased from €163,471,629.58 to €164,302,752.89 and
the number of issued and outstanding shares has increased from 27,038,093 to 27,288,093 ordinary shares.
| | |
Thousands of $ | | |
Thousands of € | |
| For the Years ended December 31 | |
Share
Capital | | |
Issuance
Premium | | |
Share
Capital | | |
Issuance
Premium | |
| As of January 1, 2022 | |
| 128,454 | | |
| 153,177 | | |
| 106,099 | | |
| 126,481 | |
| August 2022 – Issuance of 691,171 shares (*) | |
| 5,000 | | |
| | | |
| 4,876 | | |
| | |
| As of December 31, 2022 | |
| 133,454 | | |
| 153,177 | | |
| 110,975 | | |
| 126,481 | |
| March 2023 – Issuance of 10,750,000 shares (*) | |
| 39,599 | | |
| | | |
| 36,612 | | |
| | |
| August 2023 – Issuance of 250,000 shares | |
| 878 | | |
| | | |
| 812 | | |
| | |
| As of December 31, 2023 | |
| 173,931 | | |
| 153,177 | | |
| 148,398 | | |
| 126,481 | |
The capital stock and the issuance premium amounted to the following:
| | |
Thousands of $ | | |
Thousands of € | |
| For the Years ended December 31 | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Share Capital as per statutory accounts | |
| 192,297 | | |
| 148,419 | | |
| 164,303 | | |
| 123,539 | |
| Capital increase costs | |
| (18,366 | ) | |
| (14,965 | ) | |
| (15,905 | ) | |
| (12,564 | ) |
| Share capital under IFRS | |
| 173,931 | | |
| 133,454 | | |
| 148,398 | | |
| 110,975 | |
| Issuance premium | |
| 153,177 | | |
| 153,177 | | |
| 126,481 | | |
| 126,481 | |
| Share capital and issuance premium | |
| 327,108 | | |
| 286,631 | | |
| 274,879 | | |
| 237,456 | |
The history of the Share Capital can be found in “General Information;
Capital and Shares”.
By virtue of the resolution of the extraordinary
general shareholders’ meeting of the Company held on May 27, 2021, which entered into force on June 1, 2021, the board of directors
of the Company has been granted certain powers to increase the Company’s share capital in the framework of the authorized capital.
The powers under the authorized capital have been set out in article 6 of the Company’s articles of association.
Pursuant to the authorization granted by the extraordinary
general shareholders’ meeting of June 30, 2023, the board of directors was authorized to increase the share capital of the Company
on one or several occasions by a maximum aggregate amount of €163,471,629.58 (excluding issue premium, as the case may be) for a
period of 5 years as from July 7, 2023.
The board of directors has used its powers under
the authorized capital on the occasion of the amendment of its agreement with Exact Sciences, by issuing 250,000 new shares to Exact Sciences.
As a result, the board of directors therefore still has the authority under the authorized capital to increase the Company’s share
capital with an aggregate amount of €162,640,506.27 (excluding issue premium, as the case may be).
In addition to the outstanding shares of the Company:
| ● | a
total of 2,060,000 subscription rights of the Company have been created, of which 1,851,750 subscription rights have been granted as
of December 31, 2023, which entitles their holders (assuming all subscription rights are granted and exercised) to subscribe to a total
of 1,637,773 new shares with voting rights (see Note 24 for further details). The remaining 208,250 subscription rights have not yet
been granted and are currently still managed by the Company’s board of directors; |
| ● | under
the loan and security agreement entered into by the Company and Innovatus Capital Partners in August 2022, Innovatus has the right to
convert, prior to August 2, 2025, up to 15% of the outstanding principal amount of the loans (by means of a contribution in kind
of the relevant payables due by the Company under the loans) into shares of the Company at a conversion price per share equal to
$11.21 (see note 16 for further details). |
NOTE 23: Retirement benefit plans
The Company operates defined contribution plans
for all its qualifying employees. The assets of these plans are held separately from those of the Company in designated funds.
A total cost of $1.2 million in 2023 (2022: $724,000)
represents contributions payable to these plans by the Company at rates specified in the rules of the plans.
The employees of the Company in Belgium are members
of a state-managed retirement benefit plan operated by the government (i.e., legal pension) and are members of a bank-operated
private pension plan. The Company is required to contribute a specified percentage of payroll costs to the retirement benefit plan to
fund the benefits. The obligation of the Company with respect to the retirement benefit plan is to make the specified contributions.
Because the Company must guarantee the statutory
minimum return on these plans, not all actuarial and investment risks relating to these plans are transferred to the insurance company
or pension fund managing the plans. The Company has considered the potential impact of the employer’s obligation to guarantee a
minimum return and that this was assessed not to be significant.
NOTE 24: Share-based payments
Warrants are granted to employees, consultants
or directors of the Company and its subsidiaries. Each warrant entitles its holders to subscribe to one new share of the Company at a
subscription price determined by the board of directors, within the limits decided upon at the occasion of their issuance. The warrants
issued generally have a term of ten years as of issuance. Upon expiration of their term, the warrants become null and void.
On November 13, 2023, the company completed a
share consolidation with respect to all its outstanding shares by means of a 1-for-10 reverse stock split (the “Share Consolidation”).
Although the number of warrants does not change, the reverse stock split affects the number of shares into which the original number of
warrants are convertible. Therefore, all share amounts were adjusted to reflect the Share Consolidation.
This section provides an overview of the outstanding
warrants as of December 31, 2023. The warrants were created within the context of share-based incentive plans for employees, directors
and consultants of the Company.
The Company has created several pools of warrants
under stock option plans for grant to eligible employees, directors, and consultants. Stock option plans were announced on June 23, 2014
(150,000), June 19, 2017 (250,000), June 21, 2019 (300,000), May 27, 2021 (360,000), May 25, 2022 (500,000), and June 30, 2023 (500,000)
for a total amount of 2,060,000 warrants created.
| Outstanding warrants | |
2023 | | |
2022 | |
| Warrants created | |
| 2,060,000 | | |
| 1,731,080 | |
| Warrants available for grant | |
| (208,250 | ) | |
| (163,750 | ) |
| Warrants granted | |
| 1,851,750 | | |
| 1,567,330 | |
| Warrants terminated or lapsed | |
| (213,977 | ) | |
| (283,840 | ) |
| Warrants exercised | |
| - | | |
| (57,712 | ) |
| Total outstanding at December 31 | |
| 1,637,773 | | |
| 1,225,778 | |
As of December 31, 2023, there are 1,637,773 warrants
outstanding, entitling their holders to subscribe to 1,637,773 shares of the Company.
For the year 2023, 455,500 (2022: 393,050) warrants
were granted, 43,505 warrants (2022: 59,035) were terminated or lapsed, no warrants (2022: 0) were exercised, and 237,789 warrants (2022:
212,702) were vested.
| Number of potential shares from outstanding warrants | |
2023 | | |
2022 | |
| As of January 1 | |
| 1,225,778 | | |
| 891,763 | |
| Number of warrants cancelled/forfeited during the year | |
| (43,505 | ) | |
| (59,035 | ) |
| Number of warrants granted during the year | |
| 455,500 | | |
| 393,050 | |
| As of December 31 | |
| 1,637,773 | | |
| 1,225,778 | |
The share-based compensation expense recognized
in the consolidated statement of profit or loss is given below as is the cumulated amount per the consolidated statement of financial
position:
Thousands of $
Years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Share-based compensation in consolidated statement of profit or loss | |
| 665 | | |
| 867 | | |
| 1,222 | |
| Cumulated Share-based compensation in equity | |
| 12,139 | | |
| 11,474 | | |
| 10,607 | |
The Cumulated Share-based compensation amount
is part of the Total Shareholders’ Equity on the Consolidated statement of financial position. This amount is presented on the Consolidated
statement of financial position for both exercised and non-exercised warrants.
In general, the warrants vest in cumulative tranches
of 25% per year, provided that the beneficiary has provided at least one year of service. However, there are certain exceptions to this
rule which are, if applicable, specified in the relevant stock option plans:
| ● | The
warrants granted to directors under the June 23, 2014 Stock Option Plan, the June 21, 2019 Stock Option Plan, the May 27, 2021 Stock
Option Plan, the May 25, 2022, and the June 30, 2023 Stock Option Plan, all vest on the date of the annual meeting that takes place in
the calendar year following the calendar year in which they were granted, provided that the mandate of the relevant director has not
ended or been terminated. |
| ● | The
warrants granted to beneficiaries who are not directors under the June 23, 2014 Stock Option Plan all vest in instalments of 25% per
year, the first tranche of 25% vesting on the first anniversary date of the date of grant and the following tranches vesting on a quarterly
basis. |
| ● | The
warrants granted to beneficiaries who are not directors under the June 21, 2019 Stock Option Plan, the May 27, 2021 Stock Option Plan,
the May 25, 2022, and the June 30, 2023 Stock Option Plan may adopt a manual or custom vesting procedure under certain conditions or
a particular vesting period over 3 or 4 years. |
The table below presents the outstanding warrants
and their exercise price at the end of each accounting year covered by the financial statements:
| | |
Warrants | | |
Weighted
average
exercise
price (€) | | |
Potential
shares
from
exercise of
warrants | | |
Weighted
average
exercise
price per
potential
share (€) | |
| Granted in 2022 | |
| 393,050 | | |
| 6.76 | | |
| 393,050 | | |
| 6.76 | |
| Outstanding at December 31, 2022 | |
| 1,225,778 | | |
| 12.34 | | |
| 1,225,778 | | |
| 12.34 | |
| Granted in 2023 | |
| 455,500 | | |
| 2.91 | | |
| 455,500 | | |
| 2.91 | |
| Outstanding at December 31, 2023 | |
| 1,637,773 | | |
| 9.64 | | |
| 1,637,773 | | |
| 9.64 | |
| Exercisable at December 31, 2023 | |
| 759,841 | | |
| 14.07 | | |
| 759,841 | | |
| 14.07 | |
The following table provides an overview of the
outstanding potential shares from warrants per personnel category at December 31, 2023 and 2022:
| Category | |
2023 | | |
2022 | |
| Executive Director | |
| 489,375 | | |
| 395,000 | |
| Non-Executive Directors | |
| 25,650 | | |
| 24,800 | |
| Management team (excluding the Executive Director) | |
| 517,912 | | |
| 408,300 | |
| Other employees, consultants, and former service providers | |
| 604,836 | | |
| 397,678 | |
| Total outstanding at December 31 | |
| 1,637,773 | | |
| 1,225,778 | |
The weighted average exercise price of all outstanding
warrants (vested and non-vested warrants; assuming 1 warrant = 1 share) is €9.64 or $10.43 at December 31, 2023 (€12.34 or $13.25
at December 31, 2022; €15.28 or $17.27 at December 31, 2021). The weighted average remaining contractual life of all outstanding
warrants at the end of 2023 is 7.11 years (2022: 7.31 years; 2021: 7.18 years).
The fair value of each warrant is estimated on
the date of grant using the Black-Scholes methodology with the following assumptions:
| | |
Number of warrants granted | | |
| | |
Expected | | |
Expected | | |
Risk-free | | |
Expected duration (months) | |
| Dates | |
to Belgian benef. | | |
to other benef. | | |
Exercise price (€) | | |
dividend Yield | | |
stock price volatility | | |
interest rate | | |
to Belgian benef. | | |
to other benef. | |
| 23-Jun-14 | |
| 1,200 | | |
| 1,200 | | |
€ | 41.30 | | |
| - | | |
| 48.12 | % | |
| 1.78 | % | |
| 75.32 | | |
| 63.29 | |
| 10-Dec-14 | |
| - | | |
| 17,500 | | |
€ | 40.10 | | |
| - | | |
| 46.93 | % | |
| 1.01 | % | |
| 69.73 | | |
| 57.70 | |
| 09-Feb-15 | |
| 6,000 | | |
| 9,500 | | |
€ | 44.90 | | |
| - | | |
| 46.75 | % | |
| 0.62 | % | |
| 79.73 | | |
| 61.71 | |
| 01-Apr-15 | |
| - | | |
| 300 | | |
€ | 50.20 | | |
| - | | |
| 47.42 | % | |
| 0.40 | % | |
| 72.03 | | |
| 54.02 | |
| 01-May-15 | |
| - | | |
| 2,000 | | |
€ | 50.50 | | |
| - | | |
| 46.59 | % | |
| 0.62 | % | |
| 71.05 | | |
| 53.03 | |
| 29-May-15 | |
| 2,000 | | |
| 3,000 | | |
€ | 49.10 | | |
| - | | |
| 46.52 | % | |
| 0.81 | % | |
| 64.14 | | |
| 52.11 | |
| 01-Jun-15 | |
| - | | |
| 600 | | |
€ | 49.00 | | |
| - | | |
| 46.58 | % | |
| 0.81 | % | |
| 70.03 | | |
| 52.01 | |
| 01-Jul-15 | |
| - | | |
| 400 | | |
€ | 46.20 | | |
| - | | |
| 47.02 | % | |
| 1.27 | % | |
| 69.04 | | |
| 51.02 | |
| 01-Aug-15 | |
| - | | |
| 400 | | |
€ | 46.40 | | |
| - | | |
| 46.54 | % | |
| 0.98 | % | |
| 68.02 | | |
| 50.00 | |
| 01-Sep-15 | |
| - | | |
| 1,000 | | |
€ | 42.40 | | |
| - | | |
| 49.31 | % | |
| 1.15 | % | |
| 73.02 | | |
| 48.99 | |
| 01-Oct-15 | |
| - | | |
| 8,300 | | |
€ | 42.00 | | |
| - | | |
| 48.99 | % | |
| 0.90 | % | |
| 72.03 | | |
| 54.02 | |
| 01-Nov-15 | |
| - | | |
| 400 | | |
€ | 38.10 | | |
| - | | |
| 50.88 | % | |
| 0.92 | % | |
| 71.01 | | |
| 53.00 | |
| 01-Dec-15 | |
| - | | |
| 1,800 | | |
€ | 38.90 | | |
| - | | |
| 51.18 | % | |
| 0.85 | % | |
| 70.03 | | |
| 52.01 | |
| 01-Jan-16 | |
| - | | |
| 400 | | |
€ | 37.90 | | |
| - | | |
| 51.12 | % | |
| 1.06 | % | |
| 69.01 | | |
| 50.99 | |
| 04-Feb-16 | |
| - | | |
| 1,000 | | |
€ | 41.30 | | |
| - | | |
| 51.18 | % | |
| 0.85 | % | |
| 67.89 | | |
| 49.87 | |
| 04-Feb-16 | |
| 5,000 | | |
| 13,400 | | |
€ | 37.80 | | |
| - | | |
| 52.49 | % | |
| 0.72 | % | |
| 67.89 | | |
| 49.87 | |
| 22-Apr-16 | |
| - | | |
| 5,200 | | |
€ | 36.20 | | |
| - | | |
| 53.40 | % | |
| 0.58 | % | |
| 65.33 | | |
| 53.33 | |
| 27-May-16 | |
| 3,000 | | |
| 4,000 | | |
€ | 41.30 | | |
| - | | |
| 51.85 | % | |
| 0.54 | % | |
| 64.11 | | |
| 52.11 | |
| 01-Jun-16 | |
| - | | |
| 200 | | |
€ | 34.30 | | |
| - | | |
| 53.73 | % | |
| 0.49 | % | |
| 64.01 | | |
| 52.01 | |
| 01-Aug-16 | |
| - | | |
| 400 | | |
€ | 36.20 | | |
| - | | |
| 53.51 | % | |
| 0.16 | % | |
| 62.01 | | |
| 50.01 | |
| 21-Oct-16 | |
| - | | |
| 2,000 | | |
€ | 44.40 | | |
| - | | |
| 54.19 | % | |
| 0.28 | % | |
| 59.34 | | |
| 47.34 | |
| 22-Jan-16 | |
| - | | |
| 2,000 | | |
€ | 38.30 | | |
| - | | |
| 52.81 | % | |
| 0.86 | % | |
| 68.32 | | |
| 56.32 | |
| 01-Dec-16 | |
| - | | |
| 2,200 | | |
€ | 46.50 | | |
| - | | |
| 54.16 | % | |
| 0.75 | % | |
| 57.99 | | |
| 39.98 | |
| 01-Jan-17 | |
| - | | |
| 1,900 | | |
€ | 45.60 | | |
| - | | |
| 53.84 | % | |
| 0.73 | % | |
| 56.98 | | |
| 50.96 | |
| 01-Mar-17 | |
| - | | |
| 9,500 | | |
€ | 52.60 | | |
| - | | |
| 52.62 | % | |
| 0.68 | % | |
| 55.04 | | |
| 49.02 | |
| 01-Apr-17 | |
| - | | |
| 1,800 | | |
€ | 54.10 | | |
| - | | |
| 51.80 | % | |
| 0.81 | % | |
| 54.02 | | |
| 48.00 | |
| 11-Apr-17 | |
| 2,000 | | |
| 20,000 | | |
€ | 53.50 | | |
| - | | |
| 51.83 | % | |
| 0.72 | % | |
| 65.68 | | |
| 47.67 | |
| 1-Jun-17 | |
| - | | |
| 200 | | |
€ | 50.10 | | |
| - | | |
| 51.86 | % | |
| 0.59 | % | |
| 52.01 | | |
| 52.01 | |
| 1-Jul-17 | |
| - | | |
| 2,200 | | |
€ | 49.60 | | |
| - | | |
| 50.94 | % | |
| 0.77 | % | |
| 63.02 | | |
| 44.98 | |
| 29-Jul-17 | |
| - | | |
| 800 | | |
€ | 47.20 | | |
| - | | |
| 50.95 | % | |
| 0.87 | % | |
| 50.10 | | |
| 44.05 | |
| 01-Sep-17 | |
| - | | |
| 3,400 | | |
€ | 49.20 | | |
| - | | |
| 48.08 | % | |
| 0.71 | % | |
| 60.99 | | |
| 42.97 | |
| 01-Oct-17 | |
| - | | |
| 7,000 | | |
€ | 48.00 | | |
| - | | |
| 47.32 | % | |
| 0.76 | % | |
| 53.98 | | |
| 41.95 | |
| 02-Nov-17 | |
| - | | |
| 9,900 | | |
€ | 46.10 | | |
| - | | |
| 45.23 | % | |
| 0.66 | % | |
| 52.93 | | |
| 40.90 | |
| 1-Dec-17 | |
| - | | |
| 600 | | |
€ | 39.20 | | |
| - | | |
| 46.50 | % | |
| 0.56 | % | |
| 51.98 | | |
| 39.98 | |
| 20-Jun-17 | |
| 3,000 | | |
| 3,000 | | |
€ | 49.70 | | |
| - | | |
| 51.57 | % | |
| 0.59 | % | |
| 81.40 | | |
| 63.39 | |
| 27-Jun-17 | |
| 25,000 | | |
| | | |
€ | 49.80 | | |
| - | | |
| 51.04 | % | |
| 0.66 | % | |
| 81.17 | | |
| 63.16 | |
| 01-Apr-18 | |
| - | | |
| 4,200 | | |
€ | 37.70 | | |
| - | | |
| 46.08 | % | |
| 0.76 | % | |
| 54.02 | | |
| 42.02 | |
| 01-May-18 | |
| - | | |
| 800 | | |
€ | 36.40 | | |
| - | | |
| 46.27 | % | |
| 0.82 | % | |
| 53.03 | | |
| 41.03 | |
| 01-Jun-18 | |
| 5,000 | | |
| 3,200 | | |
€ | 49.70 | | |
| - | | |
| 46.15 | % | |
| 0.77 | % | |
| 52.01 | | |
| 40.01 | |
| 01-Aug-18 | |
| | | |
| 7,000 | | |
€ | 37.40 | | |
| - | | |
| 44.09 | % | |
| 0.79 | % | |
| 62.00 | | |
| 55.96 | |
| 05-Dec-18 | |
| - | | |
| 2,000 | | |
€ | 17.30 | | |
| - | | |
| 57.56 | % | |
| 0.79 | % | |
| 45.86 | | |
| 33.86 | |
| 24-Jan-19 | |
| - | | |
| 19,100 | | |
€ | 16.40 | | |
| - | | |
| 67.56 | % | |
| 0.77 | % | |
| 62.24 | | |
| 50.20 | |
| 16-May-19 | |
| - | | |
| 150,800 | | |
€ | 14.90 | | |
| - | | |
| 75.78 | % | |
| 0.38 | % | |
| 58.55 | | |
| 46.52 | |
| 01-Nov-19 | |
| - | | |
| 800 | | |
€ | 10.10 | | |
| - | | |
| 82.15 | % | |
| 0.00 | % | |
| 64.99 | | |
| 46.98 | |
| 01-Dec-19 | |
| - | | |
| 1,200 | | |
€ | 10.20 | | |
| - | | |
| 81.95 | % | |
| 0.00 | % | |
| 64.01 | | |
| 45.99 | |
| | |
Number of warrants granted | | |
| | |
Expected | | |
Expected | | |
Risk-free | | |
Expected duration (months) | |
| Dates | |
to Belgian benef. | | |
to other benef. | | |
Exercise price (€) | | |
dividend Yield | | |
stock price volatility | | |
interest rate | | |
to Belgian benef. | | |
to other benef. | |
| 01-Feb-20 | |
| - | | |
| 200 | | |
€ | 9.80 | | |
| - | | |
| 80.26 | % | |
| 0.00 | % | |
| 61.97 | | |
| 49.67 | |
| 01-Jun-20 | |
| - | | |
| 600 | | |
€ | 8.50 | | |
| - | | |
| 86.64 | % | |
| 0.00 | % | |
| 57.99 | | |
| 45.99 | |
| 01-Oct-20 | |
| - | | |
| 200 | | |
€ | 8.00 | | |
| - | | |
| 85.20 | % | |
| 0.00 | % | |
| 53.95 | | |
| 35.97 | |
| 15-Jul-20 | |
| - | | |
| 22,500 | | |
€ | 8.00 | | |
| - | | |
| 85.89 | % | |
| 0.00 | % | |
| 56.51 | | |
| 38.53 | |
| 01-Jul-19 | |
| 6,000 | | |
| 2,000 | | |
€ | 12.80 | | |
| - | | |
| 78.70 | % | |
| 0.07 | % | |
| 69.01 | | |
| 51.02 | |
| 24-Jul-19 | |
| - | | |
| 98,000 | | |
€ | 12.40 | | |
| - | | |
| 78.64 | % | |
| 0.00 | % | |
| 68.25 | | |
| 50.27 | |
| 15-Jul-20 | |
| - | | |
| 159,800 | | |
€ | 8.00 | | |
| - | | |
| 85.89 | % | |
| 0.00 | % | |
| 56.52 | | |
| 38.53 | |
| 30-Jul-20 | |
| 2,000 | | |
| - | | |
€ | 12.80 | | |
| - | | |
| 87.02 | % | |
| 0.00 | % | |
| 56.02 | | |
| 38.04 | |
| 01-Oct-20 | |
| - | | |
| 1,000 | | |
€ | 12.80 | | |
| - | | |
| 85.20 | % | |
| 0.00 | % | |
| 53.95 | | |
| 35.97 | |
| 01-Mar-21 | |
| - | | |
| 200 | | |
€ | 10.80 | | |
| - | | |
| 65.06 | % | |
| 0.00 | % | |
| 48.99 | | |
| 31.00 | |
| 03-May-21 | |
| - | | |
| 800 | | |
€ | 11.60 | | |
| - | | |
| 64.59 | % | |
| 0.01 | % | |
| 46.92 | | |
| 28.93 | |
| 01-Jun-21 | |
| - | | |
| 400 | | |
€ | 11.80 | | |
| - | | |
| 65.82 | % | |
| 0.01 | % | |
| 45.96 | | |
| 27.98 | |
| 27-Jul-21 | |
| - | | |
| 3,000 | | |
€ | 13.60 | | |
| - | | |
| 63.36 | % | |
| 0.00 | % | |
| 44.12 | | |
| 26.14 | |
| 27-Jul-21 | |
| - | | |
| 20,250 | | |
€ | 13.60 | | |
| - | | |
| 63.36 | % | |
| 0.00 | % | |
| 44.12 | | |
| 26.14 | |
| 24-Nov-21 | |
| - | | |
| 4,000 | | |
€ | 10.50 | | |
| - | | |
| 60.78 | % | |
| 0.14 | % | |
| 49.25 | | |
| 37.25 | |
| 03-Jul-21 | |
| - | | |
| 257,000 | | |
€ | 13.75 | | |
| - | | |
| 63.10 | % | |
| 0.04 | % | |
| 44.91 | | |
| 26.93 | |
| 07-Jul-21 | |
| - | | |
| 60,000 | | |
€ | 13.85 | | |
| - | | |
| 63.11 | % | |
| 0.00 | % | |
| 44.78 | | |
| 26.79 | |
| 06-May-22 | |
| - | | |
| 500 | | |
€ | 7.50 | | |
| - | | |
| 53.16 | % | |
| 1.64 | % | |
| 58.85 | | |
| 52.87 | |
| 04-Aug-22 | |
| - | | |
| 3,800 | | |
€ | 7.97 | | |
| - | | |
| 55.63 | % | |
| 1.41 | % | |
| 55.89 | | |
| 49.91 | |
| 03-Aug-22 | |
| - | | |
| 42,500 | | |
€ | 6.84 | | |
| - | | |
| 57.05 | % | |
| 1.50 | % | |
| 67.96 | | |
| 55.92 | |
| 03-Aug-22 | |
| - | | |
| 312,500 | | |
€ | 6.84 | | |
| - | | |
| 57.05 | % | |
| 1.50 | % | |
| 73.97 | | |
| 61.94 | |
| 04-Aug-22 | |
| - | | |
| 1,000 | | |
€ | 7.97 | | |
| - | | |
| 55.63 | % | |
| 1.41 | % | |
| 73.94 | | |
| 61.91 | |
| 01-Oct-22 | |
| - | | |
| 31,250 | | |
€ | 7.40 | | |
| - | | |
| 57.26 | % | |
| 2.77 | % | |
| 72.03 | | |
| 60.00 | |
| 01-Dec-22 | |
| - | | |
| 1,500 | | |
€ | 7.40 | | |
| - | | |
| 58.30 | % | |
| 2.40 | % | |
| 69.67 | | |
| 63.65 | |
| 25-Mar-23 | |
| - | | |
| 30,500 | | |
€ | 3.20 | | |
| - | | |
| 71.42 | % | |
| 2.75 | % | |
| 72.26 | | |
| 60.26 | |
| 3-May-23 | |
| - | | |
| 11,000 | | |
€ | 3.30 | | |
| - | | |
| 73.64 | % | |
| 2.92 | % | |
| 77.01 | | |
| 65.01 | |
| 27-Apr-23 | |
| - | | |
| 25,000 | | |
€ | 3.20 | | |
| - | | |
| 73.60 | % | |
| 3.10 | % | |
| 77.21 | | |
| 65.21 | |
| 22-Jun-23 | |
| - | | |
| 1,000 | | |
€ | 3.60 | | |
| - | | |
| 72.54 | % | |
| 3.11 | % | |
| 81.34 | | |
| 69.34 | |
| 30-Jun-23 | |
| - | | |
| 255,000 | | |
€ | 2.90 | | |
| - | | |
| 72.62 | % | |
| 3.09 | % | |
| 81.07 | | |
| 69.07 | |
| 04-Jul-23 | |
| - | | |
| 1,000 | | |
€ | 3.00 | | |
| - | | |
| 72.60 | % | |
| 3.14 | % | |
| 80.94 | | |
| 68.94 | |
| 05-Sep-23 | |
| - | | |
| 500 | | |
€ | 3.00 | | |
| - | | |
| 73.75 | % | |
| 3.23 | % | |
| 72.90 | | |
| 60.90 | |
| 18-Sep-23 | |
| - | | |
| 85,000 | | |
€ | 2.78 | | |
| - | | |
| 73.70 | % | |
| 3.34 | % | |
| 72.48 | | |
| 60.48 | |
| 18-Sep-23 | |
| - | | |
| 37,500 | | |
€ | 2.78 | | |
| - | | |
| 73.70 | % | |
| 3.34 | % | |
| 78.44 | | |
| 66.44 | |
| 09-Nov-23 | |
| - | | |
| 1,500 | | |
€ | 3.09 | | |
| - | | |
| 77.60 | % | |
| 3.32 | % | |
| 52.73 | | |
| 40.70 | |
| 09-Nov-23 | |
| - | | |
| 7,500 | | |
€ | 3.09 | | |
| - | | |
| 77.60 | % | |
| 3.32 | % | |
| 76.75 | | |
| 64.75 | |
The above inputs for the Black-Scholes model have been determined based
on the following:
| ● | The
dividend return is estimated by reference to the historical dividend payment of the Company. Currently, this is estimated to be zero
as no dividends have been paid since inception. |
| ● | The
expected volatility was determined using the average volatility of the stock over the last two years at the date of grant. |
| ● | On
November 27, 2023 the Company announced its transition to a single listing on Nasdaq which repositioned the Company’s shares from
the Euronext Brussels trading system to the Nasdaq trading system. Since there were no shares granted following this delisting date,
the risk-free interest rate is based on the interest rate applicable for the 10-year Belgian government bond at the grant date. |
NOTE 25: Related parties
Transactions between the Company and its employees,
consultants or Directors are described below. There were no other related party transactions.
Remuneration
of key management personnel
During the year ended December 31, 2023, the executive management team
included four members:
| 1. | Chief
Executive Officer, Mr. Michael K. McGarrity |
| 2. | Executive
Vice President of Corporate Development & General Counsel, Mr. Joseph Sollee |
| 3. | Chief
Financial Officer, Mr. Ron Kalfus |
| 4. | Chief
Commercial Officer, Mr. John Bellano |
Their combined remuneration package, including employer taxes, amounted
to the following:
Thousands of $ except per personnel, warrants & share amounts For The Years ended December 31 | |
2023 | | |
2022 | | |
2021 | |
| Number of management members and Executive Directors | |
| 4 | | |
| 4 | | |
| 4 | |
| Short-term employee benefits | |
| 1,967 | | |
| 1,550 | | |
| 1,545 | |
| Post-employment benefits | |
| 48 | | |
| 54 | | |
| 52 | |
| Other employment costs | |
| 216 | | |
| 219 | | |
| 207 | |
| Total benefits | |
| 2,231 | | |
| 1,822 | | |
| 1,804 | |
| IFRS share-based compensation expense | |
| 909 | | |
| 863 | | |
| 982 | |
| Number of warrants offered | |
| 220,000 | | |
| 220,000 | | |
| 220,000 | |
| Cumulative outstanding warrants | |
| 1,007,287 | | |
| 808,800 | | |
| 588,800 | |
| Exercisable warrants | |
| 644,283 | | |
| 361,864 | | |
| 128,223 | |
The following table sets forth the number of warrants
that were exercised, granted and accepted in aggregate by the four members of the executive management team:
| | |
2023 | | |
2022 | | |
2021 | |
| Number of warrants exercised | |
| 0 | | |
| 0 | | |
| 0 | |
| Number of new warrants granted and accepted | |
| 220,000 | | |
| 220,000 | | |
| 220,000 | |
| Annualized IFRS cost for existing warrants | |
$ | 909,000 | | |
$ | 863,000 | | |
$ | 982,000 | |
No loans, quasi-loans or other guarantees are
outstanding with members of the executive management team.
Remuneration
of the Board
The total remuneration of the Board of Directors
(including the Executive Director) in 2023, 2022, and 2021 was $1,090,000, $876,000, and $863,000, respectively (excluding VAT, share-based
compensation and reimbursement of expenses). No advances or credits have been granted to any member of the Board of Directors. None of
the members of the Board of Directors have received any non-monetary remuneration other than warrants as disclosed above.
Transactions with Non-Executive
Directors
Since 2012, the Non-Independent Directors do not
receive a fee payment for attending and preparing for Board meetings or for assisting the Company with Board matters. They receive reimbursement
for expenses directly related to the Board meetings, totaling less than $29,000 in 2023.
The Independent Directors receive a fee for attending
and preparing meetings of the Board of Directors and for assisting the Company with Board matters, and they receive reimbursement for
expenses directly related to the Board meetings. In 2023, 2022, and 2021, fees and expense reimbursement in the amount of $337,000, $314,000,
and $302,000, respectively, were paid to independent members of the Board of Directors.
Warrants to subscribe to 1,000 new shares were
granted to Jan Pensaert, acting through Valiance Advisors LLP, in July, 2023. No other warrants were granted to Non-Executive Directors
in 2023. No warrants were exercised in 2023 by Non-Executive Directors.
NOTE 26: Significant agreements, commitments
and contingencies
Fair
value of Other financial liabilities
Other financial liabilities include the contingent
consideration related to the acquisition of NovioGendix in 2015. The Company is contractually required to pay at maturity to the holder
of the obligation the amount of maximum $2.2 million. Based on its judgement and estimates, management believes future milestones will
be paid in 2024 or 2025. The fair value of this contingent consideration as of December 31, 2023, is estimated at $1.2 million (2022:
$1.2 million) and was accounted for as other financial liabilities (current and non-current) as detailed in Note 16.
The contingent consideration related to the acquisition
of the GPS business from Exact Sciences in August 2022 (as detailed in Note 3), has been assessed at $50.5 million which has been accounted
for under other non-current liabilities as further detailed in Note 3. The liability recognized reflects a probability-weighted estimate
at the current net present value which is expected to become payable. Future fair value adjustments to this contingent consideration will
be recognized in the statement of profit or loss. The value of the contingent liability for GPS is $62.6 million as of December 31, 2023
(2022: $52.9 million) and was accounted for as other non-current financial liabilities as detailed in Note 16.
Collaborative
research agreements and clinical research agreements
The Company has entered into multiple agreements
with universities, medical centers and external researchers for research and development work and for the validation of the Company’s
technology and products. These agreements typically have durations of one to three years, and may include fixed fees to the collaborators
in exchange for access and rights to the results of the work. In addition, MDxHealth collaborates on research and clinical development
with leading academic and government cancer research institutes. These relationships provide the Company with additional resources and
expertise for clinical marker validation as well as access to patient samples for testing.
Intellectual
property in-licensing agreements
The Company has entered into numerous agreements
with universities and companies for in-licensing intellectual property. These agreements typically require the Company to pay an up-front
fee, annual maintenance fees and/or minimum annual royalty fees, legal fees related to the patents, and certain milestone and royalty
fees if the patents are eventually used in a commercialized product. In addition, the Company must provide the licensor with periodic
reports.
Commercial
and intellectual property sub-licensing agreements
The Company has entered into multiple partnering
and sub-licensing agreements. With regards to the Company’s developed tests, the Company has entered into a range of marketing and
sales arrangements with commercial entities. These important relationships provide the Company with additional resources and infrastructure
to expand the geographic reach and awareness of the Company’s solutions, primarily in relation to the Confirm mdx and Select mdx
tests.
In regard to intellectual property that MDxHealth
has developed or improved, MDxHealth has sublicensed certain of its non-core technologies to commercial partners, several of whom have
launched products that generate royalties and other fees. These sublicenses include an exclusive sublicense to Laboratory Corporation
of America (LabCorp) for the MGMT test, which LabCorp began to commercialize in North America in 2008, and an exclusive sublicense to
Vesica Health, Inc. for the Company’s patented AssureMDx test for the purpose of bladder cancer detection on a worldwide basis.
Litigation
As of the date of this document and as far as
MDxHealth is aware, the Company is not involved in any material legal proceedings.
NOTE 27: Subsidiaries
The Company has the following two wholly-owned direct subsidiaries:
| MDxHealth Inc. |
|
|
| Address |
|
15279 Alton Parkway – Suite 100 – Irvine, CA 92618 |
| Incorporation Date |
|
April 14, 2003 |
| |
|
|
| MDxHealth B.V. |
|
|
| Address |
|
Transistorweg 5, 6534 AT Nijmegen, The Netherlands |
| Incorporation Date |
|
October 18, 2006 |
| Incorporated into MDxHealth on |
|
September 18, 2015 |
NOTE 28: Principal audit fees and services
During the past fiscal year, in addition to their
usual activity, the statutory auditor performed additional activities on behalf of the Company mainly for the issuance of special reports
related to warrant plans, grant report certification, for participation to the audit committees and for participation to special projects.
The detail is presented in the table below:
| | |
in thousands of $ | | |
in thousands of € | |
| For the years ended December 31 | |
2023 | | |
2022 | | |
2021 | | |
2023 | | |
2022 | | |
2021 | |
| Audit fee for statutory and consolidated financials | |
| 408 | | |
| 239 | | |
| 182 | | |
| 378 | | |
| 226 | | |
| 155 | |
| Other audit fees | |
| - | | |
| 191 | | |
| 183 | | |
| - | | |
| 180 | | |
| 156 | |
| Audit related and other services | |
| 40 | | |
| 42 | | |
| 17 | | |
| 37 | | |
| 39 | | |
| 14 | |
| Total | |
| 448 | | |
| 472 | | |
| 382 | | |
| 415 | | |
| 445 | | |
| 325 | |
NOTE 29: Subsequent events
OrbiMed Credit Agreement
On May 1, 2024, the Company entered into a credit
agreement, by and between the Company, as guarantor, MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and one or
more affiliates of OrbiMed as lenders and administrative agent.
The credit agreement provides for a five-year
senior secured credit facility in an aggregate principal amount of up to $100 million, of which (i) $55 million was advanced on the date
of closing, (ii) $25 million will be made available, at MDxHealth, Inc.’s discretion, on or prior to March 31, 2025, subject to
certain net revenue requirements and other customary conditions, and, and (iii) $20 million will be made available, at MDxHealth, Inc.’s
discretion, on or prior to March 31, 2026, subject to certain net revenue requirements and other customary conditions.
All obligations under the OrbiMed credit agreement
are guaranteed by the Company and all of the Company’s subsidiaries (other than MDxHealth, Inc. and subject to certain exceptions)
and secured by substantially all of MDxHealth, Inc.’s and each guarantor’s assets. If, for any quarter until the maturity
date of the loan facility, the Company’s net revenue does not meet certain minimum amounts, then, subject to certain cure rights
specified in the OrbiMed credit agreement, MDxHealth, Inc. shall be required to repay the outstanding principal amount of the loan facility
in equal monthly instalments, together with accrued interest on the principal repaid and a repayment premium and other fees, until the
maturity date of the loan facility. MDxHealth, Inc. shall repay amounts outstanding under the loan facility in full immediately upon an
acceleration as a result of an event of default as set forth in the credit agreement, together with a repayment premium and other fees.
During the term of the loan facility, interest
payable in cash by MDxHealth, Inc. shall accrue on any outstanding amounts under the loan facility at a rate per annum equal to the greater
of (x) the SOFR rate for such period and (y) 2.50% plus, in either case, 8.50%. During an event of default, any outstanding amount under
the loan facility will bear interest at a rate of 4.00% in excess of the otherwise applicable rate of interest. MDxHealth, Inc. will pay
certain fees with respect to the loan facility, including an upfront fee, an unused fee on the undrawn portion of the loan facility, an
administration fee, a repayment premium and an exit fee, as well as certain other fees and expenses of OrbiMed.
The Company also agreed to issue warrants to affiliates
of OrbiMed to subscribe for up to 1,243,060 new ordinary shares, with no par value, at an exercise price of $2.41 per ordinary share.
The issuance of the warrants is subject to an approval by an extraordinary general shareholders’ meeting of the Company, to be convened
by the Company. The warrants will have a term of five years from their issuance date. The warrants’ terms and conditions will contain
customary share adjustment provisions, as well as weighted average price protection in certain circumstances.
As part of the OrbiMed credit facility, the Company
repaid in full its existing $35 million debt facility with Innovatus.
ATM Facility
On April 30, 2024, the Company entered into a
sales agreement with TD Securities (USA) LLC (“TD Cowen”) with respect to an equity offering program under which the Company
may offer and sell Company’s ordinary shares, no par value, having an aggregate offering price of up to USD 50.0 million from time
to time, through TD Cowen as its sales agent.
Sales of Company’s ordinary shares, if any,
in the offering may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under
the Securities Act of 1933, as amended, or the Securities Act, from time to time. TD Cowen is not required to sell any specific number
or dollar amount of securities but, will act as sales agent and use commercially reasonable efforts to arrange on the Company’s
behalf for the sale of all ordinary shares requested to be sold by the Company, consistent with TD Cowen’s normal sales practices.
There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The Company will pay TD Cowen a commission equal
to three percent (3.0%) of the gross sales price per ordinary shares sold through TD Cowen under the sales agreement and also has agreed
to provide indemnification and contribution to TD Cowen with respect to certain liabilities, including liabilities under the Securities
Act and the Securities Exchange Act of 1934, as amended.
The Company is not obligated to make any sales
of ordinary shares pursuant to the sales agreement. The facility will terminate upon the earlier of (i) the sale of all ordinary shares
subject to the sales agreement and (ii) the termination of the sales agreement as permitted therein. Each of the Company and TD Cowen
may terminate the sales agreement at any time upon four days’ prior notice.
F-48
Exhibit 99.6
1. Report of the board of directors
This report of the board of directors has been
prepared in accordance with the Articles 3:5, 3:6, §1 and 3:32, §1 of the Belgian Companies and Associations Code of 23 March
2019 (as amended) (the “Belgian Companies and Associations Code” or “BCAC”) and relates to the position
of MDxHealth SA, a company domiciled and incorporated in Belgium (the “Company”, and together with its subsidiaries,
“MDxhealth”), and the Company’s statutory and consolidated annual accounts for the financial year ended on December 31,
2023.
1.1 Developments,
results, risks and uncertainties
1.1.1 Management’s
discussion and analysis of the statutory financial statements of 2023 and 2022
The statutory annual accounts presented in this
section of the board of directors’ report have been prepared by the board of directors, which, on May 6, 2024 authorised them to
be published. The annual accounts were signed on behalf of the Company by Koen Hoffman, the Chairman of the board of directors. The annual
accounts will be submitted to the shareholders for final approval during the ordinary general shareholders’ meeting to be held on May
30, 2024.
Revenue
Sales and services for the financial year ending
December 31, 2023 amounted to EUR 3,233,610 compared to EUR 2,983,328 for the financial year ending December 31, 2022. Turnover for the
financial year 2023 primarily includes licensing revenue obtained from US subsidiaries, which was up from the previous year due to increased
royalties resulting from the acquisition of GPS in August 2022.
Cost
of sales and services
The cost of goods includes royalties that the
Company must pay to third parties, and the costs incurred by analyses conducted on behalf of customers.
Miscellaneous services and goods decreased from
EUR 11,041,112 in 2022 to EUR 8,614,370 in 2023, meaning a decrease of EUR 2,426,742. This is explained by a decrease in insurance, consultancy
& legal fees, which is partially offset by an increase in the costs incurred by listing on the NASDAQ Capital Market.
The operating result went from a loss of EUR 9,257,616
in 2022 to a loss of EUR 7,493,015 in 2023, following the decrease in insurance, consultancy & legal fees, which is partially offset
by an increase in the costs incurred by listing on the NASDAQ Capital Market & the full year depreciation of GPS.
Financial
results
The financial results are composed of income from
financial assets on one hand, namely income from interests on inter-Company receivables, which amounted to EUR,3,266,127 in 2022 and rose
to EUR 4,891,406 in 2023, but also positive exchange differences of EUR 256,503 and, on the other hand, debt charges, other financial
expenses, and non-recurring financial expenses, which amounted to EUR 2,596,958 in 2022 and rose to EUR 6,269,866 in 2023. In 2023, the
net financial result corresponds to a loss of EUR 658,634 compared to a profit of EUR 3,500,521 in 2022.
Net
loss
The Company ended the 2023 financial year with
a net loss of EUR 28,370,081 compared to a net loss of EUR 47,822,442 the previous year.
Liquidity,
working capital and sources of financing
Cash and cash equivalents amounted to EUR 18,851,952
as of December 31, 2023, compared to EUR 11,835,882 on December 31, 2022. The net income from new sources of financing was offset by an
operational use of cash for the primary purpose of financing the cash requirements of the American and Dutch subsidiaries.
Notes
on the approval of the statutory financial statements
The statutory annual accounts have been prepared
in accordance with generally accepted accounting principles in Belgium, and present a true and fair view of the various activities conducted
by the Company during the past financial year. Mr. Mike McGarrity, the CEO and managing director, declares, on behalf of the board
of directors that, to the best of the board’s knowledge, the statutory annual accounts, prepared in accordance with generally accepted
accounting principles in Belgium, present a true and fair view of the assets and liabilities of the Company, as well as the financial
situation and operating results of the Company.
Based on the annual accounts, the following can
be noted:
| ● | Results for the financial year |
The Company closed its annual accounts with a
net loss of EUR 28,370,081. This net loss is primarily the result of operating activities during the past year.
| ● | Capital, legal reserves, unavailable reserves
and loss carried forward |
The Company’s subscribed capital amounts
to EUR 164,302,752.89. Share premiums amount to EUR 126,480,632.
The Company has no legal reserves.
A cumulative loss recorded at the closing of the
annual accounts amounts to EUR 203,495,750. The Company is not required to set aside additional sums.
We propose carrying forward the profit for the
financial year as follows:
| |
Ø |
Loss for the financial year to be allocated |
EUR 28,370,081 |
| |
|
|
|
| |
Ø |
Loss carried forward from previous financial years |
EUR 175,125,669 |
| |
|
|
|
| |
Ø |
Loss to be carried forward |
EUR 203,495,750 |
Since the Company has recorded a loss carried
forward, the continuity rules must be justified. The Company has experienced net losses and significant cash outflows from operating activities
since it was founded in 2003 and, as of December 31, 2023, had an accumulated deficit of EUR 203,495,750, or a net loss of EUR 28,370,081.
As of December 31, 2022, the accumulated deficit amounted to EUR 175,125,669, with the net loss amounting to EUR 47,822,442. Management
expects the Company to continue suffering net losses and having significant cash outflows for at least the next twelve months. Although
these conditions, and others, may cast significant doubt over the ability of the Company to continue its activities, the financial statements
have been drafted on the assumption that the Company will continue operations. This accounting method provides for the recovery of its
assets and the settlement of its debts during the normal course of its activities. A successful transition to profitable operation depends
on the Company achieving a level of positive cash flow that is sufficient to support the cost structure. As of December 31, 2023, the
Company’s cash and cash equivalents amounted to EUR 18,851,952. On May 1, 2024, the Company’s U.S. subsidiary closed a $100
million loan and security agreement with funds managed by OrbiMed Advisors LLC. The Group drew down $55 million from this loan, replacing
the existing $35 million debt facility with Innovatus. Taking into account the above financial situation and on the basis of the most
recent business plan including the Company’s expected ability to access additional cash through debt, equity, or other means, the
Company believes that it has sufficient cash to be able to continue its operations for at least the next twelve months from the date of
issuance of these financial statements, and accordingly has prepared the consolidated financial statements assuming that it will continue
as a going concern. This assessment is based on forecasts and projections within management’s most recent business plan as well
as the Company’s expected ability to meet the conditions and covenants in the OrbiMed credit facility and to be able to access additional
cash through debt, equity or other means, for which at this moment a material uncertainty exists that casts substantial doubt on the Company’s
ability to continue as a going concern. The Company also believes the going concern assumption is justified based on its ability to realize
cost savings in case it will not be successful in raising additional cash through debt, equity or other means.
1.1.2 Management’s
discussion and analysis of the consolidated financial statements of 2023 and 2022
The
following consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB) and as adopted by the EU (“EU-IFRS”) and collectively “IFRS”.
The accounting policies and notes are an integral part of these consolidated financial statements. The following consolidated accounts
differ from the non-consolidated statutory annual accounts of MDxHealth, which have been prepared in accordance with Belgian GAAP.
The
financial statements in this section of the board report have been approved and authorized for issue by the board of directors on May
6, 2024. The financial statements have been signed on behalf of the Company by Koen Hoffman, Chair of the Board of Directors. The financial
statements will be submitted to the shareholders for their final approval at the ordinary general shareholders’ meeting to be held on
May 30, 2024.
Revenues
Total revenue for 2023 was $70.2 million, an increase
of 89% as compared to total revenue of $37.1 million for 2022. 2023 revenues were comprised of $30.9 million from GPS, 24.8 million from
Confirm mdx, $9.7 million from Resolve mdx, with the remaining revenues from Select mdx and other.
Reimbursement for diagnostic tests furnished to
Medicare beneficiaries (typically patients aged 65 or older) is usually based on a fee schedule set by the U.S. Centers for Medicare &
Medicaid Services (“CMS”), a division of the U.S. Department of Health and Human Services (“HHS”). As a Medicare-enrolled
service provider, the Company bills the regional Medicare Administrative Contractor (“MAC”) for CMS that covers the region
where the testing service is performed by the Company. The Confirm mdx test obtained a positive Medicare local coverage determination
(“LCD”) in 2014, the GPS test obtained a positive Medicare coverage LCD in 2015, and the Select mdx test obtained a positive
Medicare coverage LCD in 2023, each of which provides coverage for Medicare patients throughout the United States.
In 2023, Medicare represented the only payer generating
over 10% of the Company’s revenues, for a total of $27.7 million (2022: $15.8 million; 2021: $8.5 million).
At the end of 2023, the Company had concluded
agreements with 140 commercial payors for Confirm mdx (2022: 129; 2021: 119), 84 commercial payors for Select mdx (2022: 62; 2021: 54)
and 62 commercial payors for GPS (2022:29; 2021: 0).
In 2023, the Company earned 99.7% (2022: 99.8%)
of its revenue from external customers from its clinical laboratory testing services and out-licensing of intellectual property. In 2023,
the clinical laboratory testing in the U.S. CLIA laboratory represented 99% of the Company’s revenue (2022: 99%), while the out-licensing
of intellectual property revenue in Europe represented less than 1% (2022: less than 1% too).
Cost of sales (exclusive of amortization
of intangible assets)
The costs of sales include the costs associated
with providing testing services to third parties and include the cost of materials, labor (including salaries, bonuses, and benefits),
transportation, collection kits, and allocated overhead costs associated with processing samples. Allocated overhead costs include depreciation
of laboratory equipment, facility occupancy and information technology costs. Costs associated with processing samples are expensed when
incurred, regardless of the timing of revenue recognition. Amortization of intangible assets are excludes from cost of sales and are presented
separately in the statement of profit or loss.
Cost of sales for 2023 amounted to $26.3 million,
compared to $17.8 million in 2022.
Research
and development expenses
Thousands of $
For the years ended December 31 |
|
2023 |
|
|
2022 |
|
| Personnel costs |
|
|
3,693 |
|
|
|
2,453 |
|
| Depreciation |
|
|
428 |
|
|
|
212 |
|
| Impairment |
|
|
- |
|
|
|
44 |
|
| Lab consumables |
|
|
639 |
|
|
|
713 |
|
| Patent expenses |
|
|
83 |
|
|
|
430 |
|
| External collaborator fees |
|
|
199 |
|
|
|
783 |
|
| Clinical validation |
|
|
765 |
|
|
|
584 |
|
| Other expenses |
|
|
569 |
|
|
|
278 |
|
| Total research and development expenses |
|
|
6,376 |
|
|
|
5,497 |
|
Research and development expenses consist of costs
incurred for the development and improvement of our products. These expenses consist primarily of labor costs (including salaries, bonuses,
benefits, and share-based compensation), reagents and supplies, clinical studies, outside services, patent expenses, depreciation of laboratory
equipment, facility occupancy and information technology costs. Research and development expenses also include costs associated with assay
improvements and automation workflow for our current suite of products.
Total research and development expenses increased
by $0.9 million, or 16%, primarily due to annual compensation increases, as well as an increase in ongoing clinical studies, partially
offset by savings in patent expenses, lab consumables, and external collaborator fees.
Selling and Marketing expenses
Thousands of $
For
the years ended December 31 |
|
2023 |
|
|
2022 |
|
| Personnel costs |
|
|
27,952 |
|
|
|
19,070 |
|
| Depreciation |
|
|
888 |
|
|
|
750 |
|
| Professional fees |
|
|
710 |
|
|
|
1,259 |
|
| Marketing expenses |
|
|
5,075 |
|
|
|
2,843 |
|
| Travel expenses |
|
|
1,061 |
|
|
|
789 |
|
| Offices & facilities expenses |
|
|
459 |
|
|
|
356 |
|
| Other expenses |
|
|
770 |
|
|
|
637 |
|
| Total selling and marketing expenses |
|
|
36,915 |
|
|
|
25,704 |
|
MDxHealth’s sales and marketing expenses are expensed as incurred and include costs associated with its sales organization, including
its direct clinical sales force and sales management, medical affairs, client services, marketing and managed care, as well as technical
lab support and administration. These expenses consist primarily of labor costs (including salaries, bonuses, benefits, and share-based
compensation), customer education and promotional expenses, market analysis expenses, conference fees, travel expenses and allocated overhead
costs.
Selling and marketing expenses increased by $11.2
million, or 44%, compared to 2022, primarily due to an increase in personnel costs related to the Company’s acquisition of the GPS
business in August 2022, as well as increased direct marketing expenses, travel expenses, facilities expenses, and depreciation offset
by a decrease in outside professional fees.
General
and administrative expenses
Thousands of $
For the years ended December 31 |
|
2023 |
|
|
2022 |
|
| Personnel costs |
|
|
10,184 |
|
|
|
8,995 |
|
| Depreciation |
|
|
737 |
|
|
|
734 |
|
| Professional fees |
|
|
6,706 |
|
|
|
7,762 |
|
| Public company expenses |
|
|
2,701 |
|
|
|
4,025 |
|
| Travel expenses |
|
|
130 |
|
|
|
79 |
|
| Offices & facilities expenses |
|
|
1,266 |
|
|
|
1,142 |
|
| Royalties to third parties |
|
|
28 |
|
|
|
47 |
|
| Board fees |
|
|
366 |
|
|
|
394 |
|
| Other expenses |
|
|
892 |
|
|
|
130 |
|
| Total general and administrative expenses |
|
|
23,010 |
|
|
|
23,308 |
|
General and administrative expenses include costs
for certain executives, accounting and finance, legal, revenue cycle management, information technology, human resources, and administrative
functions. These expenses consist primarily of labor costs (including salaries, bonuses, benefits, and share-based compensation), professional
service fees such as consulting, accounting, legal, general corporate costs, and public-company costs associated with the Company’s
listing, as well as allocated overhead costs (rent, utilities, insurance, etc.).
General and administrative expenses decreased
in 2023 by $0.3 million or 1%. Despite an increase in personnel costs of $1.2 million, there were decreases in public company expenses
as well as a decrease in professional fees from the 2022 acquisition of GPS. Professional fees for 2023 included one-time expenses related
to the transition from the Company’s past dual listing on Euronext Brussels and NASDAQ to a sole listing on NASDAQ as well as the amendment
to the asset purchase agreement with Exact Sciences.
Amortization of intangible assets
Thousands of $
For the years ended December 31 | |
2023 | | |
2022 | |
| Research and development | |
| 3,157 | | |
| 2,060 | |
| Selling and marketing | |
| 1,315 | | |
| 878 | |
| General and administrative | |
| 22 | | |
| 231 | |
| Total amortization of intangible assets | |
| 4,494 | | |
| 3,169 | |
Amortization of intangible assets primarily relates
to the acquired intellectual property, brand, and customer relationships of the GPS business combination. In 2023, the Company segregated
“amortization of intangible assets” from other operating categories in the statement of profit or loss and is presenting amortization
of intangible assets as a separate category. Prior periods balances have been reclassified to conform to current period presentation.
Intangible assets increased by $1.3 million from 2022 to 2023 due to the fact that 2022 was a partial year of amortization expense for
the GPS intangible assets.
Financial
results
Innovatus debt facility
On August 2, 2022, the Company entered into a
$70 million loan and security agreement with Innovatus Life Sciences Lending Fund I, LP (“Innovatus”), which loan also replaced
the Company’s €9 million debt facility with Kreos Capital. At closing, an amount of $35 million was drawn, with an additional
$35 million remaining available as a $20 million term B loan and a $15 million term C loan that could be drawn in 2024 and 2025 respectively,
subject to certain conditions whereby there could be no assurance that these conditions would be satisfied and that the Company would
be able to draw any further term loan amounts under this facility. The loans were secured by assets of the Company including intellectual
property rights. Remaining proceeds of the loans were to be used for working capital purposes and to fund general business requirements.
The loans accrued interest at a floating per annum
rate equal to the sum of (a) the greater of (i) the prime rate published in The Wall Street Journal in the “Money Rates” section
or (ii) 4.00%, plus (b) 4.25%, and required interest-only payments for the initial four years. As contractually agreed, and at the election
of the Company, a portion of the interest would become payable in-kind by adding an amount equal to 2.25% of the outstanding principal
amount to the then outstanding principal balance on a monthly basis until August 2, 2025. The loans were to mature on August 2, 2027.
The lenders had the right to convert, prior to August 2, 2025, up to 15% of the outstanding principal amount of the loans into shares
of the Company at a price per share equal to $11.21, reflecting a substantial premium to the trading price prior to the announcement of
the acquisition. Amounts converted into shares of the Company would be reduced from the principal amount outstanding under the loan. Notable
fees payable to Innovatus consisted of a facility fee equal to 1% of the total loan commitment, due on the funding date of the relevant
loans, and an end-of-loan fee equal to 5% of the amount drawn, payable upon final repayment of the relevant loans.
Security had been granted over all assets (including
IP rights) owned by the Company and MDxHealth, Inc. The loan agreement contained customary financial covenants and general affirmative
and negative covenants, including limitations on the Company’s ability to transfer or dispose of assets, change our business, merge
with or acquire other companies, incur additional indebtedness and liens, make investments, pay dividends and conduct transactions with
affiliates.
The Innovatus debt facility has been accounted
for as a hybrid financial instrument which includes a host financial liability as well as an embedded derivative financial instrument
being an equity conversion call option at a fixed rate of up to 15% of the aggregate outstanding principal amount through August 2, 2025.
The embedded derivative is not considered to be
closely related to the host financial liability given the differences in economics and risks, and as such both are accounted for separately:
| ● | The host financial liability is recognized at
amortized cost applying the effective interest rate method and has been accounted for as non-current loans and borrowings; |
| ● | The embedded derivative convertible (American)
call option is recognized at fair value using a binomial tree option pricing model whereby the fair value is based on the actual stock
price and the estimated volatility of the Company’s shares on NASDAQ since the Company’s IPO on November 4, 2021, and through
the valuation date. The volatility measured on August 2, 2022, which was the closing date of the Innovatus debt facility, was 62.85% and
at December 31, 2023 was 72.92% (2022: 64.82%). Any changes to the fair value of the embedded derivative will be recognized through the
statement of profit or loss. The derivative financial instrument has been accounted for as other current financial liabilities. |
On May 1, 2024, the Innovatus facility was repaid
in full in the context of its refinancing via the OrbiMed credit agreement entered into by the Company on the same day (see also section
1.2 of this report for further information on the OrbiMed credit agreement). In this context, all securities granted in favour of Innovatus
have been released.
For the year ended December 31, 2023, financial
expenses, were primarily comprised of a negative fair value adjustment for the GPS contingent consideration of $9.1 million resulting
from changes in net present value, interest charges of $5.2 million related to the Innovatus debt facility, and $2.2 million related to
the 5-year warrant issued to Exact Sciences as part of the amended GPS asset purchase agreement.
Net
loss
Operating expenses increased by 25% to $71.3 million
compared to $57.1 million for the prior year, primarily driven by the acquisition of the GPS test in August 2022, and includes $2.6 million
of non-recurring expenses, primarily attributed to the transition from the Company’s past dual listing on Euronext Brussels and NASDAQ
to a sole listing on NASDAQ. Net loss decreased by 2% to $43.1 million compared to $44.0 million for the prior year, driven by the factors
mentioned above, partially offset by an increase of $11.9 million in financial expenses, of which $9.1 million was non-cash and primarily
related to the GPS contingent consideration.
Liquidity,
working capital and capital resources
Net cash used in operations was $21.5 million
for year ended December 31, 2023, compared to $34.1 million for the year ended December 31, 2022. The decrease of cash used in operations
of $12.6 million was primarily due to a lower operating loss of $10.6 million as well as a higher adjustment for non-cash related
items such depreciation and amortization.
Net cash used in investing activities for the
year ended December 31, 2023, was $3.9 million compared to $29.0 million for the year ended December 31, 2022. The decrease in net
cash from investing activities primarily related to the acquisition of the GPS business which occurred during 2022.
Net cash from financing activities for year ended
December 31, 2023, was $32.3 million compared to $20.7 million for the year ended December 31, 2022. Cash from financing activities
for the year ended December 31, 2023, were primarily derived from net proceeds of $39.6 million from our registered public offering in
March 2023. Cash from financing activities for the year ended December 31, 2022 were primarily derived from the $35.0 million debt facility
from Innovatus, partially offset by the repayment of $10.8 million to Kreos Capital.
Balance sheet
The key ratios from balance sheet at December 31,
2023 in comparison with 2022 are presented in the following table:
| For the years ended December 31 | |
2023 | | |
2022 | |
| Cash & cash equivalents as a % of total assets | |
| 17 | % | |
| 13 | % |
| Working capital as a % of total assets | |
| 14 | % | |
| 9 | % |
| Solvency ratio (equity/total assets) | |
| 6 | % | |
| 8 | % |
| Gearing ratio (Financial debt/equity) | |
| 502 | % | |
| 381 | % |
Cash and cash equivalents of $22.4 million account for 17% of total assets at December 31, 2023. The other major assets are goodwill,
intangible and tangible assets ($85.2 million or 66% of total assets), and receivables over the period 2023 ($11.1 million or 9% of total
assets).
Total equity of $7.2 million accounts for 6% of
the total balance sheet at December 31, 2023. The other major liabilities are loans and borrowings ($36.2 million or 28% of total assets),
lease liabilities ($5.1 million or 4% of total assets), trade payables ($8.8 million or 7% of total assets) and other liabilities (short
term and long term for $71.8 million or 56% of total assets).
Taxation
The losses of MDxHealth in the last three years
imply that no income taxes are payable for these years. December 31, 2023., the Company had net tax losses carried forward amounting to
$308.7 million. Due to the uncertainty surrounding the Company’s ability to realize taxable profits in the near future, the Company
did not recognize any deferred tax assets on its balance sheet.
1.1.3 Information
regarding major risks and uncertainties
MDxHealth is subject to the following risks:
Risks related to the Company’s business
and industry
Financial risks
| ● | MDxHealth has a history of losses and expects
to incur net losses in the future and may never achieve profitability. |
| ● | MDxHealth may require substantial additional
funding to continue its operations and to respond to business needs or take advantage of new business opportunities, which may not be
available on acceptable terms, or at all. |
| ● | MDxHealth’s term loan contains restrictions that
limit its flexibility in operating its business, and if the Company fails to comply with the covenants and other obligations under its
loan agreement, the lenders may be able to accelerate amounts owed under the facility and may foreclose upon the assets securing its obligations. |
| ● | MDxHealth may engage in acquisitions that could
disrupt its business, cause dilution to its stockholders and reduce its financial resources. |
| ● | MDxHealth’s federal loan subjects the Company
to a variety of federal regulations and although the Company may apply for forgiveness of this loan it may not be forgiven. |
Strategic and commercial risks
| ● | The molecular diagnostics industry is highly
competitive and characterised by rapid technological changes and the Company may be unable to keep pace with its competitors. |
| ● | The commercial success of MDxHealth will depend
on the market acceptance and adoption of its current and future tests. |
| ● | MDxHealth faces uncertainties concerning the
coverage and reimbursement of its tests by third-party payors. |
Intellectual property risks
| ● | If MDxHealth is unable to retain intellectual
property protection in relation to its Confirm mdx, Select mdx and GPS tests or if it is required to expend significant resources to protect
its intellectual property position, its competitive position could be undercut. |
Operational risks
| ● | Billing and collections processing for the Company’s
tests is complex and time-consuming, and any delay in transmitting and collecting for claims could adversely impact revenue. |
| ● | MDxHealth faces an inherent risk of product liability
claims. |
| ● | MDxHealth’s laboratory facilities may become
inoperable due to natural or man-made disasters or regulatory sanctions. |
| ● | MDxHealth relies on a limited number of third-party
suppliers for services and items used in the production and operation of its testing solutions, and some of those services and items are
supplied from a single source. Disruption of the supply chain, unavailability of third-party services required for the performance of
the tests, modifications of certain items or failure to achieve economies of scale could result in a reduction in revenues, which could
be material depending on the length of the supply disruption. |
| ● | Security breaches or loss of data may harm MDxHealth’s
reputation and expose it to liability. |
Regulatory risks
| ● | Failure to comply with governmental payor regulations
could result in MDxHealth being excluded from participation in Medicare, Medicaid or other governmental payor programs, which would adversely
affect MDxHealth’s revenues, given the importance of reimbursement to its revenue base. |
| ● | MDxHealth conducts business in a heavily regulated
industry, and changes in, or violations of, applicable regulations may, directly or indirectly, adversely affect its operational results
and financial condition, which could harm its business. |
| ● | If the FDA were to begin requiring approval or
clearance of the Company’s tests, the Company could incur substantial costs and time delays associated with meeting requirements for premarket
clearance or approval. |
| ● | MDxHealth expects to make significant investments
to research and develop new tests, which may not be successful. |
| ● | MDxHealth’s research and development efforts
will be hindered if it is not able to obtain samples, contract with third parties for access to samples or complete timely enrollment
in future clinical trials. |
| ● | MDxHealth’s expansion of its business beyond
the United States has resulted in additional regulatory requirements with which it must comply. |
| ● | MDxHealth’s operating results could be materially
adversely affected by unanticipated changes in tax laws and regulations, adjustments to its tax provisions, exposure to additional tax
liabilities, or forfeiture of its tax assets. |
Risks relating to the Company’s NASDAQ listing
and its ordinary shares
| ● | The Company may lose its foreign private issuer
status in the future, which could result in significant additional costs and expenses. |
| ● | As a result of being a public company trading
in the U.S., the Company is subject to regulatory compliance requirements, including Section 404, and if the Company fails to maintain
an effective system of internal controls, it may not be able to accurately report its financial results or prevent fraud. |
| ● | The Company will likely not be in a position
to pay dividends in the near future and intends to retain all earnings. |
| ● | Certain significant shareholders of the Company
may have different interests from the Company and may be able to control the Company, including the outcome of shareholder votes. |
| ● | The market price of the Company’s shares may
fluctuate widely in response to various factors. |
| ● | The Company’s securities are traded on more than
one market and this may result in price variations; in addition, investors may not be able to easily move securities for trading between
such markets. |
| ● | Future sales of substantial amounts of the Company’s
shares, or the perception that such sales could occur, could adversely affect the market value of the Shares. |
| ● | Any future capital increases by the Company could
have a negative impact on the price of the Company’s shares and could dilute the interests of existing shareholders. |
1.2. Information
about important events after the closing of the financial year and circumstances that could significantly influence the development of
MDxHealth
OrbiMed credit agreement
On May 1, 2024, the Company entered into a credit
agreement, by and between the Company, as guarantor, MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and one or
more affiliates of OrbiMed as lenders and administrative agent.
The credit agreement provides for a five-year
senior secured credit facility in an aggregate principal amount of up to USD 100 million, of which (i) USD 55 million was advanced on
the date of closing, (ii) USD 25 million will be made available, at MDxHealth, Inc.’s discretion, on or prior to March 31, 2025,
subject to certain net revenue requirements and other customary conditions, and, and (iii) USD 20 million will be made available, at MDxHealth,
Inc.’s discretion, on or prior to March 31, 2026, subject to certain net revenue requirements and other customary conditions.
All obligations under the OrbiMed credit agreement
are guaranteed by the Company and all of the Company’s subsidiaries (other than MDxHealth, Inc. and subject to certain exceptions)
and secured by substantially all of MDxHealth, Inc.’s and each guarantor’s assets. If, for any quarter until the maturity
date of the loan facility, the Company’s net revenue does not meet certain minimum amounts, then, subject to certain cure rights
specified in the OrbiMed credit agreement, MDxHealth, Inc. shall be required to repay the outstanding principal amount of the loan facility
in equal monthly instalments, together with accrued interest on the principal repaid and a repayment premium and other fees, until the
maturity date of the loan facility. MDxHealth, Inc. shall repay amounts outstanding under the loan facility in full immediately upon an
acceleration as a result of an event of default as set forth in the credit agreement, together with a repayment premium and other fees.
During the term of the loan facility, interest
payable in cash by MDxHealth, Inc. shall accrue on any outstanding amounts under the loan facility at a rate per annum equal to the greater
of (x) the SOFR rate for such period and (y) 2.50% plus, in either case, 8.50%. During an event of default, any outstanding amount under
the loan facility will bear interest at a rate of 4.00% in excess of the otherwise applicable rate of interest. MDxHealth, Inc. will pay
certain fees with respect to the loan facility, including an upfront fee, an unused fee on the undrawn portion of the loan facility, an
administration fee, a repayment premium and an exit fee, as well as certain other fees and expenses of OrbiMed.
The Company also agreed to issue warrants to affiliates
of OrbiMed to subscribe for up to 1,243,060 new ordinary shares, with no par value, at an exercise price of USD 2.4134 per ordinary share.
The issuance of the warrants is subject to an approval by an extraordinary general shareholders’ meeting of the Company, to be convened
by the Company. The warrants will have a term of five years from their issuance date. The warrants’ terms and conditions will contain
customary share adjustment provisions, as well as weighted average price protection in certain circumstances.
As part of the OrbiMed credit facility, the Company
repaid in full its existing $35 million debt facility with Innovatus.
ATM facility
On April 30, 2024, the Company entered into a
sales agreement with TD Securities (USA) LLC (“TD Cowen”) with respect to an equity offering program under which the
Company may offer and sell Company’s ordinary shares, no par value, having an aggregate offering price of up to USD 50.0 million
from time to time, through TD Cowen as its sales agent.
Sales of Company’s ordinary shares, if any,
in the offering may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under
the Securities Act of 1933, as amended, or the Securities Act, from time to time. TD Cowen is not required to sell any specific number
or dollar amount of securities, but will act as sales agent and use commercially reasonable efforts to arrange on the Company’s
behalf for the sale of all ordinary shares requested to be sold by the Company, consistent with TD Cowen’s normal sales practices.
There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The Company will pay TD Cowen a commission equal
to three percent (3.0%) of the gross sales price per ordinary shares sold through TD Cowen under the sales agreement and also has agreed
to provide indemnification and contribution to TD Cowen with respect to certain liabilities, including liabilities under the Securities
Act and the Securities Exchange Act of 1934, as amended.
The Company is not obligated to make any sales
of ordinary shares pursuant to the sales agreement. The facility will terminate upon the earlier of (i) the sale of all ordinary
shares subject to the sales agreement and (ii) the termination of the sales agreement as permitted therein. Each of the Company and
TD Cowen may terminate the sales agreement at any time upon four days’ prior notice.
Other
Notwithstanding
the above, since the end of the last financial year, there have been no significant developments in the financial or trading position
of the Company that would have required the publication of audited or interim financial information.
1.3. Research
and development
In 2023, MDxHealth
conducted product development projects based on the discovery R&D performed in the prior years for both its clinical diagnostic product
pipeline and clinical trials. Extensive work was performed in development of MDxHealth’s clinical solutions for prostate and bladder
cancers.
1.4. Use
of financial instruments
The functional
currency changed from the EURO to the US Dollar as of July 1, 2014. In consequence, the currency risk is concentrated on European operations.
Virtually all of
the Company’s currency risk currently relates to Euro. At this time, the Company does not use hedging instruments to cover the
exchange rate risk. As of December 31, 2023, cash deposits in EURO amounted to €357,000.
Interest rate risk:
During 2022, the Company entered into a 60-month loan and security agreement with Innovatus for a total amount of $70 million, under
which an amount of $35 million was drawn in 2022. The loan accrues interest at a floating per annum rate equal to the sum of (a) the
greater of (i) the Prime rate published in The Wall Street Journal in the “Money Rates” section or (ii) 4.00%, plus (b) 4.25%,
and require interest-only payments for the initial four years. For every increase of 0.25% in the Prime rate, the Company’s interest
expense increases by approximately $90,000 per year.
Cash and investment
risk: The credit risk on cash and cash equivalents of $22.4 million is limited given that the counterparties are banks with high credit
scores attributed by international rating agencies. The Company had no exposure to Silicon Valley Bank, Silvergate Bank, or Credit Suisse.
1.5. Public
takeover bids
As
part of the transition from the Company’s past dual listing on Euronext Brussels and NASDAQ to a sole listing on NASDAQ, the Company’s
shares were de-listed from Euronext Brussels on December 18, 2023. Euronext Brussels is a “regulated market” within the meaning
of the Markets in Financial Instruments Directive (Directive 2014/64/EU) (MiFID II) and the Markets in Financial Instruments Regulation
(Regulation (EU) 600/2014) (MiFIR), which came into effect on January 3, 2018. While NASDAQ is a reputed and well-known trading venue
for securities, it does not qualify as a regulated market in Belgium or elsewhere in the European Economic Area. Consequently, as a result
of the de-listing from Euronext Brussels, the Company no longer qualifies as a listed company pursuant to article 1:11 of the Belgian
Companies and Associations Code, nor as a public-interest entity pursuant to article 1:12 of the Belgian Companies and Associations Code
as from December 18, 2023.
The
board of directors confirms that, no takeover bid has been instigated by third parties in respect of the Company’s equity during
the financial year 2023.
1.6. Branch
offices
The Company does
not have any branch. MDxHealth operates a second U.S. laboratory, operating as Delta Laboratories LLC (d/b/a MDxHealth Central), located
at 7000 Preston Road in Plano, Texas.
1.7. Justification
of valuation rules on the basis of going concern
MDxHealth has experienced
net losses and significant cash used in operating activities since its inception in 2003, and as of December 31, 2023, had an accumulated
deficit of $331.4 million, a net loss of $43.1 million, and net cash used in operating activities of $21.5 million. Management expects
the Company to continue to incur net losses and have significant cash outflows for at least the next twelve months. While these conditions,
among others, could raise substantial doubt about its ability to continue as a going concern, these statutory and consolidated financial
statements have been prepared assuming that MDxHealth will continue as a going concern. This basis of accounting contemplates the recovery
of its assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations
is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure. The board of directors
believes that the losses are related to MDxHealth’s current stage of development in the biotechnology sector, and are not representative
of MDxHealth’s potential to become profitable. In recent years, MDxHealth has managed to end each financial year with sufficient
cash, available-for-sale investments or financing commitments to cover its cash requirements for more than one year.
As of December 31, 2023, the Company had cash
and cash equivalents of $22.4 million. On May 1, 2024, the Company’s U.S. subsidiary closed a $100 million loan and security agreement
with funds managed by OrbiMed Advisors LLC. The Group drew down $55 million from this loan, replacing its existing $35 million debt facility
with Innovatus. Taking into account the above financial situation and on the basis of the most recent business plan including the Company’s
expected ability to access additional cash through debt, equity, or other means, the Company believes that it has sufficient cash to
be able to continue its operations for at least the next twelve months from the date of issuance of these financial statements, and accordingly
has prepared the consolidated financial statements assuming that it will continue as a going concern. This assessment is based on forecasts
and projections within management’s most recent business plan as well as the Company’s expected ability to meet the conditions
and covenants as embedded in the OrbiMed credit facility and to be able to access additional cash through debt, equity or other means,
for which at this moment a material uncertainty exists that casts substantial doubt on the Company’s ability to continue as a going
concern. The Company also believes the going concern assumption is justified based on its ability to realize cost savings in case it
will not be successful in raising additional cash through debt, equity or other means.
See also paragraph “Comments on the approval
of the statutory financial statements” above.
1.8. Conflicts
of interests and related party transactions (Articles 7:96 and 7:97 BCAC)
Article 7:96 BCAC
provides for a special procedure within the board of directors in the event of a potential conflict of interest between one or more directors
in relation to one or more decisions or transactions falling within the remit of the board of directors. In the event of a conflict of
interest, the director concerned is required to inform his or her peers before the conflict arises. In this respect, the director concerned
is also required to comply with the rules of the Belgian Companies and Associations Code.
In addition, Article
7:97 BCAC provides that a special procedure applies to intra-group or related party transactions. This procedure applies to decisions
or transactions between the Company and related parties, but which are not subsidiaries of the Company. It also applies to decisions
or transactions between any subsidiary of the Company and related parties to those subsidiaries, but which are not themselves subsidiaries
of the Company. However, this procedure does not apply to decisions made or transactions entered into in the normal course of business
dealt with under market conditions, or to decisions and transactions the value of which does not exceed 1% of the consolidated net assets
of the Company. Furthermore, this procedure no longer applies to the Company (nor its subsidiaries) since the de-listing of the Company’s
shares from Euronext Brussels on December 18, 2023.
In 2023, the Company
did not proceed with any related party transactions.
In accordance with
Article 7:96 of the Belgian Companies and Associations Code, the board of directors has clearly indicated whenever it has encountered
an interest of a proprietary nature that is potentially opposed to the interests of the Company.
In 2023, the following
conflict of interest was reported:
Minutes of the
board of directors’ meeting of March 21, 2023.
“Prior
to the deliberation and resolutions by the Board regarding the approval of items concerning executive remuneration matters, Mr. McGarrity
made the following declarations insofar as needed and applicable, in accordance with Article 7:96 of the Belgian Companies and Associations
Code. As an agenda item entails discussions by the Board on items concerning executive remuneration matters, Mr. McGarrity could be in
a situation of conflict of interests within the meaning of Article 7:96 of the Belgian Companies and Associations Code in relation to
the resolutions to be passed by the Board in connection with this sole item on the agenda. Mr. McGarrity will also inform the Company’s
statutory auditor of the foregoing, insofar as necessary and applicable, in accordance with the provisions of Article 7:96 of the Belgian
Companies and Associations Code. Hence, Mr. McGarrity informed the meeting that he would not take part in the further deliberation and
resolutions of the Board in relation with this sole item on the agenda. Subsequently, Mr. McGarrity no longer took part in the further
deliberation and resolutions of the Board with respect to the above-referenced agenda item.
At the invitation
of the Chairman of the Board, Mr. Hardison submitted to the meeting the Reports of the Nomination and Remuneration Committee following
its meetings held on September 12, 2022, and March 1, 2023. Each of the directors confirmed their receipt and review of the submitted
Reports. The Board discussed the recommendations that were made by the Nomination and Remuneration Committee in relation to the annual
performance review of the Company’s executive management and the executive remuneration determinations of the Committee. The Board
was of the opinion that, taking into account the other elements proposed by the Nomination and Remuneration Committee, these elements
were appropriate and reasonable, and the determinations are approved and ratified by the Board. “
The financial consequences
of this decision are disclosed in Item 6B (Director Compensation) of the Company’s 20-F.
1.9. Acquisition
of own shares (Article 7:220 BCAC)
Neither the Company
nor any person acting in his own name but on behalf of the Company has acquired shares of the Company during the financial year 2023.
1.10. Transactions
under the authorised capital (Article 7:203 BCAC)
Capital increase
of October 20, 2023
On August 2, 2022, the Company and Exact Sciences
entered into an asset purchase agreement (the “Asset Purchase Agreement”) pursuant to which, among other things and
subject to the terms and conditions included in the Asset Purchase Agreement, Exact Sciences agreed to sell and assign, and the Company
agreed to purchase and assume, the business of developing, marketing and performing the Oncotype DX Genomic Prostate Score test (the
“GPS Test Business”). On August 23, 2023, the Company and Exact Sciences entered into an amendment to the Asset Purchase
Agreement (as further amended on October 9, 2023).On October 20, 2023, in the framework of the amendment to the Asset Purchase Agreement,
the board of directors decided to increase the share capital of the Company within the framework of the authorized capital, with an amount
of EUR 877,500, against the issuance by the Company of 2,500,000 new ordinary shares, to be delivered to Exact Sciences at an issue price
per new share of EUR 0.3324, as contemplated by the amendment to the Asset Purchase Agreement.
Exhibit 99.7
English translation -
For information purposes only
MDXHEALTH
Limited
Liability Company
CAP
Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal
Belgium
Registered
with the Register of Legal Persons
VAT BE 0479.292.440 (RLP Liège, division Liège)
Report
of the Board of Directors
in accordance with ARTICLES 7:180 and 7:191
of
the Belgian Companies AND ASSOCIATIONS Code
This
report has been prepared by the board of directors of MDxHealth SA (the “Company”) in accordance with articles 7:180
and 7:191 of the Belgian Companies and Associations Code (as amended from time to time) (the “Belgian Companies and Associations
Code”). It relates to the proposal of the board of directors to issue a total number of 2,000,000 share options in the form
of subscription rights (the “2024 Share Options”) in order to enable the Company to grant them to certain members of
the personnel of the Company and its subsidiaries from time to time, within the meaning of article 1:27 of the Belgian Companies and
Associations Code (the “Selected Participants”), in the framework of a share option plan, called the “2024 Share
Option Plan”, and the proposal of the board of directors to dis-apply, in the interest of the Company, the statutory preferential
subscription right of the Company’s existing shareholders and, insofar as required, of the Company’s existing holders of subscription
rights (share options), for the benefit of the Selected Participants. The proposals will be submitted to an extraordinary general shareholders’
meeting to be held before a notary public (the “EGM”).
In
accordance with article 7:180 of the Belgian Companies and Associations Code, the board of directors provides in this report a justification
of the proposed issuance of 2024 Share Options, with notably a justification of the proposed exercise price of the 2024 Share Options
and a description of the consequences of the proposed issuance of 2024 Share Options for the financial and shareholder rights of the
shareholders of the Company.
In
accordance with article 7:191 of the Belgian Companies and Associations Code, the board of directors also provides in this report a justification
of the proposed dis-application of the statutory preferential subscription right of the existing shareholders and, insofar as required,
of the existing holders of subscription rights (share options), for the benefit of the Selected Participants in connection with the proposed
issuance of 2024 Share Options and a description of the consequences thereof for the financial and shareholder rights of the shareholders.
This
report must be read together with the report prepared in accordance with articles 7:180 and 7:191 of the Belgian Companies and Associations
Code by the Company’s statutory auditor, BDO Réviseurs d’Entreprises SRL, a limited liability company organised and existing under
the laws of Belgium, with registered office at Da Vincilaan 9 E.6, 1930 Zaventem, Belgium, represented by Mr. Bert Kegels.
Free English translation - For information purposes only
| 2. | proposed
issuance of the 2024 share options |
The
board of directors proposes to issue a total number of 2,000,000 2024 Share Options to the Selected Participants in order to achieve
the following goals:
| (a) | encourage,
motivate and retain the Selected Participants; |
| (b) | enable
the Company and its subsidiaries to attract and retain Members of the Personnel with the
required experience and skills; and |
| (c) | link
the interests of the Selected Participants closer to the interests of the shareholders of
the Company by giving them the opportunity to share in the increase of the value of the Company. |
The
Company has used share options in the past as a form of incentive and compensation for members of the personnel. For an overview of the
outstanding share option plans, see also below in section 6.1(d). As the available headroom under the currently outstanding plans is
no longer sufficient, the board of directors proposes to create the 2024 Share Options. In order to enable the Company to grant the 2024
Share Options to the Selected Participants in accordance with the proposed terms and conditions of the 2024 Share Option Plan attached
hereto as Annex A, the board of directors proposes to dis-apply, in the interest of the Company, the statutory preferential
subscription right of the Company’s existing shareholders and, insofar as required, of the Company’s existing holders of subscription
rights (share options), for the benefit of the Selected Participants. The issuance of the 2024 Share Options and the resolution on the
dis-application of the preferential subscription right shall be submitted to the EGM.
The
main terms governing the 2024 Share Options can be summarized as follows:
| (a) | Term
of the 2024 Share Options: The duration of a 2024 Share Option shall be ten (10) years
as of the date on which they are issued. The board of directors, or any other committee created
or person appointed by the board of directors in accordance with the 2024 Share Option Plan,
shall, however, have the right to shorten such term. |
| (b) | Form
of the 2024 Share Options: The 2024 Share Options shall be issued as subscription rights
in registered form. |
| (c) | Underlying
shares: Each 2024 Share Option shall entitle the holder thereof to subscribe for one
new share to be issued by the Company. The new shares to be issued at the occasion of the
exercise of the 2024 Share Options shall have the same rights and benefits as, and rank pari
passu in all respects, including as to entitlements to dividends and other distributions,
with the existing and outstanding shares of the Company at the moment of their issuance,
and will be entitled to dividends and other distributions in respect of which the relevant
record date or due date falls on or after the date of issue of the new shares. |
| (d) | Dis-application
of the statutory preferential subscription right: The board of directors proposes to
dis-apply, in the interest of the Company, the statutory preferential subscription right
of the Company’s existing shareholders and, insofar as required, of the Company’s existing
holders of subscription rights (share options), for the benefit of the Selected Participants
in accordance with article 7:191 of the Belgian Companies and Associations Code. |
| (e) | Confirmation
of the subscription to the 2024 Share Options by the Company: Subject to the dis-application
of the statutory preferential subscription right of the Company’s existing shareholders and,
insofar as required, of the Company’s existing holders of subscription rights (share options),
for the benefit of the Selected Participants in accordance with article 7:191 of the Belgian
Companies and Associations Code, the Company shall be able to subscribe for the 2024 Share
Options, with a view to creating a pool of outstanding 2024 Share Options available for further
grants to Selected Participants. The Company may not, however, exercise the 2024 Share Options
for its own account. |
Free English translation - For information purposes only
| (f) | Issuance
price of the 2024 Share Options: The 2024 Share Options will be granted free of charge. |
| (g) | Exercise
price of the 2024 Share Options: The exercise price of a 2024 Share Option shall be determined
by the board of directors, or any other committee created or person appointed by the board
of directors in accordance with the 2024 Share Option Plan, of the Company on the date of
the grant thereof. |
Unless
determined otherwise by the board of directors, or any other committee created or person appointed by the board of directors in accordance
with the 2024 Share Option Plan, prior to, at, or after the date of grant, the exercise price shall not be lower than the lower of (i)
the price of the shares on the relevant stock market on which the shares are listed and traded on the day prior to the date of grant
of the relevant 2024 Share Option (should the shares be listed on Nasdaq, Nasdaq must be used as market of reference), and (ii) the average
price of the shares on the relevant stock market on which the shares are listed and traded during the period of 30 days preceding the
date of grant of the relevant 2024 Share Option (should the shares be listed on Nasdaq, Nasdaq must be used as market of reference).
| (h) | Vesting
policy: Unless determined otherwise by the board of directors, or any other committee
created or person appointed by the board of directors in accordance with the 2024 Share Option
Plan, the 2024 Share Options to be granted to a Selected Participant in a capacity other
than the capacity of non-executive director of the Company shall vest in instalments of twenty-five
percent (25%) per year during a period of four (4) years as of the date of grant of the relevant
2024 Share Options, as follows: |
| (i) | on
the first anniversary date of the date of grant: 25%; |
| (ii) | during
the second year from the date of grant: maximum 25%, i.e., maximum 50% in total over the
first two years after the date of grant; |
| (iii) | during
the third year from the date of grant: maximum 25%, i.e., maximum 75% in total over the first
three years after the date of grant; and |
| (iv) | as
from the fourth year from the date of grant: 25%, i.e., maximum 100% in total over the first
four years after the date of grant. |
During
the second, third, and fourth years after the date of grant, the 2024 Share Options granted to a Selected Participant in any capacity
other than the capacity of non-executive director of the Company shall vest pro rata temporis on a quarterly basis.
The
2024 Share Options granted to a non-executive director of the Company shall all vest on the date of the ordinary general shareholders’
meeting that takes place in the calendar year following the calendar year in which the 2024 Share Options were granted, provided that
on the date preceding the date of the former ordinary general shareholders’ meeting the mandate of such non-executive director of the
Company has not terminated (without prejudice to section 7.1.3 of the 2024 Share Option Plan).
Free English translation - For information purposes only
| (i) | Exercisability:
Provided that section 7.1.3 of the 2024 Share Option Plan is not applicable, all vested 2024
Share Options shall be exercisable during any exercise period as of and from the moment where
such 2024 Share Options became vested 2024 Share Options. A Selected Participant is allowed
to exercise any vested 2024 Share Options during any exercise period following the exercisability
date. |
| (j) | Transferability
of the 2024 Share Options: The 2024 Share Options granted to the Selected Participants
will generally not be transferable (except in case of decease in the event of 2024 Share
Options granted to a natural person and except if the board of directors, or any other committee
created or person appointed by the board of directors in accordance with the 2024 Share Option
Plan, decides otherwise). |
| (k) | Exercise
of the 2024 Share Options: Each of the 2024 Share Options may be exercised starting as
from the date of issuance until ten (10) years as of the date on which they are issued, at
the times and in the manner specified in the 2024 Share Option Plan. |
| (l) | Increase
of the share capital of the Company: Upon exercise of 2024 Share Options and issue of
new shares, the aggregate amount of the exercise price of the 2024 Share Options will be
allocated to (as the case may be, following conversion
into the Company’s share capital currency, on the basis of the relevant USD/EUR exchange
ratio as shall be published by the European Central Bank (“ECB”), as provided
in section 5.2 of the 2024 Share Option Plan)
the share capital of the Company. To the extent that the amount of the exercise price
of the 2024 Share Options, per share to be issued upon exercise of the 2024 Share Options,
exceeds the fractional value of the then existing shares of the Company existing immediately
prior to the issue of the new shares concerned, a part of the exercise price, per share to
be issued upon exercise of the 2024 Share Options, equal to such fractional value shall be
booked as share capital, whereby the balance shall be booked as issue premium. Following
the capital increase and issuance of new shares, each new and existing share shall represent
the same fraction of the share capital of the Company. |
| (m) | Issue
premium: Any issue premium that will be booked in connection with the 2024 Share Option
Plan shall be accounted for on a non-distributable account on the liabilities side of the
Company’s balance sheet under its net equity, and the account on which the issue premium
will be booked shall, like the share capital, serve as a guarantee for third parties and
can only be reduced on the basis of a lawful resolution of the general shareholders’ meeting
passed in the manner required for an amendments to the Company’s articles of association. |
| 3. | Justification
of the proposed issuance of 2024 share options |
The
board of directors of the Company deems the proposed issuance of the 2024 Share Options to be in the Company’s interest because, on the
one hand, it enables the Company to receive new financial resources if and when the 2024 Share Options are exercised and, on the other
hand, it enables the Company to offer to the Selected Participants a (potential) participation in the Company’s share capital, which,
according to the board of directors, can be considered an appropriate tool to value the loyalty and motivation of the Selected Participants
and to encourage such loyalty and motivation.
Furthermore,
the ability to remunerate Selected Participants with the 2024 Share Options allows the Company to limit the portion of remuneration in
cash that the Company would otherwise need to pay to attract or retain renowned experts with the most relevant skills, knowledge and
expertise. For the surplus, the board of directors is of the opinion that such remuneration package is adapted and customary for companies
in the biotech and life sciences industry that are still in a development phase
Free English translation - For information purposes only
For
a more detailed description of the purpose and the objective of the proposed issuance of the 2024 Share Options, reference is made to
section 1 of the 2024 Share Option Plan attached hereto as Annex A.
Finally,
the proposed issuance of the 2024 Share Options is also in line with the remuneration policy that, upon recommendation of the nomination
and remuneration committee, was approved by the Company’s ordinary general shareholders’ meeting held on May 27, 2021.
For
all of the above reasons, the board of directors believes that the proposed issuance of the 2024 Share Options is in the interest of
the Company, its shareholders, and other stakeholders.
| 4. | justification
of the proposed issuance price and exercise price of the 2024 share options |
Pursuant
to the terms and conditions of the 2024 Share Option Plan, the 2024 Share Options will be granted to the Selected Participants without
any further consideration.
The
exercise price of the 2024 Share Options shall be determined as summarised in section 2(g) of this report. For a detailed overview
of the conditions concerning the issuance price and exercise price of the 2024 Share Options, reference is made to sections 5.1 and 5.2
of the 2024 Share Option Plan attached hereto as Annex A.
The
board of directors considers the fall-back mechanism for the proposed exercise price of the 2024 Share Options to be justified, since
(amongst other things) it limits the potential financial dilution to a certain extent and it enables the Company to obtain additional
cash resources as mentioned above and further described below. In any event, the terms and conditions of the 2024 Share Options also
allow for a different mechanism. This will allow the Company to set the exercise price in such a manner and with reference to such price
points as shall be appropriate in order to take into account the tax and social security situation of the relevant Selected Participants
and the ultimate goals of the 2024 Share Options Plan.
Whether
or not a 2024 Share Option will be exercised depends on the (sole) decision of the holder of the 2024 Share Option. Such decision will
depend on the price of the share of the Company at the moment of the decision whether or not to exercise as compared with the exercise
price of the 2024 Share Option, since essentially, the holder can realise a capital gain at the exercise of the 2024 Share Option if
the price of the share of the Company at that moment is higher than the exercise price of the 2024 Share Option (not taking into account
the possible tax related costs and assuming that the holder of the 2024 Share Option can sell the underlying share at such price on the
market).
Upon
exercise of the 2024 Share Options, the exercise price shall be booked as share capital and issue premium as further described in section
6.2 of this report.
Hence,
in view of all of the foregoing, the board of directors believes that the proposed issue price and exercise price of the 2024 Share Options
can be sufficiently justified and are without prejudice to existing shareholders and holders of outstanding subscription rights (share
options) of the Company.
Free English translation - For information purposes only
| 5. | Justification
of the dis-application of the preferential subscription right |
The
board of directors proposes to issue a total number of 2,000,000 2024 Share Options, to be offered to the Selected Participants, in accordance
with the terms and conditions of the 2024 Share Option Plan.
Each
2024 Share Option shall entitle the Selected Participant to acquire one (1) share of the Company, to which the same rights and benefits
as the outstanding shares of the Company are attached. All 2024 Share Options together entitle the holders thereof to subscribe for an
aggregate 2,000,000 new shares of the Company, which equals to approximately 7.33% of the existing shares representing the share capital
of the Company immediately prior to the issuance of the 2024 Share Options (assuming all the granted 2024 Share Options are fully exercisable
and exercised under the terms and conditions of the 2024 Share Option Plan).
In
order to be able to offer the 2024 Share Options to the Selected Participants in accordance with the proposed terms and conditions of
the 2024 Share Option Plan, the board of directors proposes to dis-apply the statutory preferential subscription right of the Company’s
existing shareholders and, insofar as required, of the Company’s existing holders of subscription rights (share options), for the benefit
of the Selected Participants in accordance with article 7:191 of the Belgian Companies and Associations Code.
For
all of the above reasons, the board of directors is of the opinion that the proposed issuance of 2024 Share Options, with the proposed
dis-application of the statutory preferential subscription right for the benefit of the Selected Participants, and notwithstanding the
dilution following therefrom for the shareholders and the holders of subscription rights (share options), is in the interest of both
the Company and the existing shareholders and holders of subscription rights (share options).
| 6. | Certain
financial consequences |
| 6.1. | Introductory
comments |
The
following paragraphs provide an overview of certain financial consequences of the proposed issuance and exercise of 2024 Share Options.
For further information with regard to the financial consequences of the proposed issuance and exercise of 2024 Share Options, reference
is also made to the report prepared in accordance with articles 7:180 and 7:191 of the Belgian Companies and Associations Code by the
statutory auditor of the Company, BDO Réviseurs d’Entreprises SRL.
The
actual financial consequences resulting from the proposed issuance and exercise of 2024 Share Options cannot yet be determined with certainty,
as the final exercise price of the respective 2024 Share Options is still to be determined and will depend on the price of the Company’s
shares on the relevant stock market or trading platform prior to the date of the grant of the 2024 Share Options. In addition, whether
or not certain financial consequences will materialise will depend on whether the 2024 Share Options will be granted to Selected Participants,
and whether these 2024 Share Options will ultimately be exercised. The decision to exercise the 2024 Share Options is a decision that
solely rests with the holder of the 2024 Share Options, and will likely be in function of the market price of the shares of the Company
at the moment of exercise compared to the exercise price of the relevant 2024 Share Options (see also below).
Free English translation - For information purposes only
Likewise,
the actual financial consequences resulting from the exercise or conversion for shares of the other outstanding and proposed new dilutive
instruments of the Company cannot yet be determined with certainty.
| |
Accordingly, the discussion herein of the financial consequences of the proposed issuance and exercise of the 2024 Share Options for existing shareholders is purely illustrative and hypothetical, and is based on purely indicative financial parameters (where relevant). The actual number of shares to be issued upon exercise of the 2024 Share Options and their issuance and exercise price may vary significantly from the hypothetical values used in this report. |
Subject
to the foregoing reservations, for the purposes of the illustration of some of the financial consequences of the exercise of the 2024
Share Options and notably the dilution for the shareholders, the following parameters and assumptions were used:
| (a) | Exchange
Rate1: For the purpose of the simulations and illustrations below, the following
exchange rate is used: USD 1.0743 for 1 EUR, which is the exchange rate as published
by the ECB on https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html
on May 8, 2024( the “Exchange Rate”). |
| (b) | Hypothetical
exercise price: The hypothetical exercise price of the 2024 Share Options to be issued
(to be determined as set out in paragraph 2(g) of this report) will be: |
| (i) | EUR 2.3736
per 2024 Share Option (or USD 2.5500, representing a discount of 15% against the closing
price of the Company’s shares on Nasdaq on
May 8, 2024 (i.e., USD 3.00)); |
| (ii) | EUR 2.5133
per 2024 Share Option (or USD 2.7000, representing a discount of 10% against the closing
price of the Company’s shares on Nasdaq on
May 8, 2024 (i.e., USD 3.00)); and |
| (iii) | EUR 2.9321
per 2024 Share Option (or USD 3.1500, representing a premium of 5% against the closing
price of the Company’s shares on Nasdaq on
May 8, 2024 (i.e., USD 3.00)). |
| (c) | Current
share capital: At the date of this report, the share capital of the Company amounts to
EUR 164,302,752.89 represented by 27,288,093 shares without nominal value, each representing
the same fraction of the share capital, i.e., (rounded) EUR 6.0210. The
share capital is entirely and unconditionally subscribed for and is fully paid-up. |
| (d) | Share
Options: Furthermore, the following 18,388,230 subscription rights issued by the Company
are still outstanding at the date of this report (the “Share Options”): |
| (i) | 522,500
outstanding share options issued under the form of subscription rights on June 23, 2014
(“2014 Share Options”) (of which 68,500 share options have not yet been
granted)2; |
| 1 | The
Company’s shares are listed on Nasdaq, where they are traded in USD. However, the Company’s
share capital is currently expressed in EUR. In view of the current difference between the
Company’s shares trading currency and the Company’s share capital currency, except for amounts
in the financial dilution simulations in paragraph 6.4 below, all amount in USD used in the
simulations herein are converted in EUR on the basis of the Exchange Rate. |
| 2 | All
2014 Share Options that are not exercised by June 23, 2024 will automatically lapse and become
null and void. |
Free English translation - For information purposes only
| (ii) | 1,866,000
outstanding share options issued under the form of subscription rights on June 19,
2017 (“2017 Share Options”) (which have all been granted); |
| (iii) | 2,632,860
outstanding share options issued under the form of subscription rights on June 21,
2019 (“2019 Share Options”) (of which 1,500 share options have not yet been
granted); |
| (iv) | 3,525,000
outstanding share options issued under the form of subscription rights on May 27, 2021 (“2021
Share Options”) (which have all been granted); |
| (v) | 4,851,870
outstanding share options issued under the form of subscription rights on May 25, 2022 (“2022
Share Options”) (of which 2,500 share options have not yet been granted); and |
| (vi) | 4,990,000
outstanding share options issued under the form of subscription rights on June 30, 2023 (“2023
Share Options”) (of which 1,960,000 share options have not yet been granted). |
Each
of the aforementioned Share Options entitles the holders thereof to subscribe for one new share of the Company upon exercise of the relevant
Share Option. For the purpose of the full-dilution scenario calculations further below, it is assumed that all of the 18,388,230 outstanding
Share Options (including the 68,500 outstanding 2014 Share Options, the 1,500 outstanding 2019 Share Options, the 2,500 outstanding 2022
Share Options and the 1,960,000 outstanding 2023 Share Options that can still be granted) have been effectively granted, have vested
and are exercisable. On that basis, if all 18,388,230 Share Options were exercised, 1,838,823 new shares would need to be issued by the
Company.
| (e) | Exact
Sciences Earn-Out Consideration: On August 2, 2022, the Company entered into an asset
purchase agreement with Genomic Health, Inc. (a subsidiary of Exact Sciences Corporation
referred to herein as “Exact Sciences”), pursuant to which, among other
things and subject to the terms and conditions included in the asset purchase agreement,
Exact Sciences agreed to sell and assign, and the Company agreed to purchase and assume,
the business of developing, marketing and performing the Oncotype DX Genomic Prostate Score
test (the “GPS Test Business”) for an aggregate purchase price of up to
USD 100,000,000.00 to be paid as follows: (i) an amount of USD 24,999,999.64, which
was paid on the date of the asset purchase agreement, (ii) an amount of USD 5,000,000.36,
which was contributed in kind by Exact Sciences to the Company on August 11, 2022, within
the context of a capital increase by the Company within the framework of the authorised capital
of the Company against the issuance by the Company of 6,911,710 new shares, and (iii) an
additional aggregate earn-out amount of up to USD 70,000,000.00. On August 23, 2023,
the Company and Exact Sciences entered into an amendment to the asset purchase agreement
(as further amended on October 9, 2023), pursuant to which they agreed to defer the payment
of the up to USD 70,000,000.00 earn-out amount, in consideration of (i) the increase
and replacement of the up to USD 70,000,000.00 earn-out amount by an aggregate earn-out
amount of up to USD 82,500,000.00 to be paid by the Company to Exact Sciences upon achievement
of certain revenue milestones related to fiscal years 2023 through 2025, with the maximum
earn-out payable in relation to 2023 and 2024 not to exceed USD 30,000,000.00 plus USD 10,000,000.00
(or such lesser amount if the maximum earn-out amount required to be paid exceeds USD 82,500,000.00
in the aggregate) and USD 40,000,000.00, respectively (the “Exact Sciences Earn-Out
Consideration”), (ii) the payment of an additional cash consideration of USD 250,000
(paid on August 23, 2023), (iii) the contribution in kind (completed on October 20, 2023)
of an amount of USD 877,500.00, within the context of a capital increase by the Company
within the framework of the authorised capital of the Company against the issuance by the
Company of 2,500,000 new shares, and (iv) the commitment by the Company to issue to the benefit
of Exact Sciences the Exact Sciences Warrants (as defined below). At the option of the Company,
amounts reflecting the Exact Sciences Earn-Out Consideration can be settled in cash or through
the issuance of additional shares of the Company by contribution in kind of the relevant
receivables due by the Company (at an issue price per share valued in function of a volume
weighted average trading price of the Company’s shares at the end of the relevant earn-out
period) to be delivered to Exact Sciences, provided that the aggregate number of shares held
by Exact Sciences shall not exceed more than 7.5% of the outstanding shares of the Company. |
Free English translation - For information purposes only
For
the purpose of the full-dilution scenario calculations further below, it is assumed that the full Exact Sciences Earn-Out Consideration
amount of USD 82,500,000.00 is converted, by applying the Exchange Rate (see paragraph 6.1(a)), into EUR 76,794,191.56 and
is fully paid in kind by the Company to Exact Sciences by the issuance of new shares of the Company at the hypothetical issue prices
(see paragraph (6.1(b)) in consideration of the settlement through a contribution in kind of receivables due by the Company to Exact
Sciences up to the Earn-Out Consideration. To reflect maximum dilution, the maximum 7.5% shareholding cap (as described above) is not
taken into account in the simulations below. Should this 7.5% shareholding cap be applied, only 3,678,875 shares could be issued to Exact
Sciences on a fully diluted basis, taking into account the most dilutive parameters used herein.
| (f) | Exact
Sciences Warrants: In the context of the amendment to the asset purchase agreement with
Exact Sciences (as described in paragraph 6.1(e) above), the Company has committed to issue
to the benefit of Exact Sciences, 1,000,000 new subscription rights for new shares of the
Company (each exercisable for 1 new share of the Company at an exercise price per new share
of USD 5.265) with a term until August 22, 2028 (the “Exact Sciences Warrants”).
The proposed issuance of the Exact Sciences Warrants will be submitted for approval by the
same extraordinary general shareholders’ meeting of the Company as the one that will need
to decide on the issuance of the 2024 Share Options and the OrbiMed Warrants (as defined
below). |
For
the purpose of the full dilution scenario calculations further below, it is assumed that the 1,000,000 Exact Sciences Warrants are issued
and all exercised, for a total of 1,000,000 newly issued shares at an issue price of USD 5.265 per new shares, resulting in a total
issue price of USD 5,265,000, or, applying the Exchange Rate, at an issue price of EUR 4.900 per new shares, resulting in a total
issue price of EUR 4,900,000 (including issue premium, if any).
| (g) | ATM
Facility: On April 30, 2024, the Company entered into a sales agreement with TD Securities
(USA) LLC (“TD Cowen”) with respect to an equity offering program under
which the Company may offer and place new shares, via TD Cowen and through various placements
from time to time in an “at the market offering”, as defined in Rule 415 promulgated
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, for
an aggregate maximum offering amount of USD 50,000,000 (the “ATM Facility”).
The actual number of new shares to be issued in the framework of the ATM Facility will vary
depending on the effective placements of new shares and on the price for each such placements.
However the number of new shares to be issued in the framework of the ATM Facility shall
not exceed 100,000,000 shares. Such new shares will be placed at a final subscription price
per new share in function of the then current USD market prices on Nasdaq at the time of
the relevant placements, while such issue price cannot be lower than USD 0.50. |
For
the purpose of the full-dilution scenario calculations further below, it is assumed that (i) new shares are issued under the ATM
Facility for the full amount of USD 50,000,000.00, and (ii) all such new shares issued under the ATM Facility are issued at an
issue price per share of USD 3.00 (i.e., the closing price of the Company’s shares on Nasdaq on May 8, 2024). On that basis,
applying the Exchange Rate, EUR 46,541,934.28 would be raised by the Company against the issuance 16,681,696 new shares of the
Company at an issue price of EUR 2.79 per share.
Free English translation - For information purposes only
| (h) | OrbiMed
Warrants: On May 1, 2024, the Company entered into a credit agreement, as guarantor,
with MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and ORC SPV
LLC (“OrbiMed”), as lender and administrative agent, pursuant to which OrbiMed
agreed to provide a five-year senior secured credit facility in an aggregate principal amount
of up to USD 100 million, of which (i) USD 55 million was advanced on the date of closing,
(ii) USD 25 million will be made available, at MDxHealth, Inc.’s discretion, on or
prior to March 31, 2025, subject to certain net revenue requirements and other customary
conditions, and, and (iii) USD 20 million will be made available, at MDxHealth, Inc.’s
discretion, on or prior to March 31, 2026, subject to certain net revenue requirements and
other customary conditions. Furthermore, pursuant to the credit agreement, the Company has
committed to issue to the benefit of affiliates of OrbiMed, 1,243,060 new subscription rights
for new shares of the Company (each exercisable for 1 new share of the Company at an exercise
price per new share of USD 2.4134) with a 5 years term as from their issue date (the
“OrbiMed Warrants”). The proposed issuance of the OrbiMed Warrants will
be submitted for approval by the same extraordinary general shareholders’ meeting of the
Company as the one that will need to decide on the issuance of the 2024 Share Options and
the Exact Sciences Warrants. |
For
the purpose of the full dilution scenario calculations further below, it is assumed that the 1,243,060 OrbiMed Warrants are issued and
all exercised, for a total of 1,243,060 newly issued shares at an issue price of USD 2.41 (rounded) per new shares, resulting in
a total issue price of USD 2,995,774.60, or, applying the Exchange Rate, at an issue price of EUR 2.24 (rounded) per new shares,
resulting in a total issue price of EUR 2,784,454.40 (including issue premium, if any). It is also assumed that the aggregate subscription
price for the OrbiMed Warrants is paid in full upon issuance and subscription of the OrbiMed Warrants.
| (i) | Allocation
of the issue price of the outstanding dilutive instruments: Upon the issuance of new
shares upon exercise of the OrbiMed Warrants (should their issuance be approved by an extraordinary
general shareholders’ meeting of the Company), and/or the full placement of the ATM Facility,
and/or the contribution of the Exact Sciences Earn-Out Consideration, and/or the exercise
of the Share Options, and/or the exercise of the Exact Sciences Warrants (should their issuance
be approved by an extraordinary general shareholders’ meeting of the Company), the amount
of the issue price of the relevant new shares will be booked as equity (in the form of share
capital and share premium, as the case may be). The amount that shall be booked as share
capital shall, on a per share basis, be equal to the amount of the applicable fractional
value of the Company’s shares at the relevant time. The balance, as the case may be, shall
be booked as issue premium. |
Free English translation - For information purposes only
In
this report, when reference is made to “outstanding dilutive instruments”, it refers, respectively, to the issuance
of new shares upon exercise of the OrbiMed Warrants (assuming their issuance will be approved by an extraordinary general shareholders’
meeting of the Company), the full placement of the ATM Facility, the contribution of the Exact Sciences Earn-Out Consideration, exercise
of the outstanding Share Options and exercise of the Exact Sciences Warrants (assuming their issuance will be approved by an extraordinary
general shareholders’ meeting of the Company).
Whether
the outstanding Share Options, the OrbiMed Warrants (assuming their issuance will be approved by an extraordinary general shareholders’
meeting of the Company) or the Exact Sciences Warrants (assuming their issuance will be approved by an extraordinary general shareholders’
meeting of the Company) will be effectively exercised will ultimately depend on the decision of the respective holders thereof. Such
decision will likely be in function of the market price of the shares of the Company at the moment of exercise, compared to their respective
exercise prices. The respective holders will likely not exercise if the market price of the shares of the Company is less than the relevant
exercise price.
Whether
the Exact Sciences Earn-Out Consideration amount is due and converted into shares of the Company will depend on the fulfilment (or not)
of the respective conditions provided by the asset purchase agreement, as amended from time to time. Furthermore, should an Exact Sciences
Earn-Out Consideration amount be due by the Company to Exact Sciences, the Company can also ultimately opt to pay such Exact Sciences
Earn-Out Consideration amount in cash rather than in shares.
Whether
the full USD 50,000,000 amount is placed by the Company under the ATM Facility, the applicable issue prices for such placements and the
total number of new shares issued under the ATM Facility will depend on the ultimate decision of the Company to proceed with such placements,
the terms at which such placements are made (including the relevant USD market prices on Nasdaq used as reference to determine the relevant
issue prices) and whether such placements are successful or not.
In
order to reflect the maximum dilution below, it is assumed that none of the existing shareholders, holders of Share Options, OrbiMed
or Exact Sciences will be granted with and will exercise any of the 2024 Share Options.
| 6.2. | Evolution
of the share capital, voting power, participation in the results and other shareholder rights |
Each
share in the Company currently represents an equal part of the share capital of the Company and provides for one vote in function of
the part of the capital it represents. The issuance of the new shares upon exercise of the 2024 Share Options will lead to a dilution
of the existing shareholders of the Company and of the relative voting power of each share in the Company.
The
dilution relating to the voting right also applies, mutatis mutandis, to the participation of each share in the profit and liquidation
proceeds and other rights attached to the shares of the Company, such as the statutory preferential subscription right in case of a capital
increase in cash through the issuance of new shares or in case of the issuance of new subscription rights or convertible bonds.
Free English translation - For information purposes only
Specifically,
prior to the issuance of new shares upon exercise of the 2024 Share Options (and prior to the issuance of new shares pursuant the other
outstanding dilutive instruments), each share of the Company participates equally in the profit and liquidation proceeds of the Company
and each shareholder has a statutory preferential subscription right in case of a capital increase in cash or in case of the issuance
of new subscription rights or convertible bonds. Upon the issuance of new shares upon exercise of the 2024 Share Options, the new shares
to be issued will have the same rights and benefits as, and rank pari passu in all respects with, the existing and outstanding
shares of the Company at the moment of their issuance and delivery, and will be entitled to dividends and other distributions in respect
of which the relevant record date or due date falls on or after the date of issuance and delivery of the new shares. As a result (and
to the extent the new shares will be issued and subscribed for pursuant to the exercise of the 2024 Share Options), the participation
by the existing shareholders in the profit and liquidation proceeds of the Company and their holders’ statutory preferential subscription
right in case of a capital increase in cash, shall be diluted accordingly.
A
similar dilution occurs upon exercise or conversion of the other outstanding dilutive instruments.
Furthermore,
should the final exercise price of the new shares be below the fractional value of the existing shares of the Company (i.e., currently
rounded EUR 6.0210), to some extent, the issuance of the new shares might have had a reduced voting right, a reduced participation
in the profit and liquidation proceeds, and a reduced preferential subscription right. However, all of the new shares to be issued will
have to have the same rights and benefits as, and rank pari passu in all respects with, the existing and outstanding shares of
the Company. Therefore, in accordance with article 7:178 of the Belgian Companies and Associations Code, after the completion of the
issuance of the new shares upon exercise of the 2024 Share Options, all of the Company’s outstanding shares will have the same (as the
case may be adjusted) fractional value. This would entail that, at least conceptually, there would be a dilution of the voting right,
the right to participate in the profit and liquidation proceeds, and the preferential subscription right of the existing shares of the
Company to the benefit of the new shares.
Subject
to the methodological reservations noted in paragraph 6.1, the evolution of the share capital and the number of shares, with voting rights
attached thereto, of the Company as a result of the proposed issuance and exercise of all 2,000,000 2024 Share Options (and the subsequent
issuance of 2,000,000 new shares resulting from it) is simulated below in a scenario before dilution due to outstanding dilutive instruments,
as well as in a scenario after dilution due to outstanding dilutive instruments.
Free
English translation - For information purposes only
Evolution
of the number of outstanding shares
| | |
Exercise price | |
| | |
EUR 2.3736 | | |
EUR 2.5133 | | |
EUR 2.9321 | |
| | |
Equivalent to
USD 2.5500 | | |
Equivalent to
USD 2.7000 | | |
Equivalent to
USD 3.1500 | |
| | |
| | |
| | |
| |
| After exercise of the 2024 Share Options but before dilution due to outstanding dilutive instruments | |
| | |
| | |
| |
| (A) Outstanding shares | |
| 27,288,093 | | |
| 27,288,093 | | |
| 27,288,093 | |
| (B) New shares to be issued upon exercise of the 2024 Share Options | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,000,000 | |
| (C) Total number of shares outstanding after (B) | |
| 29,288,093 | | |
| 29,288,093 | | |
| 29,288,093 | |
| (D) Dilution | |
| 6.83 | % | |
| 6.83 | % | |
| 6.83 | % |
| | |
| | | |
| | | |
| | |
| After dilution due to outstanding dilutive instruments but before the exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Outstanding shares | |
| 27,288,093 | | |
| 27,288,093 | | |
| 27,288,093 | |
| (B) New shares to be issued upon exercise of all outstanding Share Option | |
| 1,838,823 | | |
| 1,838,823 | | |
| 1,838,823 | |
| (C) New shares to be issued upon contribution of the Exact Sciences Earn-Out Consideration | |
| 32,352,941 | | |
| 30,555,555 | | |
| 26,190,476 | |
| (D) New shares to be issued upon exercise of all Exact Sciences Warrants | |
| 1,000,000 | | |
| 1,000,000 | | |
| 1,000,000 | |
| (E) New shares to be issued upon exercise of all OrbiMed Warrants | |
| 1,243,060 | | |
| 1,243,060 | | |
| 1,243,060 | |
| (F) New shares to be issued upon full placement of the ATM Facility | |
| 16,681,696 | | |
| 16,681,696 | | |
| 16,681,696 | |
| (G) Total number of new shares to be issued under (B), (C), (D), (E) and (F) | |
| 53,116,520 | | |
| 51,319,134 | | |
| 46,954,055 | |
| (H) Total number of shares outstanding after (B), (C), (D), (E) and (F) | |
| 80,404,613 | | |
| 78,607,227 | | |
| 74,242,148 | |
After the exercise of the 2024 Share Options and after dilution due to outstanding dilutive instruments | |
| | | |
| | | |
| | |
| (A) Outstanding shares after dilution due to outstanding dilutive instruments | |
| 80,404,613 | | |
| 78,607,227 | | |
| 74,242,148 | |
| (B) New shares to be issued upon exercise of the 2024 Share Options | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,000,000 | |
| (C) Total number of shares outstanding after (B) | |
| 82,404,613 | | |
| 80,607,227 | | |
| 76,242,148 | |
| (D) Dilution | |
| 2.43 | % | |
| 2.48 | % | |
| 2.62 | % |
Subject
to the methodological reservations noted in paragraph 6.1, the table below reflects the evolution of the share capital, assuming the
exercise of all 2,000,000 2024 Share Options and the subsequent issuance of 2,000,000 new shares resulting from it. The maximum amount
of share capital increase (excluding issue premium) is computed by multiplying the number of new shares to be issued (i.e., 2,000,000)
with the applicable issue price (as the relevant price is in each case lower than the fractional value of the shares of the Company (i.e.,
currently rounded EUR 6.0210 per share)).
Free
English translation - For information purposes only
Evolution
of the share capital(1)
| | |
Exercise price | |
| | |
EUR 2.3736 | | |
EUR 2.5133 | | |
EUR 2.9321 | |
| | |
Equivalent to
USD 2.5500 | | |
Equivalent to
USD 2.7000 | | |
Equivalent to
USD 3.1500 | |
| | |
| | |
| | |
| |
| Before the exercise of the 2024 Share Options | |
| | |
| | |
| |
| (A) Share capital (in EUR) | |
| 164,302,752.89 | | |
| 164,302,752.89 | | |
| 164,302,752.89 | |
| (B) Outstanding shares | |
| 27,288,093 | | |
| 27,288,093 | | |
| 27,288,093 | |
| (C) Fractional value (in EUR) (rounded) | |
| 6.0210 | | |
| 6.0210 | | |
| 6.0210 | |
| | |
| | | |
| | | |
| | |
| Exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Increase of share capital (in EUR) | |
| 4,747,277.30 | | |
| 5,026,528.90 | | |
| 5,864,283.72 | |
| (B) New shares to be issued upon exercise of the 2024 Share Options.. | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,000,000 | |
| | |
| | | |
| | | |
| | |
| After the exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Share capital (in EUR) | |
| 169,050,030.19 | | |
| 169,329,281.79 | | |
| 170,167,036.61 | |
| (B) Outstanding shares | |
| 29,288,093 | | |
| 29,288,093 | | |
| 29,288,093 | |
| (C) Fractional value (in EUR) (rounded) | |
| 5.7720
| (2) | |
| 5.7815
| (2) | |
| 5.8101 | (2) |
| (1) | This
simulation does not take into account the exercise or conversion of outstanding dilutive instruments. |
| (2) | In
such simulations, the respective exercise price would be below the fractional value of the existing shares of the Company (i.e., rounded
EUR 6.0210). Therefore, in accordance with article 7:178 of the Belgian Companies and Associations Code, after the exercise of the
2024 Share Options, all of the Company’s outstanding shares will have the same fractional value, i.e., rounded EUR 5.7720,
EUR 5.7815 and EUR 5.8101. |
| 6.3. | Participation
in the consolidated accounting net equity |
The
evolution of the consolidated accounting net equity of the Company as a result of the exercise of the 2024 Share Options is simulated
below.
The
simulation is based on the audited consolidated annual financial statements of the Company for the financial year ended on December 31,
2023 (which have been prepared in accordance with the International Financial Reporting Standards, as adopted by the European Union (“IFRS”)
and which have been submitted to the Company’s annual shareholders’ meeting for approval). The consolidated accounting net equity of
the Company as at December 31, 2023 amounted to EUR 6,709 (’000) (rounded) (i.e., USD 7,208 (’000) (rounded)), on the basis
of the Exchange Rate) or EUR 0.2459 (rounded) per share (based on 27,288,093 outstanding shares as at December 31, 2023). The simulation
does not take into account any changes in the consolidated accounting net equity since December 31, 2023.
For
further information on the Company’s net equity position on December 31, 2023, reference
is made to the financial statements of the Company, which are available on the Company’s website.
Based
on the assumptions set out above, as a result of the exercise of 2024 Share Options, without taking into account the other outstanding
dilutive instruments, the Company’s accounting net equity on a consolidated basis, would be increased as indicated below:
Free
English translation - For information purposes only
Evolution
of the consolidated accounting net equity
| | |
Exercise price | |
| | |
EUR 2.3736 | | |
EUR 2.5133 | | |
EUR 2.9321 | |
| | |
Equivalent to
USD 2.5500 | | |
Equivalent to
USD 2.7000 | | |
Equivalent to
USD 3.1500 | |
| | |
| | |
| | |
| |
| Consolidated net equity for FY 2023 | |
| | |
| | |
| |
| (A) Net equity (in EUR ’000) (rounded) | |
| 6,709 | | |
| 6,709 | | |
| 6,709 | |
| (B) Outstanding shares | |
| 27,288,093 | | |
| 27,288,093 | | |
| 27,288,093 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.2459 | | |
| 0.2459 | | |
| 0.2459 | |
| | |
| | | |
| | | |
| | |
| Exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Increase of net equity (in EUR ’000) (rounded) (1) | |
| 4,747 | | |
| 5,027 | | |
| 5,864 | |
| (B) New shares to be issued upon exercise of the 2024 Share Options | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,000,000 | |
| | |
| | | |
| | | |
| | |
| After exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Net equity (in EUR ’000) (rounded) | |
| 11,456 | | |
| 11,736 | | |
| 12,573 | |
| (B) Outstanding shares | |
| 29,288,093 | | |
| 29,288,093 | | |
| 29,288,093 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.3912 | | |
| 0.4007 | | |
| 0.4293 | |
| (1) | Consisting
of the amount of the capital increase and the amount of the increase of issue premium, as the case may be, but not reflecting that the
accounting of this amount may be subject to further adjustments pursuant to IFRS. |
The
table above demonstrates that the issuance of the 2,000,000 2024 Share Options and the subsequent exercise of all 2024 Share Options
will, from a pure accounting point of view, lead to an increase of the amount represented by each share in the consolidated accounting
net equity of the Company.
The
evolution of the market capitalisation as a result of the exercise of the 2024 Share Options is simulated below.
Subject
to the methodological reservations noted in paragraph 6.1, the table below reflects the impact of the exercise of the 2024 Share Options,
without taking into account the other outstanding dilutive instruments, on the market capitalisation and the resulting financial dilution
at various price levels, assuming the exercise of all 2,000,000 2024 Share Options and the subsequent issuance of 2,000,000 new shares
resulting from it.
After
close of trading on Nasdaq on May 8, 2024, the Company’s market capitalisation was USD 81,864,279.00, on the basis of a closing
price of USD 3.0000 per share. Assuming that, following the exercise of the 2024 Share Options, without taking into account the
other outstanding dilutive instruments, the market capitalisation increases exclusively with the funds raised on the basis of the parameters
set out above, the new market capitalisation would then be rounded, respectively, to USD 2.9693, USD 2.9795 and USD 3.0102
per share. This would represent a (theoretical) financial dilution of 1.02% and 0.68% and a (theoretical) financial accretion of 0.34%
per share, respectively.
Free
English translation - For information purposes only
Evolution
of the market capitalisation and financial dilution
| | |
Exercise price | |
| | |
EUR 2.3736 | | |
EUR 2.5133 | | |
EUR 2.9321 | |
| | |
Equivalent to
USD 2.5500 | | |
Equivalent to
USD 2.7000 | | |
Equivalent to
USD 3.1500 | |
| | |
| | |
| | |
| |
| Before the exercise of the 2024 Share Options(1) | |
| | |
| | |
| |
| (A) Market capitalisation (in USD) | |
| 81,864,279.00 | | |
| 81,864,279.00 | | |
| 81,864,279.00 | |
| (B) Outstanding shares | |
| 27,288,093 | | |
| 27,288,093 | | |
| 27,288,093 | |
| (C) Market capitalisation per share (in USD) | |
| 3.0000 | | |
| 3.0000 | | |
| 3.0000 | |
| | |
| | | |
| | | |
| | |
| Exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Funds raised (in USD) | |
| 5,100,000.00 | | |
| 5,400,000.00 | | |
| 6,300,000.00 | |
| (B) New shares to be issued upon exercise of the 2024 Share Options | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,000,000 | |
| | |
| | | |
| | | |
| | |
| After the exercise of the 2024 Share Options | |
| | | |
| | | |
| | |
| (A) Market capitalisation (in USD) | |
| 86,964,279.00 | | |
| 87,264,279.00 | | |
| 88,164,279.00 | |
| (B) Outstanding shares | |
| 29,288,093 | | |
| 29,288,093 | | |
| 29,288,093 | |
| (C) Market capitalisation per share (in USD) (rounded) | |
| 2.9693 | | |
| 2.9795 | | |
| 3.0102 | |
| | |
| | | |
| | | |
| | |
| Dilution/Accretion | |
| -1.02 | % | |
| -0.68 | % | |
| 0.34 | % |
| (1) | At
the date of this report and not taking into account the potential issuance of new shares pursuant to the exercise of other outstanding
dilutive instruments. |
| 6.5. | Other
financial consequences |
It
is expected that, in the context of the Company’s consolidated financial statements in accordance with the IFRS, the 2024 Share Options
will be accounted for in accordance with (among others) IFRS 2 (“Share-based payment”). The actual application of the reporting
standard, the timing of initial recognition and the valuation of the 2024 Share Options are still to be determined and assessed. The
actual amount will ultimately depend on the actual exercise price of the relevant 2024 Share Options.
For
a further discussion on the financial consequences of the proposed issuance of the 2024 Share Options and their subsequent exercise,
the board of directors refers to the report prepared in connection therewith by the statutory auditor of the Company.
* * *
[signature
page follows]
Done
on May 13, 2024.
Free English translation - For information purposes only
On
behalf of the board of directors,
| |
[SIGNED] |
|
|
[SIGNED] |
| By: |
|
|
By: |
|
| |
Director |
|
|
Director |
Free English translation - For information purposes only
ANNEX
A
2024
SHARE OPTION PLAN
Exhibit 99.8
Free English translation - For information purposes
only
Free English translation
This English version of the 2024 Share Option
Plan of MDxHealth SA is a free translation of the original French version. In case of discrepancies between the original French version
and this English version, the original French version shall prevail.
2024 SHARE OPTION PLAN
MDXHEALTH SA
MDxHealth SA • Rue d’Abhooz 31 - CAP
Business Center, 4040 Herstal, Belgium
www.mdxhealth.com • Tel (32) 4.257.70.21 •
Fax (32) 4.259.78.75
TVA BE 0479.292.440 RPM (Liège) • KBC
Bank 736-0304341-19
Free English translation - For information purposes
only
ARTICLE
1 – PURPOSE OF THE PLAN
This 2024 Share Option Plan (the “Plan”)
describes the general terms and conditions of the Share Options that the Company may grant to the Selected Participants.
The aim of the Plan is to realise the following
corporate and human resources goals:
| (i) | encourage, motivate and retain the Selected Participants; |
| (ii) | enable the Company and its Subsidiaries to attract and retain Personnel with the required experience and
skills; and |
| (iii) | link the interests of the Selected Participants closer to the interests of the shareholders of the Company
by giving them the opportunity to share in the increase of the value of the Company. |
ARTICLE
2 – DEFINITIONS AND INTERPRETATION
The following terms shall have the following meaning
for the purpose of the Plan:
| Belgian Companies and Associations Code |
the Belgian Companies and Associations Code of 23 March 2019 (as amended from time to time). |
| |
|
| Beneficiary |
With respect to a natural person, a person validly designated by the Selected Participant, being either the Selected Participant’s spouse, or the cohabiting partner, or legal heirs, in order to exercise the rights of the Selected Participant under the Plan after the death of the Selected Participant. Designation, revocation and re-designation of a Beneficiary must be done in writing in accordance with the applicable law. In the absence of any valid designation, the heirs of the Selected Participant in accordance with the applicable law of inheritance shall be deemed to be the Beneficiary. In the event that there are several heirs, all heirs acting jointly or one person designated by all heirs acting jointly shall be deemed to be the Beneficiary. |
| |
|
| Board of Directors |
The board of directors of the Company. |
| |
|
| Business Day |
A day on which banks are open for business in Belgium and the United States of America, excluding Saturdays and Sundays. |
| |
|
| Company |
MDxHealth SA, a company established under Belgian law, having its registered office at Rue d’Abhooz 31 - Cap Business Center, 4040 Herstal, Belgium, registered with the register of legal persons under number 0479.292.440. |
| |
|
| Control |
The possibility de facto or de jure to exercise a decisive influence over the appointment of the majority of the members of the Board of Directors or the general orientation of the Company’s governance, as determined in articles 1:14 and following of the Belgian Companies and Associations Code. |
Free English translation - For information purposes only
| Date of Grant |
The date on which the offer of the Share Options to a Selected Participant is made. |
| |
|
| Date of Issuance |
The date on which the Share Options will be issued pursuant to a resolution of an extraordinary general
shareholders’ meeting held on [Ÿ] 2024. |
| |
|
| Date of Termination of the Selected Participant’s Director’s mandate, employment agreement, management agreement or similar agreement |
The effective date of termination of the Selected Participant’s Director’s mandate, employment agreement, management agreement or similar agreement for whatever reason, with the exception of a termination of a management agreement immediately followed by the signing of an employment agreement, a new management agreement or a similar agreement with the Company or a Subsidiary, a termination of an employment agreement immediately followed by the signing of a new employment agreement, management agreement or similar agreement with the Company or a Subsidiary, and the termination of a Director’s mandate immediately followed by the re-appointment as Director. |
| |
|
| Director |
A member of the board of directors of the Company or a Subsidiary. |
| |
|
| Exercise Period |
The period during which the Selected Participant can exercise the Share Options granted to him/her, provided and to the extent that the Share Options are exercisable in accordance with the conditions set forth in the Plan and in any other arrangement that may exist between the Selected Participant and the Company. |
| |
|
| Exercise Price |
The price, determined by the Board of Directors, or any other committee created or person appointed by the Board of Directors in accordance with article 4, at which each Share subject to a Share Option may be acquired/subscribed for upon the exercise of that Share Option. |
| |
|
| Notification |
A written letter sent to the official domicile or registered office of the addressee by means of (i) a courier with notice of receipt, (ii) a registered letter or (iii) an e-mail sent to the addressee’s e-mail address. The date of the Notification is: (i) the date of signing for receipt, or (ii), in the absence thereof, the postmarked date of the registered letter, or (iii) the date of sending of the e-mail, provided that the e-mail was sent to the correct e-mail address of the addressee. |
| |
|
| Personnel |
An individual who is a member of the personnel of the Company or a Subsidiary as defined under article 1:27 of the Belgian Companies and Associations Code. |
| |
|
| Plan |
The present 2024 Share Option Plan. |
| |
|
| Selected Participant(s) |
Any Personnel to whom Share Options will be granted pursuant to, or under, this Plan. |
| |
|
| Share |
A share of the Company, representing the share capital of the Company. |
Free English translation - For information purposes only
| Share Option |
A subscription right issued by the Company entitling the Selected Participant to acquire/subscribe for one (1) Share pursuant to the Plan during a certain period at a certain price. |
| |
|
| Share Option Price |
The price, if any, which the Selected Participant owes to the Company for the acquisition of the Share Option itself. |
| |
|
| Subsidiary |
Any company or organization which is directly or indirectly under the Control of the Company. |
| |
|
| Transfer – Transferring |
Any transaction under living persons which has as its purpose the sale, acquisition, granting or accepting of options, exchange, waiver, contribution to a company, transfer in any manner whether or not for consideration, the giving of payment or pledge, or the acceptance of payment or pledge, or generally any agreement which has as its object an immediate or future transfer of title. |
| |
|
| Vested Share Options |
Share Options that have become definitely acquired by the Selected Participant in accordance with the conditions set forth in the Plan, without prejudice to the possibility that the Share Options become void in cases where they are not exercised or can no longer be exercised pursuant to Plan. |
Except insofar as the context otherwise requires,
(i) words denoting the singular shall include the plural and vice versa and (ii) words denoting the masculine gender shall include
the feminine gender and vice versa.
ARTICLE
3 - TYPE AND NUMBER OF Share OPTIONS
The total number of Share Options issued under
the Plan is of two million (2,000,000). All of such Share Options may be incentive stock options within the meaning of Section 422 of
the U.S. Internal Revenue Code of 1986, as amended. Only Personnel who are employees subject to U.S. taxation as of the applicable Date
of Grant are eligible to receive such incentive stock options.
Each Share Option
shall entitle a Selected Participant to acquire one (1) Share.
The new Shares to be issued at the occasion of
the exercise of the Share Options shall have the same rights and benefits as, and rank pari passu in all respects, including with
respect to entitlements to distributions and dividends, with the existing and outstanding Shares of the Company at the time of their issuance.
They will be entitled to dividends and other distributions in respect of which the relevant record date or due date falls on or after
the date of issue of the new Shares.
A new Share shall represent the same fraction
of the capital of the Company as the other outstanding Shares of the Company at that moment.
ARTICLE
4 - ADMINISTRATION
The Board of Directors shall administer the Plan.
The Board of Directors shall have the possibility to delegate its powers or certain of its powers to certain persons of the management
and/or to certain committees that may be established by the Board of Directors, in compliance with the Belgian Companies and Associations
Code and the Company’s internal governance rules.
Free English translation - For information purposes only
Subject to the provisions of the Plan and in as
far as the decisions are in line with the purpose of the Plan, the Board of Directors, or any other committee created or person appointed
by the Board of Directors, is entitled to determine, define and interpret all rules, regulations or other measures required or desirable
for the administration of the Plan. The Board of Directors may terminate the Plan at any time. Share Options granted prior to such termination
shall remain valid and exercisable in accordance with the Plan.
ARTICLE
5 - CONDITIONS OF THE Share OPTIONS
5.1 Share
Option Price
Except where the Board of Directors, or any other
committee created or person appointed by the Board of Directors in accordance with article 4, decides otherwise, on a one to one basis,
the Selected Participant shall owe no Share Option Price to the Company upon subscription for, or acceptance of, the Share Options.
Should a Share Option Price be due, it would be
recorded as an issue premium. This issue premium would be booked as a liability on the Company’s balance sheet under its equity, and the
account to which the issue premium would be booked would serve, in the same way as the share capital, as a guarantee for third parties,
and may only be reduced on the basis of a valid resolution of the general shareholders’ meeting passed in the manner required for an amendment
to the Company’s articles of association.
5.2 Exercise
Price
The Exercise Price of a Share Option shall be
determined by the Board of Directors, or any other committee created or person appointed by the Board of Directors in accordance with
article 4, on the Date of the Grant thereof. Unless determined otherwise by the Board of Directors, or any other committee created or
person appointed by the Board of Directors in accordance with article 4, prior to, at, or after the Date of Grant, the Exercise Price
shall not be lower than the lower of (i) the price of the Shares on the stock market on which the Shares are listed and traded on the
day prior to the Date of Grant (should the Shares or securities be listed on the Nasdaq, the Nasdaq must be used as market of reference),
and (ii) the average price of the Shares on the relevant stock market on which the Shares are listed and traded during the period of 30
days preceding the Date of Grant of the relevant Share Option (should the Shares or securities be listed on the Nasdaq, the Nasdaq must
be used as market of reference).
Upon exercise of Share Options and issue of new
shares, the aggregate amount of the Exercise Price of the Share Options will be allocated the share capital of the Company. To the extent
that the amount of the Exercise Price of the Share Option, per Share to be issued upon exercise of the Share Option, would exceed the
fractional value of the then existing shares of the Company existing immediately prior to the issue of the new Shares concerned, a part
of the Exercise Price, per Share to be issued upon exercise of the Share Option equal to such fractional value shall be booked as share
capital, whereby the balance shall be booked as issue premium. In accordance with article 7:178 of the Belgian Companies and Associations
Code, following the capital increase and issuance of new Shares, each new and existing Share shall represent the same fraction of the
share capital of the Company.
Free English translation - For information
purposes only
Upon exercise of Share Options:
| ● | should the Company’s share capital be expressed in euro currency
and the aggregate amount of the Exercise Price of such Share Options exercise be paid by the relevant Selected Participant (or its Beneficiary,
as the case may be) in US dollars, the amount equal to the relevant aggregate Exercise Price for such Share Options exercise shall be
converted into euro on the basis of the relevant USD/EUR exchange ratio as shall be published by the European Central Bank (“ECB”)
on https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html (or such other relevant
website of the ECB) (the “Exchange Rate”) on the second Business Day preceding the date of the relevant notarial deed
in which the issuance of the relevant new Shares and the corresponding capital increase are established, and whereby the final amount
in euro will be rounded down to the nearest two decimals; and |
| ● | should the Company’s share capital be expressed in US dollar
currency and the aggregate amount of the Exercise Price of such Share Options exercise be paid by the relevant Selected Participant (or
its Beneficiary, as the case may be) in euro, the amount equal to the relevant aggregate Exercise Price for such Share Options exercise
shall be converted into US dollar on the basis of the relevant USD/EUR exchange ratio as shall be published by the ECB on https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html
(or such other relevant website of the ECB) (the “Exchange Rate”) on the second Business Day preceding the date of the
relevant notarial deed in which the issuance of the relevant new Shares and the corresponding capital increase are established, and whereby
the final amount in US dollar will be rounded down to the nearest two decimals. |
5.3
Term (duration) of the Share Options
The duration of a Share Option shall be ten (10)
years as of their Date of Issuance. However, the Board of Directors, or any other committee created or person appointed by the Board of
Directors in accordance with article 4, shall have the right to shorten this term. Unless a shorter term is provided by the Board of Directors,
or any other committee created or person appointed by the Board of Directors in accordance with article 4, a Share Option is therefore
(in any event) automatically null, void and of no value at 24:00 (midnight) CET on the tenth (10th) anniversary date of the Date of Issuance.
5.4 Registered
nature
The Share Options are and shall remain registered,
and shall be entered in the register of subscription right holders that shall be held at the registered office of the Company. The Company
shall deliver to each Selected Participant and Beneficiary, free of charge, a certificate confirming that the Participant or Beneficiary
is duly registered in the register of subscription right holders as owner of the Share Options.
5.5
Rights as a shareholder
The Selected Participant (in the Selected Participant’s
capacity as holder of a Share Option) is not a shareholder of the Company, nor shall the Selected Participant have any rights or privileges,
which as a rule belong to a shareholder of the Company, as long as the Share Options held by the Selected Participant have not been exercised.
ARTICLE
6 – TRANSFER OF THE Share OPTIONS
6.1 Decease
In case the holder of a Share Option is a natural
person, the following will apply: in the event of the decease of a Selected Participant, all Share Options (including the Vested Share
Options at the time of decease) shall be transferred to the Beneficiary of the Selected Participant and shall be (or remain as far as
the Vested Share Options are concerned) exercisable at the time and under the terms established in this Plan.
Free English translation - For information
purposes only
6.2 Transferability
of the Share Options
Except for the transfer contemplated under article
6.1 above and except if the Board of Directors, or any other committee created or person appointed by the Board of Directors in accordance
with article 4, were to allow a Transfer of the Share Options, the Share Options cannot be Transferred by a Selected Participant once
they have been granted to a Selected Participant.
ARTICLE
7 - EXERCISE OF THE Share OPTIONS
Share Options can only be exercised during an
Exercise Period (as specified in article 7.2 below) provided and to the extent that they have become Vested Share Options and have become
exercisable (in accordance with article 7.1 below) prior to or during a certain Exercise Period.
7.1 Vesting
and exercisability of the Share Options
The vesting schedule of a Share Option, i.e.
the dates and conditions upon which it shall become a Vested Share Option, shall be as set forth in this Plan, except where, for Share
Options granted to Selected Participants in any capacity other than the capacity of non-executive director of the Company, the Board of
Directors, or any other committee created or person appointed by the Board of Directors in accordance with article 4, determines otherwise
and, for Share Options granted to Selected Participants in their capacity of non-executive director of the Company, the general shareholders’
meeting determines otherwise. The vesting schedule and the period before a Share Option can become exercisable can therefore be shorter
than the periods as referred to below in this article 7.1.
7.1.1 General
vesting mechanism of the Share Options
Unless otherwise determined by the Board of Directors,
or any other committee created or person appointed by the Board of Directors in accordance with article 4, the Share Options subscribed
for by a Selected Participant in any capacity other than the capacity of non-executive director of the Company shall vest, i.e.
become Vested Share Options, in installments of twenty-five percent (25%) per year during a period of four (4) years as of the Date of
Grant, as follows:
| ● | on the first anniversary date of the Date of Grant: 25%; |
| ● | during the second year from the Date of Grant: maximum 25%,
i.e. maximum 50% in total over the first two years after the Date of Grant; |
| ● | during the third year from the Date of Grant: maximum 25%,
i.e. maximum 75% in total over the first three years after the Date of Grant; |
| ● | as from the fourth year from the Date of Grant: 25%, i.e.
maximum 100% in total over the first four years after the Date of Grant. |
During the second, the third, and the fourth years
after the Date of Grant, the Share Options subscribed for by a Selected Participant in any capacity other than the capacity of non-executive
director of the Company shall vest pro rata temporis on a quarterly basis, i.e. for a number that bears the same proportion
to the maximum number of Share Options that can vest during that period as the number of (full) quarters that have passed during said
given period bears to the total number of quarters of that period. For example, one year and seven months after the Date of Grant, a maximum
of 37.5% of the Share Options granted to a Selected Participant could be Vested Share Options.
Free English translation
- For information purposes only
The Share Options granted to a non-executive director
of the Company shall all vest, i.e. become Vested Share Options, on the date of the ordinary shareholders’ meeting that takes place in
the calendar year following the calendar year where the Share Options were granted, provided that on the date preceding the date of the
former ordinary shareholders’ meeting the mandate of such non-executive director of the Company has not terminated (without prejudice
to section 7.1.3 of the Plan).
Notwithstanding the foregoing, all Share Options
subscribed for by a Selected Participant shall automatically vest (if not yet vested) and become Vested Share Options in the event of
a change of Control over the Company. A change of Control shall be deemed to have occurred if (i) any “person” or “group”
(within the meaning of Rule 13d-5 of the U.S. Securities Exchange Act of 1934, as amended), shall own, directly or indirectly, beneficially
or of record, determined on a fully diluted basis, more than 35% of the securities or interests of any class or kind ordinarily having
the power to vote for the election of Directors of the Company, (ii) a majority of the mandates (other than vacant mandates) on the Board
of Directors of the Company shall be taken by persons whose nomination as Director (A) was not proposed to the general shareholders’
meeting of the Company by (a majority of) the Board of Directors of the Company, or (B) was not supported or approved by (a majority
of) the Board of Directors of the Company, or (iii) any person acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person) assets from the Company that have a total gross fair market value equal to or
more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition
or acquisitions; provided, however, that the following will not constitute a change in the ownership of a substantial portion of the Company’s
assets: (A) a transfer of assets to an entity that is directly or indirectly controlled by the Company’s shareholders immediately
after the transfer, or (B) a transfer of assets by the Company to: (1) a shareholder of the Company (immediately before the asset transfer)
in exchange for or with respect to the Company’s shares, (2) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company, or (3) a person that owns, directly or indirectly, fifty percent (50%)
or more of the total value or voting power of all the outstanding shares of the Company. For purposes of the foregoing, gross fair market
value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets.
7.1.2 Exercisability
of the Share Options
The Selected Participants are allowed to exercise
any Vested Share Options during any Exercise Period as of and from the moment where such Share Options became Vested Share Options. The
rules set forth in section 7.1.3. below however prevail over the rules set forth in this section 7.1.2.
7.1.3 Consequences of termination of a Director’s mandate, employment agreement, management agreement or similar agreement
Without prejudice to the provisions of the following
paragraphs and unless otherwise determined by the Board of Directors, or any other committee created or person appointed by the Board
of Directors in accordance with article 4, when (i) the Director’s mandate of a Selected Participant is terminated for other reasons than
for breach of his/her duties as a Director, (ii) the employment agreement of a Selected Participant is terminated for other reason than
for serious cause, or (iii) management or similar agreement of the Selected Participant is terminated for other reasons than breach of
said agreement, in each such case the Selected Participant may exercise all his/her Share Options that have become Vested Share Options
at the Date of Termination of the Selected Participant’s Director’s mandate, employment agreement, management agreement or similar agreement,
as relevant, at the time and in accordance with the conditions set forth in the Plan, within a period of one year as from the Date of
Termination of the Director’s mandate, employment agreement, management agreement or similar agreement.
Free English translation - For information
purposes only
Unless otherwise determined by the Board of Directors,
or any other committee created or person appointed by the Board of Directors in accordance with article 4, the Vested Share Options that
are not exercised within the period referred to in the previous paragraph shall automatically lapse and become null and void. The Share
Options that have not become Vested Share Options at the Date of Termination of the Selected Participant’s Director’s mandate, employment
agreement, management agreement or similar agreement, as relevant, automatically lapse and become null and void.
Upon termination of (i) the Director’s mandate
of the Selected Participant for breach of his/her duties as a Director, (ii) the employment agreement of the Selected Participant for
serious cause, or (iii) management or similar agreement of the Selected Participant for breach of said agreement, all Share Options granted
to the Selected Participant shall, unless determined otherwise by the Board of Directors, or any other committee created or person appointed
by the Board of Directors in accordance with article 4, whether vested or not, automatically become definitely non-exercisable as from
the Date of Termination of the Selected Participant’s Director’s mandate, employment agreement, management agreement or similar agreement,
as relevant.
7.1.4 Consequences
of legal retirement, disability or serious disease
In case the holder of a Share Option is a natural
person, the following will apply: in the event of termination of the Director’s mandate, employment agreement, management agreement or
similar agreement of the Selected Participant, as relevant, as a consequence of legal retirement, disability or serious disease, the (at
that time) Vested Share Options shall remain exercisable for the remaining term of the Share Options pursuant to the terms and conditions
set forth in the Plan.
7.2 Exercise
Period
Vested Share Options can only be exercised during
the following periods: during the term of the Share Options, between 1 March and 31 March, and between 1 September and 30 September. Each
Exercise Period shall close on the last Business Day of the particular Exercise Period.
The Board of Directors, or any other committee
created or person appointed by the Board of Directors in accordance with article 4, may, however, in its absolute discretion, provide
for additional Exercise Periods and do so for instance in case of a change of Control over the Company (e.g. in case all Share
Options automatically vest in accordance with 7.1.1 in fine above).
7.3 Partial
exercise
A Selected Participant may exercise all or part
of his/her Vested Share Options. However, it is not possible to exercise a Share Option with respect to fractions of Shares.
7.4 Exercise
procedure
A Share Option shall be deemed to have been exercised
upon receipt by the Company, at the latest on the last Business Day of the Exercise Period, of:
| (i) | a Notification signed by the Selected Participant and stating that a Share Option or a specified number
of Share Options is exercised; |
| (ii) | evidence of complete payment of the Exercise Price, within thirty (30) calendar days following the last
Business Day of the Exercise Period in which the Share Options were exercised, for the number of Shares as indicated in the Notification
provided sub (i), by bank transfer to a blocked account of the Company whose number is communicated by the Company; |
Free English
translation - For information purposes only
| (iii) | in the event that a Share Option is exercised by a person or persons other than the Selected Participant,
suitable proof of the right of this person or these persons to exercise the Share Option; and |
| (iv) | Any and all statements and documents, which the Board of Directors, or any other committee created or
person appointed by the Board of Directors in accordance with article 4, deems desirable or necessary in order to comply with all applicable
legal and regulatory provisions, and the submission of which the Board of Directors, or any other committee created or person appointed
by the Board of Directors in accordance with article 4, consequently requests. |
7.5 Conditions
for the issuance of Shares
| 7.5.1 | The Company shall only be obliged to issue the Shares as a result of the exercise of the Share Options,
by registration in the Company’s share register or any other manner prescribed by the Belgian Companies and Associations Code, after all
of the preceding conditions set forth in article 7.4 have been fulfilled and following the completion of the capital increase mentioned
below. |
| 7.5.2 | The Board of Directors, or one member thereof or any other person specifically delegated for such purpose,
shall, in accordance with article 7:187 of the Belgian Companies and Associations Code (or any other provision having the same purport),
have the capital increase resulting from the exercise of the Share Options, and the fully paid in Shares thus subscribed for, recorded
before a notary public within sixty (60) days after the closing of the Exercise Period in which the Share Options were exercised. |
| 7.5.3 | If, at the time of exercise of the Share Options, the Shares are admitted to listing and/or trading on
the Nasdaq, another stock market or another trading platform, the Company shall use reasonable efforts in order to take such actions and
make such filings as shall be necessary to have the Shares that are issued upon exercise of the relevant Share Options admitted to listing
and/or trading on the Nasdaq, such other stock market or such other trading platform under the timeline as shall be decided by the Board
of Directors. |
| 7.5.4. | The Company may at its discretion postpone the delivery of the Shares, if this is necessary in order to
comply with the applicable regulations or provisions of whatever nature, including but not limited to public offer, registration and other
obligations with respect to the Shares of the Company, as the Company deems appropriate. |
ARTICLE
8 – CHANGE IN THE CAPITAL STRUCTURE OF THE COMPANY – EXERCISE OF THE Share OPTIONS BY VIRTUE OF LAW
8.1 Change
in the capital structure of the Company
Contrary to article 7:71 of the Belgian Companies
and Associations Code, the Company explicitly reserves the right to take all possible decisions and to enter into all possible transactions
that may have an impact on its capital, on the distribution of profits or on the distribution of liquidation proceeds or that may otherwise
affect the rights of the Selected Participants.
Should the rights of the Selected Participant
be affected by such decision or transaction, then the Selected Participant shall not be entitled to a change of the Exercise Price, a
change of the exercise conditions or any other form of (financial or other) compensation, unless such a decision or transaction would
have as its main purpose to prejudice the rights of the holders of the Share Options.
In case of a merger, de-merger or share split
of the Company, the rights attached to the outstanding Share Options and/or Exercise Price of the Share Options, shall be adapted in accordance
with the conversion ratios applied at the occasion of the merger, de-merger or share split to the other shareholders.
Free English translation - For information
purposes only
8.2 Exercise
of the Share Options by virtue of law
If a Share Option which is not exercisable or
which cannot be exercised pursuant to the issuance conditions (as determined in this Plan) becomes prematurely exercisable on the basis
of article 7:71 of the Belgian Companies and Associations Code and is also exercised pursuant to said article, the Shares obtained by
exercising the Share Option shall not be transferable, unless explicitly agreed upon by the Board of Directors, or any other committee
created or person appointed by the Board of Directors in accordance with article 4, until the time the underlying Share Options would
have become exercisable in accordance with the Plan.
ARTICLE
9 – MISCELLANEOUS
9.1 Taxes
and social security
The Company or a Subsidiary shall be entitled,
in accordance with the applicable law or practice, to withhold from any cash payment made to a Selected Participant, and/or the Selected
Participant shall be obliged to pay to the Company or to a Subsidiary (if requested for by the Company or a Subsidiary), the amount of
any tax and/or social security contributions, if any, attributable to or payable in connection with the grant, vesting or exercise of
any Share Options or attributable to or payable in connection with the delivery of the Shares.
The Company or a Subsidiary shall also be entitled,
in accordance with the applicable law or practice, to make the necessary reporting, required as a result of the grant of Share Options,
their vesting, their exercisability or the delivery of the Shares.
9.2 Costs
Stamp duties and other similar duties or taxes
levied upon exercise of the Share Options and/or the delivery of the new Shares shall be borne by the Selected Participant.
Costs related to the capital increase that shall
take place upon the exercise of the Share Options shall be borne by the Company.
9.3 Applicable
law and competent courts
Belgian law governs the Plan. Disputes shall fall
under the exclusive jurisdiction of the courts and tribunal of the jurisdiction where the Company has its registered office.
Share Options subscribed for in the framework
of this Plan shall be governed by and construed in accordance with the laws of Belgium.
9.4 Notifications
Each Notification to a Selected Participant shall
be made to the address mentioned in the register of subscription rights holders or the relevant notice details as set out in the agreement
between the Company and the Selected Participant pursuant to which the Share Options were granted. Each Notification to the Company, a
Subsidiary or the Board of Directors, or any other committee created or person appointed by the Board of Directors in accordance with
article 4, shall be validly made to the address of the registered office of the Company. Address changes must be communicated in accordance
with this provision.
9.5 Relation
to Selected Participant’s agreement
Notwithstanding any provision of the plan, the
rights and obligations of a Selected Participant as determined under the terms of the Selected Participant’s employment agreement or management
agreement or similar agreement with the Company or any Subsidiary shall not be affected by the Selected Participant’s participation in
the Plan or by any right that the Selected Participant may have to participate therein. A Selected Participant who subscribes for Share
Options pursuant to the Plan shall have no rights to compensation or damages in consequence of the termination of the Selected Participant’s
employment agreement, or management agreement or similar agreement with the Company or a Subsidiary for any reason whatsoever, insofar
as those rights arise or may arise from the termination of the rights which the Selected Participant would have or of the claims which
the Selected Participant could make relating to the exercise of the Share Options under the Plan as a result of the termination of such
Selected Participant’s employment agreement, or management agreement or similar agreement, or from the loss or reduction in value of the
rights or advantages.
11
Exhibit 99.9
English translation - For information purposes
only
MDXHEALTH
Limited Liability Company
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal
Belgium
Registered with the Register of Legal Persons
VAT BE 0479.292.440 (RLP Liège, division Liège)
Report
of the Board of Directors
in
accordance with ARTICLES 7:180, 7:191 and 7:193 of the Belgian
Companies AND ASSOCIATIONS Code
On August 2, 2022, MDxHealth SA (the
“Company”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Genomic Health,
Inc. (a subsidiary of Exact Sciences Corporation referred to herein as “Exact Sciences”), pursuant to which among other
things and subject to the terms and conditions included in the Asset Purchase Agreement, Exact Sciences agreed to sell and assign, and
the Company agreed to purchase and assume, the business of developing, marketing and performing the Oncotype DX Genomic Prostate Score
test (the “GPS Test Business”), in consideration of (i) a cash consideration of USD 24,999,999.64, (ii) the Initial
Earn-Out Consideration (as defined below), and (iii) the First Closing Equity Consideration (as defined below).
On August 23, 2023, the Company and
Exact Sciences entered into an amendment to the Asset Purchase Agreement (as further amended on October 9, 2023, the “Amendment”),
pursuant to which they agreed to defer the payment of the Initial Earn-Out Consideration, in consideration of (i) the increase and replacement
of the Initial Earn-Out Consideration by the Amended Earn-Out Consideration (as defined below), (ii) a cash consideration of USD 250,000,
(iii) the Second Closing Equity Consideration (as defined below) and (iv) the commitment by the Company to issue to the benefit of Exact
Sciences 1,000,000 new subscription rights for new shares of the Company (each exercisable for 1 new share of the Company) with a term
until August 22, 2028, (the “Exact Sciences Warrants”).
In this context, the board of directors
submits to the extraordinary general shareholders’ meeting of the Company convened on May 30, 2024 (or at any other subsequent date, should
the legally required attendance quorum not be met at such meeting) (the “EGM”) the proposal to issue 1,000,000 Exact
Sciences Warrants under the conditions described below in this report, and to dis-apply, in the interest of the Company, the statutory
preferential subscription right of the existing shareholders of the Company and, to the extent necessary, of the Company’s existing holders
of subscription rights (share options), to the benefit of Exact Sciences, as provided for in the Amendment (the proposed issuance of the
Exact Sciences Warrants, the “Transaction”).
Shareholders should note that the Exact
Sciences Warrants are complex instruments and that Exact Sciences could benefit from a significant discount when subscribing for new shares
by virtue of the potential exercise of the Exact Sciences Warrants, as described below.
English translation - For information purposes
only
The Exact Sciences Warrants are subscription
rights within the meaning of articles 7:67 et seq. of the Belgian Companies and Associations Code of 23 March 2019 (as amended from time
to time) (the “Belgian Companies and Associations Code”).
For the purposes of the Transaction,
this report has been prepared by the board of directors of the Company, in accordance with articles 7:180, 7:191 and 7:193 of the Belgian
Companies and Associations Code, in connection with the proposal of the board of directors to issue the Exact Sciences Warrants and to
dis-apply, in the interest of the Company, the statutory preferential subscription right of the existing shareholders of the Company and,
to the extent necessary, of the Company’s existing holders of subscription rights (share options), to the benefit of Exact Sciences.
In accordance with article 7:180 of
the Belgian Companies and Associations Code, the board of directors provides in this report a justification of the proposed Transaction,
including a justification of the proposed exercise price of the Exact Sciences Warrants, and a description of the consequences of the
proposed Transaction for the financial and shareholder rights of the shareholders of the Company.
In accordance with article 7:191 of
the Belgian Companies and Associations Code, the board of directors also provides in this report a justification of the proposal to dis-apply,
in the interest of the Company, the statutory preferential subscription right of the existing shareholders of the Company and, to the
extent necessary, of the Company’s existing holders of subscription rights (share options) in connection with the capital increase proposed
in the Transaction and a description of the consequences thereof for the financial and shareholder rights of the shareholders of the Company.
In accordance with article 7:193 of
the Belgian Companies and Associations Code, the justification of the proposed Transaction and the proposed exercise price of the Exact
Sciences Warrants shall take into account in particular the financial situation of the Company, the identity of Exact Sciences and the
nature and size of Exact Sciences’ contribution.
This report must be read together with
the report prepared in accordance with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations Code by the Company’s
statutory auditor, BDO Réviseurs d’Entreprises SRL, a limited liability company organised and existing under the laws of Belgium,
with registered office at Da Vincilaan 9, 1930 Zaventem, Belgium, represented by Mr. Bert Kegels.
| 2.1. | Asset Purchase Agreement and Amendment |
Founded in February 1995, Exact Sciences
is a leading, global, advanced cancer diagnostics company, listed on Nasdaq, which has developed some of the most impactful tests in cancer
diagnostics.
On August 2, 2022, the Company and Exact
Sciences entered into the Asset Purchase Agreement, pursuant to which, subject to its terms and conditions, Exact Sciences agreed to sell
and assign, and the Company agreed to purchase and assume, the GPS Test Business for an aggregate purchase price of up to USD 100,000,000.00.
Pursuant to the Asset Purchase Agreement, the aggregate purchase price was (to be) paid as follows:
| (a) | Cash consideration: An amount of USD 24,999,999.64 was paid on the date of the Asset Purchase
Agreement. |
English translation - For information purposes
only
| (b) | First Closing Equity Consideration: An amount of USD 5,000,000.36, which remained outstanding
as a payable (without accruing interest) due by the Company as from the date of the Asset Purchase Agreement, was contributed in kind
on August 11, 2022, by Exact Sciences to the Company within the context of a capital increase by the Company within the framework of the
authorised capital of the Company against the issuance by the Company of 6,911,710 new shares at an issue price of EUR 0.7056 (the
“First Closing Equity Consideration”). The aggregate number of Company’s shares held by Exact Sciences was not to exceed
more than 5% of the outstanding shares of the Company. |
| (c) | Initial Earn-Out Consideration: Following the signing of the Asset Purchase Agreement, an additional
aggregate earn-out amount of up to USD 70,000,000.00 was to be paid by the Company to Exact Sciences upon achievement of certain
revenue milestones related to fiscal years 2023 through 2025, with the maximum earn-out payable in relation to 2023 and 2024 not to exceed
USD 30,000,000.00 and USD 40,000,000.00, respectively (the “Initial Earn-Out Consideration”). At the option
of the Company, amounts reflecting the Initial Earn-Out Consideration could be settled in cash or through the issuance of additional shares
of the Company by contribution in kind (at an issue price per share valued in function of a volume weighted average trading price of the
Company’s shares at the end of the relevant earn-out period), provided that the aggregate number of shares held by Exact Sciences was
not to exceed more than 5% of the outstanding shares of the Company. |
Subsequently, in order to defer the
payment of the Initial Earn-Out Consideration, On August 23, 2023, the Company and Exact Sciences entered into the Amendment, the main
terms of which can be summarised as follows:
| (a) | Deferment of payments under the earn-out consideration provided by the Asset Purchase Agreement:
Pursuant to the Amendment, and subject to its terms and conditions, Exact Sciences agreed to defer the payment of the Initial Earn-Out
Consideration due by the Company under the Asset Purchase Agreement by 3 years, from 2024 to 2027. |
| (b) | Consideration of payments deferment: In consideration of such payments deferment, the Company agreed
to the following: |
| (i) | Cash consideration: An amount of USD 250,000.00 was paid by the Company on the date of the
Amendment. |
| (ii) | Second Closing Equity Consideration: An amount of USD 877,500.00 which remained outstanding
as a payable (without accruing interest) due by the Company as from the date of the Amendment, was contributed in kind on October 20,
2023, by Exact Sciences to the Company within the context of a capital increase by the Company within the framework of the authorised
capital of the Company against the issuance by the Company of 2,500,000 new shares at an issue price of EUR 0.3324 (the “Second
Closing Equity Consideration”). It was also agreed that the aggregate number of Company’s shares held by Exact Sciences shall
not exceed more than 7.5% of the outstanding shares of the Company (compared to 5% previously, under the Asset Purchase Agreement). |
English translation - For information purposes
only
| (iii) | Amended Earn-Out Consideration: The Initial Earn-out Consideration was increased and replaced by
an additional aggregate earn-out amount of up to USD 82,500,000.00 to be paid by the Company to Exact Sciences upon achievement of
certain revenue milestones related to fiscal years 2023 through 2025, with the maximum earn-out payable in relation to 2023 and 2024 not
to exceed USD 30,000,000.00 plus USD 10,000,000 (or such lesser amount if the maximum earn-out amount required to be paid exceeds
USD 82,500,000.00 in the aggregate) and USD 40,000,000.00, respectively (the “Amended Earn-Out Consideration”).
At the option of the Company, amounts reflecting the Amended Earn-Out Consideration can be settled in cash or through the issuance of
additional shares of the Company by contribution in kind (at an issue price per share valued in function of a volume weighted average
trading price of the Company’s shares at the end of the relevant earn-out period) to be delivered to Exact Sciences, provided that the
aggregate number of shares held by Exact Sciences shall not exceed more than 7.5% of the outstanding shares of the Company (compared to
5% previously, under the Asset Purchase Agreement). |
| (iv) | Exact Sciences Warrants: Pursuant to the Amendment, the Company has committed to issue, to the
benefit of Exact Sciences, 1,000,000 new subscription rights for new shares of the Company (each exercisable for 1 new share of the Company)
with a term until August 22, 2028, such issuance having to be submitted for approval by an extraordinary general shareholders’ meeting
of the Company to be convened (which is the reason why the present report has been prepared). The principal terms and conditions of the
Exact Sciences Warrants are summarized in paragraph 3.1 below. |
| 2.2. | Proposed issuance of the Exact Sciences Warrants |
As indicated above,
in the context of the Amendment, the Company has undertaken to Exact Sciences to issue the Exact Sciences Warrants to the benefit of Exact
Sciences. In view hereof, the board of directors of the Company has undertaken to propose to the shareholders of the Company, in the context
of the EGM, to approve the issuance by the Company, to the benefit of Exact Sciences, of the Exact Sciences Warrants.
The Company and Exact
Sciences have agreed that the issuance of the Exact Sciences Warrants to Exact Sciences was essential for Exact Sciences to agree to the
deferment of the payment of the Initial Earn-Out Consideration. Furthermore, in the event that the EGM does not approve the proposed issuance
of the Exact Sciences Warrants, the Company may be in breach of its obligations under the Amendment.
| 3.1. | Terms and Conditions of the Exact Sciences Warrants |
The draft terms and conditions of the
Exact Sciences Warrants are set out in Annex A to this report of the board of directors (the “Exact Sciences Warrants Terms
and Conditions”). The principal terms and conditions of the Exact Sciences Warrants can, for information purposes, be summarised
as follows:
| ● | Issuer: The Company (MDxHealth SA). |
| ● | Right to subscribe for one ordinary share: Each subscription right entitles the holder to subscribe
for one (1) ordinary share to be issued by the Company. |
| ● | Exercise price: The exercise price of the Exact Sciences Warrants (i.e., the price to be
paid in cash to subscribe for one new share in the Company when an Exact Sciences Warrant is exercised) will be USD 5.265. |
| ● | Term: The Exact Sciences Warrants will have a term starting as from their issuance and ending on
(and including) August 22, 2028. |
English translation - For information purposes
only
| ● | Exercisability: The exercise of the Exact Sciences Warrants will be subject to the terms and conditions
contained in the Exact Sciences Warrants Terms and Conditions. The Exact Sciences Warrants may be exercised as from their issuance and
until the end of their term, provided that a number of Exact Sciences Warrants with an aggregate exercise price of at least USD 250,000
are exercised by the holder thereof. |
| ● | Nature of the shares issued upon exercise: Each Exact Sciences Warrant will entitle its holder
to subscribe for one new share to be issued by the Company. The new shares to be issued upon exercise of the Exact Sciences Warrants shall
have the same rights and benefits as, and rank pari passu in all respects including as to entitlement to dividends and other distributions,
with the existing and outstanding shares of the Company at the moment of their issuance and will be entitled to dividends and other distributions
in respect of which the relevant record date or due date falls on or after the date of their issuance. |
| ● | Increase of the share capital and allocation of the exercise price: Upon exercise of Exact Sciences
Warrant and issue of new shares, the aggregate amount of the exercise price of the Exact Sciences Warrants will be allocated to (as
the case may be, following conversion into the Company’s share capital currency, on the basis of the relevant USD/EUR exchange ratio as
shall be published by the European Central Bank (“ECB”), as provided for in in section 5.4 of the Exact Sciences
Warrants Terms and Conditions) the share capital of the Company. To the extent that the amount
of the exercise price of the Exact Sciences Warrants, per share to be issued upon exercise of the Exact Sciences Warrants, exceeds the
fractional value of the then existing shares of the Company existing immediately prior to the issue of the new shares concerned, a part
of the exercise price, per share to be issued upon exercise of the Exact Sciences Warrants, equal to such fractional value shall be booked
as share capital, whereby the balance shall be booked as issue premium. Following the capital increase and issuance of new shares, each
new and existing share shall represent the same fraction of the share capital of the Company. |
| ● | Admission to listing and trading of the underlying shares: The new shares to be issued following
the exercise of the Exact Sciences Warrants will be admitted to listing and trading on any principal stock exchange or other trading platform
on which the Company’s other shares are then admitted to listing and trading. To this end, the Company will make the necessary filings
and applications. |
| ● | Transferability: Except if the Company
were to explicitly allow a transfer of the Exact Sciences Warrants, the
Exact Sciences Warrants cannot be transferred by the holder. Furthermore,
the Exact Sciences Warrants will not be admitted to listing or trading. |
| ● | Form: The Exact Sciences Warrants will be issued in registered form and cannot be dematerialised. |
| 3.2. | Dis-application of the statutory preferential subscription right of existing shareholders |
In the context of the proposed Transaction,
the board of directors proposes to the EGM to dis-apply the statutory preferential subscription right of the Company’s existing shareholders
and, to the extent necessary, of the Company’s existing holders of subscription rights (share options), in accordance with article 7:193
of the Belgian Companies and Associations Code, to the benefit of Exact Sciences
English translation - For information purposes
only
Exact Sciences is not a member of the
Company’s personnel within the meaning of article 1:27 of the Belgian Companies and Associations Code.
The dis-application of the statutory
preferential subscription right of the existing shareholders and, to the extent necessary, of the Company’s existing holders of subscription
rights (share options), is necessary in order to allow the Company to issue the Exact Sciences Warrants, as agreed in the Amendment.
As indicated above, the Exact Sciences
Warrants, may be exercised at an exercise price of USD 5.265 per new share. Subject to and in accordance with the respective provisions
of the Exact Sciences Warrants Terms and Conditions, upon exercise of the Exact Sciences Warrants and the issuance of new shares, the
exercise price of the Exact Sciences Warrants will be allocated to (as the case may be, following
conversion into the Company’s share capital currency, on the basis of the relevant USD/EUR exchange ratio as shall be published by the
ECB, as provided for in in section 5.4 of the Exact Sciences Warrants Terms and Conditions)
the share capital of the Company. To the extent that the amount of the exercise price of the Exact Sciences Warrants, per share to be
issued upon exercise of the Exact Sciences Warrants, exceeds the fractional value of the then existing shares of the Company existing
immediately prior to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon exercise of the
Exact Sciences Warrants, equal to such fractional value shall be booked as share capital, whereby the balance shall be booked as issue
premium. Following the capital increase and issuance of new shares, each new and existing share shall represent the same fraction of the
share capital of the Company. Any issue premium will be accounted for on a non-distributable account on the liabilities side of the Company’s
balance sheet under its net equity, and the account on which the issue premium will be booked shall, like the share capital, serve as
a guarantee for third parties and can only be reduced on the basis of a lawful resolution of the general shareholders’ meeting passed
in the manner required for an amendments to the Company’s articles of association.
| 3.4. | Rights attached to the new shares to be issued upon exercise of the Exact Sciences Warrants |
As mentioned above, the new shares to
be issued upon exercise of the Exact Sciences Warrants shall have the same rights and benefits as, and rank pari passu in all respects
including as to entitlement to dividends and other distributions, with the existing and outstanding shares at the moment of their issue
and will be entitled to dividends and other distributions in respect of which the relevant record date or due date falls on or after the
date of their issue.
| 4. | Justification of the proposed Transaction |
The board of directors believes that
the Transaction is in the interest of the Company because, first and foremost, the Amendment, of which the Transaction is a part, allowed
the Company to defer and amend payments in cash of milestones under the Initial Earn-Out Consideration, which in turn enabled the Company
to preserve its cash resources for other general corporate and working capital purposes. If the Exact Sciences Warrants are not issued
to Exact Sciences, as provided for in the Amendment, the Company could be in breach of its undertakings pursuant to the Amendment.
In
addition, although there can be no guarantee that the Exact Sciences Warrants will ultimately be exercised, the exercise of the Exact
Sciences Warrants and the payment of the corresponding exercise price of the Exact Sciences Warrants as the case may be, will provide
the Company with additional cash, which can be used to further finance the Company’s activities and strengthen its balance sheet.
English translation - For information purposes
only
The board of directors is aware that
the issue of the Exact Sciences Warrants may result in additional dilution for shareholders. However, the dilution will depend on the
actual exercise of the Exact Sciences Warrants. In any event, the board of directors believes this potential dilution does not outweigh
a scenario in which the Company would have not entered into the Amendment and would have not obtained a deferment and amendment of payments
in cash of milestones under the Initial Earn-Out Consideration.
For
all of the above reasons, the board of directors believes that the proposed Transaction is in the interest of the Company, its shareholders,
and other stakeholders. The board of directors therefore recommends that the EGM approves the issuance of the Exact Sciences Warrants.
| 5. | justification of the issuance price and exercise price of the Exact Sciences Warrants |
Pursuant to the Exact Sciences Terms
and Conditions, the Exact Sciences Warrants will be granted to Exact Sciences without any further consideration.
The exercise price of the Exact Sciences
Warrants of USD 5.265 (representing the share capital of the Company for the amount equal to the fractional value and the issue premium
for the amount in excess of the fractional value), was determined by the board of directors following negotiations with Exact Sciences.
The negotiation process was conducted objectively and independently. The exercise price represented a premium of circa 45% compared to
the trading price of the Company’s American depositary shares that were traded on Nasdaq on August 23, 2023, i.e. the day on which the
Amendment was signed.
Whether or not an Exact Sciences Warrant
will be exercised depends on the (sole) decision of Exact Sciences. Such decision will depend on the price of the Company’s shares at
the moment of the decision whether or not to exercise as compared with the exercise price of the Exact Sciences Warrants, since essentially,
Exact Sciences can realise a capital gain at the exercise of the Exact Sciences Warrants if the price of the Company’s shares at that
moment is higher than the exercise price of the Exact Sciences Warrants (not taking into account the possible tax related costs and assuming
that Exact Sciences can sell the underlying share at such price on the market).
Therefore, taking into account all of
the above, the board of directors is of the opinion that the exercise price of the Exact Sciences Warrants is not unreasonable and can
be sufficiently justified, and that it is in the interest of the Company, the existing shareholders, the existing holders of subscription
rights (share options) of the Company, and other stakeholders.
| 6. | Justification of the dis-application of the statutory preferential subscription right |
In the context of the envisaged Transaction
as described above, the board of directors proposes to the EGM to dis-apply the statutory preferential subscription right of the existing
shareholders of the Company and, to the extent necessary, of the existing holders of subscription rights (share options) of the Company
in accordance with articles 7:191 and 7:193 of the Belgian Companies and Associations Code, to the benefit of Exact Sciences.
The dis-application of the statutory
preferential subscription right of the existing shareholders and, to the extent necessary, of the existing holders of subscription rights
(share options), is necessary to enable the Company to issue the Exact Sciences Warrants in accordance with the Amendment.
The Company’s undertaking to submit
the issuance of the Exact Sciences Warrants to the EGM was one of the key elements that allowed the Company to enter into the Amendment
and to defer and amend the payments in cash of milestones under the Initial Earn-Out Consideration This enabled the Company to preserve
its cash resources to further finance its activities, as set out in paragraph 4 above.
English translation - For information purposes
only
If the Exact Sciences Warrants are not
issued to Exact Sciences, as provided for in the Amendment, the Company could be in breach of its undertakings pursuant to the Amendment.
For all the above reasons, the board
of directors is of the opinion that the proposed issuance of the Exact Sciences Warrants, with dis-application of the statutory preferential
subscription right to the benefit of Exact Sciences and notwithstanding the dilution resulting from the potential exercise of the Exact
Sciences Warrants for the shareholders and, as the case may be, the holders of subscription rights (share options), is in the interest
of both the Company and existing shareholders and holders of subscription rights (share options), and other stakeholders, since it allowed
the Company to defer and amend payments in cash of milestones under the Initial Earn-Out Consideration.
| 7. | Certain financial consequences |
| 7.1. | Introductory comments |
The following paragraphs provide an
overview of certain financial consequences of the potential exercise of the Exact Sciences Warrants. For further information with regard
to the financial consequences of the potential exercise of the Exact Sciences Warrants, reference is also made to the report prepared
in accordance with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations Code by the statutory auditor of the Company,
BDO Réviseurs d’Entreprises SRL.
Whether or not new shares are issued
pursuant to the exercise of the Exact Sciences Warrants will depend on whether or not the Exact Sciences Warrants are exercised by Exact
Sciences.
Likewise, the actual financial consequences
resulting from the exercise or conversion for shares of the other outstanding and proposed new dilutive instruments of the Company cannot
yet be determined with certainty.
| |
Accordingly, the discussion herein of the financial consequences of the proposed issuance and exercise of the Exact Sciences Warrants for existing shareholders is purely illustrative and hypothetical, and is based on purely indicative financial parameters (where relevant) |
Subject to the foregoing reservations,
for the purposes of the illustration of some of the financial consequences of the exercise of the Exact Sciences Warrants and notably
the dilution for the shareholders, the following parameters and assumptions were used:
| (a) | Exchange Rate1: For
the purpose of the simulations and illustrations below, the following exchange rate is used:
USD 1.0743 for 1 EUR, which is the exchange rate as published by the ECB on https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html
on May 8, 2024 (the “Exchange Rate”). |
| (b) | Current share capital: At the date of this report, the share capital of the Company amounts to
EUR 164,302,752.89 represented by 27,288,093 shares without nominal value, each representing the same fraction of the share capital,
i.e., (rounded) EUR 6.0210. The share capital is entirely and unconditionally subscribed for and is fully paid-up. |
| 1 | The Company’s shares are listed on Nasdaq, where they are traded in USD.
However, the Company’s share capital is currently expressed in EUR. In view of the current difference between the Company’s shares trading
currency and the Company’s share capital currency, except for amounts in the financial dilution simulations in paragraph 7.4 below, all
amounts in USD used in the simulations herein are converted in EUR on the basis of the Exchange Rate. |
English translation - For information purposes
only
| (c) | The Transaction: In order to illustrate the maximum potential dilutive effects of the Transaction
below, it is assumed that the 1,000,000 Exact Sciences Warrants are issued and all exercised, for a total of 1,000,000 newly issued shares
at an issue price of USD 5.265 per new shares, resulting in a total issue price of USD 5,265,000, or, applying the Exchange
Rate, at an issue price of EUR 4.900 per new shares, resulting in a total issue price of EUR 4,900,000 (including issue premium,
if any). To reflect maximum dilution, the maximum 7.5% shareholding cap (as described above) is not taken into account in the simulations
below. Should this 7.5% shareholding cap be applied, only 3,528,875 shares could be issued to Exact Sciences on a fully diluted basis,
taking into account the most dilutive parameters used herein. |
| (d) | Share Options: Furthermore, the following 18,388,230 subscription rights issued by the Company
are still outstanding at the date of this report (the “Share Options”): |
| (i) | 522,500 outstanding share options issued
under the form of subscription rights on June 23, 2014 (“2014 Share Options”) (of which 68,500 share options have
not yet been granted)2; |
| (ii) | 1,866,000 outstanding share options issued under the form of subscription rights on June 19,
2017 (“2017 Share Options”) (which have all been granted); |
| (iii) | 2,632,860 outstanding share options issued under the form of subscription rights on June 21,
2019 (“2019 Share Options”) (of which 1,500 share options have not yet been granted); |
| (iv) | 3,525,000 outstanding share options issued under the form of subscription rights on May 27, 2021 (“2021
Share Options”) (which have all been granted); |
| (v) | 4,851,870 outstanding share options issued under the form of subscription rights on May 25, 2022 (“2022
Share Options”) (of which 2,500 share options have not yet been granted); and |
| (vi) | 4,990,000 outstanding share options issued under the form of subscription rights on June 30, 2023 (“2023
Share Options”) (of which 1,960,000 share options have not yet been granted). |
Each of the aforementioned Share Options
entitles the holders thereof to subscribe for one new share of the Company upon exercise of the relevant Share Option. For the purpose
of the full-dilution scenario calculations further below, it is assumed that all of the 18,388,230 outstanding Share Options (including
the 68,500 outstanding 2014 Share Options, the 1,500 outstanding 2019 Share Options, the 2,500 outstanding 2022 Share Options and the
1,960,000 outstanding 2023 Share Options that can still be granted) have been effectively granted, have vested and are exercisable. On
that basis, if all 18,388,230 Share Options were exercised, 1,838,823 new shares would need to be issued by the Company.
| 2 | All 2014 Share Options that are not exercised by June 23, 2024 will automatically lapse and become null
and void. |
English translation - For information purposes
only
| (e) | Amended Earn-Out Consideration: For the purpose of the full-dilution scenario calculations
further below, it is assumed that the full Amended Earn-Out Consideration amount of USD 82,500,000.00 is converted, by applying
the Exchange Rate (see paragraph 7.1(a)), into EUR 76,794,191.56 and is fully paid in kind by the Company to Exact Sciences by
the issuance of new shares of the Company, at an issue price per share of USD 3.00 (i.e., the closing price of the Company’s shares
on Nasdaq on May 8, 2024) or, applying the Exchange Rate, at an issue price per share of EUR 2.79, in consideration of the
settlement through a contribution in kind of receivables due by the Company to Exact Sciences up to the Amended Earn-Out
Consideration. To reflect maximum dilution, the maximum 7.5% shareholding cap (as described above) is not taken into account in the
simulations below. Should this 7.5% shareholding cap be applied, only 3,528,875 shares could be issued to Exact Sciences on a fully
diluted basis, taking into account the most dilutive parameters used herein. |
| (f) | ATM Facility: On April 30, 2024, the Company entered into a sales agreement with TD Securities
(USA) LLC (“TD Cowen”) with respect to an equity offering program under which the Company may offer and place new shares,
via TD Cowen and through various placements from time to time in an “at the market offering”, as defined in Rule 415 promulgated
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, for an aggregate maximum offering amount of USD
50,000,000 (the “ATM Facility”). The actual number of new shares
to be issued in the framework of the ATM Facility will vary depending on the effective placements of new shares and on the price for each
such placements. However the number of new shares to be issued in the framework of the ATM Facility shall not exceed 100,000,000
shares. Such new shares will be placed at a final subscription price per new
share in function of the then current USD market prices on Nasdaq at the time of the relevant placements, while such issue price cannot
be lower than USD 0.50. |
For the purpose of the full-dilution scenario
calculations further below, it is assumed that (i) new shares are issued under the ATM Facility for the full amount of USD 50,000,000.00,
and (ii) all such new shares issued under the ATM Facility are issued at an issue price per share of USD 3.00 (i.e., the closing price
of the Company’s shares on Nasdaq on May 8, 2024). On that basis, applying the Exchange Rate, EUR 46,541,934.28 would be raised by
the Company against the issuance 16,681,696 new shares of the Company at an issue price of EUR 2.79 per share.
| (g) | OrbiMed Warrants: On May 1, 2024, the Company entered into a credit agreement, as guarantor, with
MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and ORC SPV LLC (“OrbiMed”), as lender and administrative
agent, pursuant to which OrbiMed agreed to provide a five-year senior secured credit facility in an aggregate principal amount of up to
USD 100 million, of which (i) USD 55 million was advanced on the date of closing, (ii) USD 25 million will be made available, at MDxHealth,
Inc.’s discretion, on or prior to March 31, 2025, subject to certain net revenue requirements and other customary conditions, and,
and (iii) USD 20 million will be made available, at MDxHealth, Inc.’s discretion, on or prior to March 31, 2026, subject to certain
net revenue requirements and other customary conditions. Furthermore, pursuant to the credit agreement, the Company has committed to issue
to the benefit of affiliates of OrbiMed, 1,243,060 new subscription rights for new shares of the Company (each exercisable for 1 new share
of the Company at an exercise price per new share of USD 2.4134) with a 5 years term as from their issue date (the “OrbiMed
Warrants”). The proposed issuance of the OrbiMed Warrants will be submitted for approval by the same extraordinary general shareholders’
meeting of the Company as the one that will need to decide on the issuance of the Exact Sciences Warrants. |
English translation - For information purposes
only
For the purpose of the
full dilution scenario calculations further below, it is assumed that the 1,243,060 OrbiMed Warrants are issued and all exercised, for
a total of 1,243,060 newly issued shares at an issue price of USD 2.41 (rounded) per new shares, resulting in a total issue price
of USD 2,995,774.60, or, applying the Exchange Rate, at an issue price of EUR 2.24 (rounded) per new shares, resulting in a
total issue price of EUR 2,784,454.40 (including issue premium, if any). It is also assumed that the aggregate subscription price
for the OrbiMed Warrants is paid in full upon issuance and subscription of the OrbiMed Warrants.
| (h) | Allocation of the issue price of the outstanding dilutive instruments: Upon the issuance of new
shares upon exercise of the OrbiMed Warrants (should their issuance be approved by an extraordinary general shareholders’ meeting of the
Company), and/or the full placement of the ATM Facility, and/or the contribution of the Amended Earn-Out Consideration, and/or the exercise
of the Share Options, the amount of the issue price of the relevant new shares will be booked as equity (in the form of share capital
and share premium, as the case may be). The amount that shall be booked as share capital shall, on a per share basis, be equal to the
amount of the applicable fractional value of the Company’s shares at the relevant time. The balance, as the case may be, shall be booked
as issue premium. |
In this report, when
reference is made to “outstanding dilutive instruments”, it refers, respectively, to the issuance of new shares upon
exercise of the OrbiMed Warrants, the full placement of the ATM Facility, the contribution of the Amended Earn-Out Consideration and the
exercise of the outstanding Share Options.
Whether the Exact
Sciences Warrants (assuming their issuance will be approved by an extraordinary general shareholders’ meeting of the Company), the outstanding
Share Options or OrbiMed Warrants (assuming their issuance will be approved by an extraordinary general shareholders’ meeting of the Company)
will be effectively exercised will ultimately depend on the decision of the respective holders thereof. Such decision will likely be in
function of the market price of the shares of the Company at the moment of exercise or conversion, compared to their respective exercise
prices. The respective holders will likely not exercise if the market price of the shares of the Company is less than the relevant exercise
price.
Whether the Amended
Earn-Out Consideration amount is due and converted into shares of the Company will depend on the fulfilment (or not) of the respective
conditions provided by the Asset Purchase Agreement, as amended from time to time. Furthermore, should an Amended Earn-Out Consideration
amount be due by the Company to Exact Sciences, the Company can also ultimately opt to pay such Amended Earn-Out Consideration amount
in cash rather than in shares.
Whether the full USD 50,000,000 amount
is placed by the Company under the ATM Facility, the applicable issue prices for such placements and the total number of new shares issued
under the ATM Facility will depend on the ultimate decision of the Company to proceed with such placements, the terms at which such placements
are made (including the relevant USD market prices on Nasdaq used as reference
to determine the relevant issue prices) and whether such placements are successful or not.
| 7.2. | Evolution of the share capital, voting power, participation in the results and other shareholder rights |
Each share in the Company currently
represents an equal part of the share capital of the Company and provides for one vote in function of the part of the capital it represents.
The issuance of the new shares upon exercise of the Exact Sciences Warrants (provided that the Exact Sciences Warrants are issued to the
benefit of Exact Sciences) will lead to a dilution of the existing shareholders of the Company and of the relative voting power of each
share in the Company.
English translation - For information purposes
only
The dilution relating to the voting
right also applies, mutatis mutandis, to the participation of each share in the profit and liquidation proceeds and other rights
attached to the shares of the Company, such as the statutory preferential subscription right in case of a capital increase in cash through
the issuance of new shares or in case of the issuance of new subscription rights or convertible bonds.
Specifically, prior to the issuance
of new shares upon exercise of the Exact Sciences Warrants (and prior to the issuance of new shares pursuant the other outstanding dilutive
instruments), each share of the Company participates equally in the profit and liquidation proceeds of the Company and each shareholder
has a statutory preferential subscription right in case of a capital increase in cash or in case of the issuance of new subscription rights
or convertible bonds. In case of the issuance of the new shares upon exercise of the Exact Sciences Warrants (provided that the Exact
Sciences Warrants are issued to the benefit of Exact Sciences), the new shares to be issued will have the same rights and benefits as,
and rank pari passu in all respects with, the existing and outstanding shares of the Company at the moment of their issuance and
delivery, and will be entitled to dividends and other distributions in respect of which the relevant record date or due date falls on
or after the date of issuance and delivery of the new shares. As a result (and to the extent the new shares will be issued and subscribed
for pursuant to the exercise of the Exact Sciences Warrants), the participation by the existing shareholders in the profit and liquidation
proceeds of the Company and their holders’ statutory preferential subscription right in case of a capital increase in cash, shall be diluted
accordingly.
A similar dilution occurs upon exercise
or conversion of the other outstanding dilutive instruments.
Furthermore, in accordance with article
7:178 of the Belgian Companies and Associations Code, after the completion of the issuance of the new shares upon exercise of the Exact
Sciences Warrants, all of the Company’s outstanding shares will have the same (as the case may be adjusted) fractional value.
Subject to the methodological reservations
noted in paragraph 7.1, the evolution of the share capital and the number of shares, with voting rights attached thereto, of the Company
as a result of the proposed issuance and exercise of all 1,000,000 Exact Sciences Warrants (and the subsequent issuance of 1,000,000 new
shares resulting from it) is simulated below in a scenario before dilution due to outstanding dilutive instruments, as well as in a scenario
after dilution due to outstanding dilutive instruments.
Evolution of the number
of outstanding shares
| After the exercise of the Exact Sciences Warrants but before dilution due to outstanding dilutive instruments |
|
|
|
| (A) Outstanding shares |
|
|
27,288,093 |
|
| (B) New shares to be issued upon exercise of the Exact Sciences Warrants |
|
|
1,000,000 |
|
| (C) Total number of shares outstanding after (B) |
|
|
28,288,093 |
|
| (D) Dilution |
|
|
3.54 |
% |
| |
|
|
|
|
| After dilution due to outstanding dilutive instruments but before the exercise of the Exact Sciences Warrants |
|
|
|
|
| (A) Outstanding shares |
|
|
27,288,093 |
|
| (B) New shares to be issued upon exercise of all outstanding Share Options |
|
|
1,838,823 |
|
| (C) New shares to be issued upon contribution of the Amended Earn-Out Consideration |
|
|
27,499,999 |
|
| (D) New shares to be issued upon exercise of all OrbiMed Warrants |
|
|
1,243,060 |
|
| (E) New shares to be issued upon full placement of the ATM Facility |
|
|
16,681,696 |
|
| (F) Total number of new shares to be issued under (B), (C), (D) and (E) |
|
|
47,263,578 |
|
| (G) Total number of shares outstanding after (B), (C), (D) and (E) |
|
|
74,551,671 |
|
| |
|
|
|
|
| After the exercise of the Exact Sciences Warrants and after dilution due to outstanding dilutive instruments |
|
|
|
|
| (A) Outstanding shares after dilution due to outstanding dilutive instruments |
|
|
74,551,671 |
|
| (B) New shares to be issued upon exercise of the Exact Sciences Warrants |
|
|
1,000,000 |
|
| (C) Total number of shares outstanding after (B) |
|
|
75,551,671 |
|
| (D) Dilution |
|
|
1.32 |
% |
English translation - For information purposes
only
Subject to the methodological reservations
noted in paragraph 7.1, the table below reflects the evolution of the share capital, assuming the exercise of all 1,000,000 Exact Sciences
Warrants and the subsequent issuance of 1,000,000 new shares resulting from it. The maximum amount of share capital increase (excluding
issue premium) is computed by multiplying the number of new shares to be issued (i.e., 1,000,000) with the fractional value (i.e.,
currently rounded EUR 6.0210 per share).
Evolution of the share capital(1)
| Before the exercise of the Exact Sciences Warrants |
|
|
|
| (A) Share capital (in EUR) |
|
|
164,302,752.89 |
|
| (B) Outstanding shares |
|
|
27,288,093 |
|
| (C) Fractional value (in EUR) (rounded) |
|
|
6.0210 |
|
| |
|
|
|
|
| Exercise of the Exact Sciences Warrants |
|
|
|
|
| (A) Increase of share capital (in EUR) |
|
|
4,900,000.00 |
|
| (B) New shares to be issued upon exercise of the Exact Sciences Warrants.. |
|
|
1,000,000 |
|
| |
|
|
|
|
| After the exercise of the Exact Sciences Warrants |
|
|
|
|
| (A) Share capital (in EUR) |
|
|
169,202,752.89 |
|
| (B) Outstanding shares |
|
|
28,288,093 |
|
| (C) Fractional value (in EUR) (rounded) |
|
|
5.9814 |
(2) |
| (1) | This simulation does not take into account the exercise or conversion of outstanding dilutive instruments. |
| (2) | The issue price is lower than the fractional value of the existing shares of the Company (i.e., currently
rounded EUR 6.0210). Therefore, in accordance with Article 7:178 of the Belgian Companies and Associations Code, after the exercise of
the Exact Sciences Warrants, all outstanding shares of the Company will have the same fractional value, i.e. rounded to EUR 5.9814. |
| 7.3. | Participation in the consolidated accounting net equity |
The evolution of the consolidated accounting
net equity of the Company as a result of the exercise of the Exact Sciences Warrants is simulated below.
The simulation is based on the audited
consolidated annual financial statements of the Company for the financial year ended on December 31, 2023 (which have been prepared in
accordance with the International Financial Reporting Standards, as adopted by the European Union (“IFRS”) and which
have been submitted to the Company’s annual shareholders’ meeting for approval). The consolidated accounting net equity of the Company
as at December 31, 2023 amounted to EUR 6,709 (’000) (rounded) (i.e., USD 7,208 (’000) (rounded)), on the basis of the Exchange
Rate) or EUR 0.2459 (rounded) per share (based on 27,288,093 outstanding shares as at December 31, 2023). The simulation does not
take into account any changes in the consolidated accounting net equity since December 31, 2023.
English translation - For information purposes
only
For further information on the Company’s
net equity position on December 31, 2023, reference is made to the financial statements of
the Company, which are available on the Company’s website.
Based on the assumptions set out above,
as a result of the exercise of the Exact Sciences Warrants, without taking into account the other outstanding dilutive instruments, the
Company’s accounting net equity on a consolidated basis, would be increased as indicated below:
Evolution of the consolidated accounting net
equity
| Consolidated net equity for FY 2023 | |
| |
| (A) Net equity (in EUR ’000) (rounded) | |
| 6,709 | |
| (B) Outstanding shares | |
| 27,288,093 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.2459 | |
| | |
| | |
| Exercise of the Exact Sciences Warrants | |
| | |
| (A) Increase of net equity (in EUR ’000) (rounded) (1) | |
| 4,900 | |
| (B) New shares to be issued upon exercise of the Exact Sciences Warrants | |
| 1,000,000 | |
| | |
| | |
| After exercise of the Exact Sciences Warrants | |
| | |
| (A) Net equity (in EUR ’000) (rounded) | |
| 11,609 | |
| (B) Outstanding shares | |
| 28,288,093 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.4104 | |
The table above demonstrates that the
issuance of the Exact Sciences Warrants and the subsequent exercise of all the Exact Sciences Warrants will would, from a pure accounting
point of view, lead to an increase of the amount represented by each share in the consolidated accounting net equity of the Company.
The evolution of the market capitalisation
as a result of the exercise of the Exact Sciences Warrants is simulated below.
Subject to the methodological reservations
noted in paragraph 7.1, the table below reflects the impact of the exercise of the Exact Sciences Warrants, without taking into account
the other outstanding dilutive instruments, on the market capitalisation and the resulting financial dilution.
English translation - For information purposes
only
After close of trading on Nasdaq on
May 8, 2024, the Company’s market capitalisation was USD 81,864,279.00, on the basis of a closing price of USD 3.0000 per share.
Assuming that, following the exercise of the Exact Sciences Warrants, without taking into account the other outstanding dilutive instruments,
the market capitalisation increases exclusively with the funds raised based on the parameters described hereabove, the new market capitalisation
would then be rounded to USD 3.0801 per share. This would represent a (theoretical) financial accretion of 2.67% per share.
Evolution of the market capitalisation and financial
dilution
| Before the exercise of the Exact Sciences Warrants (1) |
|
|
|
| (A) Market capitalisation (in USD) |
|
|
81,864,279.00 |
|
| (B) Outstanding shares |
|
|
27,288,093 |
|
| (C) Market capitalisation per share (in USD) |
|
|
3.0000 |
|
| |
|
|
|
|
| Exercise of the Exact Sciences Warrants |
|
|
|
|
| (A) Funds raised (in USD) |
|
|
5,265,000.00 |
|
| (B) New shares to be issued upon exercise of the Exact Sciences Warrants |
|
|
1,000,000 |
|
| |
|
|
|
|
| After the exercise of the Exact Sciences Warrants (1) |
|
|
|
|
| (A) Market capitalisation (in USD) |
|
|
87,129,279.00 |
|
| (B) Outstanding shares |
|
|
28,288,093 |
|
| (C) Market capitalisation per share (in USD) (rounded) |
|
|
3.0801 |
|
| |
|
|
|
|
| Dilution/Accretion |
|
|
2.67 |
% |
| (1) | At the date of this report and not taking into account the potential issuance of new shares pursuant to
the exercise or conversion of other outstanding dilutive instruments. |
| 7.5. | Other financial consequences |
For a further discussion on the financial
consequences of the proposed issuance of the Exact Sciences Warrants and their subsequent exercise, the board of directors refers to the
report prepared in connection therewith by the statutory auditor of the Company.
* * *
Done on May 13, 2024.
English translation -
For information purposes only
On behalf of the board of directors,
| |
[Signed] |
|
|
[Signed] |
| By: |
|
|
By: |
|
English translation - For information purposes
only
ANNEX A
EXACT SCIENCES WARRANTS TERMS AND CONDITIONS
English translation -
For information purposes only
ANNEX B
REPORT OF THE STATUTORY AUDITOR PREPARED
IN ACCORDANCE WITH
ARTICLES 7:180, 7:191 AND 7:193 OF THE BELGIAN COMPANIES AND ASSOCIATIONS
CODE
Exhibit 99.10
NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “US SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE US SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS.
Mdxhealth
Limited Liability Company
Registered office: CAP Business Center, Zone Industrielle
des Hauts-Sarts
Rue d’Abhooz 31, 4040 Herstal, Belgium
VAT BE 0479.292.440 Register of Legal Entities Liège, division Liège
Exact
sciences Warrants
Terms
and Conditions
The present terms and conditions (hereinafter
referred to as the “Conditions”) contain the issue and exercise conditions of the subscription rights, named “Exact
Sciences Warrants” (the “Warrants”), issued by MDxHealth SA, a limited liability company (société
anonyme) organised and existing under the laws of Belgium, with registered office at CAP Business Center, Zone Industrielle des Hauts-Sarts,
Rue d’Abhooz 31, 4040 Herstal, Belgium, registered with the register for legal entities (registre des personnes morales) under
number 0479.292.440 (RLP Liège, division Liège) (the “Company”) on [●] (the “Issue Date”)
following the second amendment to the asset purchase agreement entered by and between the Company and Genomic Health, Inc. (“Exact
Sciences”) on August 2, 2022, pursuant to which, among other things and subject to the terms and conditions included in the
asset purchase agreement, Exact Sciences agreed to sell and assign, and the Company agreed to purchase and assume, the business of developing,
marketing and performing the Oncotype DX Genomic Prostate Score test.
Subject to, and in accordance with, the terms
and conditions set forth in the Conditions:
| Warrants issued: |
1,000,000
Warrants |
| |
| Shares per Warrant: |
each
Warrant confers the right (but not the obligation) on the Holder thereof (as defined below) to subscribe, upon exercise of the Warrant,
for one (1) new Share of the Company (as defined below) (as may be adjusted and/or substituted pursuant to section 6 of the Conditions)
to be issued by the Company against payment in cash of the Exercise Price. |
| |
| Exercise Price: |
USD 5.265
per Warrant (as may be adjusted pursuant to section 6 of the Conditions) (the “Exercise
Price”). |
| |
| Term: |
The
Warrants have a term (the “Term”)
ending on (and including) 18:00 hours on August 22, 2028 (the “Expiration Date”). |
| 1. | Certain Definitions and Interpretation |
| 1.1. | Certain definitions: In these Conditions,
the following words and expressions that are not defined elsewhere in these Conditions shall
have the following meanings, save where the context requires otherwise: |
“Affiliate” means,
when used with respect to a Person, any Person that controls, is controlled by or is under common control with such Person, for so long
as such control exists. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms
“controlled by” or “under the common control with”) means the actual power, either directly or indirectly through
one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership
of more than fifty percent (50%) of the voting shares of such entity, or by contract or otherwise.
“Belgian Companies and Associations
Code” means the Belgian Companies and Associations Code of 23 March 2019, as amended from time to time, and the rules and regulations
promulgated thereunder.
“Business Day” means
a day on which banks are generally open for business in Brussels (Belgium) and New York (United-States), excluding Saturdays and Sundays.
“Holder” means a
Person from time to time who entered in the warrant register of the Company as a holder of one or more Warrants.
“Person” means any
individual or natural person, any legal entity with separate legal personality, partnership, joint venture, (joint share) corporation,
association, limited liability company, trust, unincorporated organisation, or any governmental entity (or any department, agency or
political subdivision thereof).
“Trading Day” means
any day on which the Shares are traded on the Nasdaq Capital Market, or, if the Nasdaq Capital Market is not the principal trading market
for the Shares, then on the principal securities exchange or securities market on which the Shares are then traded.
“Share” means any
ordinary share (aandeel / action) outstanding from time to time representing the Company’s share capital.
| 1.2. | Headings: Headings used in these Conditions
are for convenience purposes only and shall not affect the construction or interpretation
of these Conditions. |
| 1.3. | Meaning of references: Unless the
context does not so permit, or save where specifically indicated otherwise: |
| (a) | references to articles are to sections
in these Conditions, and references to sub-sections or paragraphs are to sub-sections or
paragraphs of the section in which such references appear; |
| (b) | references to Schedules are references
to the schedules to these Conditions; |
| (c) | the words “herein”, “hereof”,
“hereunder”, “hereby”, “hereto”, “herewith” and words
of similar import shall refer to these Conditions as a whole and not to any particular section,
paragraph or other subdivision; |
| (d) | references to the word “include”
or “including” (or any similar term) are not to be construed as implying
any limitation, and general words introduced by the word “other” (or any similar
term) shall not be given a restrictive meaning by reason of the fact that they are preceded
by words indicating a particular class of acts, matters or things; |
| (e) | any reference to “writing” or
“written” includes any method of reproducing words or text in a legible and non-transitory
form and shall also include e-mail; |
| (f) | references to any statute, regulation
or statutory provision shall be deemed to include reference to any statute, regulation or
statutory instrument which amends, extends, consolidates or replaces the same (or shall have
done so) and to any other regulation, statutory instrument or other subordinate legislation
made thereunder or pursuant thereto, provided that no such reference shall include any amendment,
extension or replacement of the same with retrospective effect; |
| (g) | all periods of time set out herein shall
be calculated from midnight to midnight local time in Brussels, Belgium. They shall start
on the day following the day on which the event triggering the relevant period of time has
occurred. The expiration date shall be included in the period of time. If the expiration
date is not a Business Day, it shall be postponed until the next Business Day. Unless otherwise
provided herein, all periods of time shall be calculated in calendar days. All periods of
time consisting of a number of months (or years) shall be calculated from the day in the
month (or year) when the triggering event has occurred until the eve of the same day in the
following month(s) (or year(s)) (“van de zoveelste tot de dag vóór
de zoveelste” / “de quantième à veille de quantième”). |
| 1.4. | Fractional value: For the purpose
of these Conditions, the fractional value (fractiewaarde / pair comptable)
of the Company’s Shares from time to time shall be determined as a fraction, (a) the
numerator of which is the amount of the Company’s share capital at that time, and (b) the
denominator of which is the aggregate number of actually issued and outstanding Shares of
the Company at that time. |
| 1.5. | Language: The Conditions were drawn
up in English, after which a French translation was prepared. In the case of discrepancies
between the English and the French version, the English version shall prevail between the
parties hereto to the fullest extent possible and permitted by Belgian law. Notwithstanding
the foregoing, Belgian legal concepts which are expressed in English language terms, are
to be interpreted in accordance with the Belgian legal terms to which they refer, and the
use herein of French and/or Dutch words in these Conditions as translation for certain words
or concepts shall be conclusive in the determination of the relevant legal concept under
Belgian law of the words or concepts that are so translated herein. |
| 2. | Nature and Form of the Warrant |
| 2.1. | Nature of the Warrants: Each Warrant
has been issued in the form of one subscription right (inschrijvingsrecht / droit de souscription),
subject to the terms of these Conditions, which are binding upon the Company and each Holder.
A total of one million (1,000,000) Warrants has been issued. |
| 2.2. | Subscription right: Subject to, and
in accordance with, the terms and conditions set forth in these Conditions, each Warrant
confers the right (but not the obligation) on the Holder thereof to subscribe, upon exercise
of the Warrant, for one (1) new Share to be issued by the Company (as may be adjusted and/or
substituted pursuant to section 6 of the Conditions) against payment in cash of the Exercise
Price of the Warrant (as may be adjusted pursuant to section 6 of the Conditions). |
| 2.3. | No shareholder rights: The Holder
of a Warrant is not a shareholder of the Company solely by virtue of holding the Warrant,
and therefore does not have the rights of a shareholder in relation to the Shares to be issued
or delivered to the holder of the Warrant upon an exercise of the Warrant until the exercise
of the Warrant and the issue and delivery of the relevant Shares. The Holder will, however,
have the right to attend general shareholders’ meetings of the Company to the extent permitted
by applicable law. |
| 2.4. | Form: The Warrants are in registered
form. In accordance with applicable law, the ownership and rights to a Warrant is recorded
in a warrant register book, which is kept at the registered office of the Company. The Warrants
cannot be converted into a bearer instrument or in dematerialised form. At the request of
the Holder, the Company shall confirm in writing the number of Warrants held by the Holder
by means of a confirmation substantially in the form of Schedule 1 (the “Confirmation”). |
| 2.5. | No listing: The Warrant shall not
be listed at any time on a securities exchange, regulated market, multilateral trading facility
or similar securities market. |
| 2.6. | Transferability of the Warrant: Except
if the Company were to explicitly allow a transfer of the Warrants, the Warrants cannot be
transferred by Holder. |
The Warrants have a Term starting as
from their issuance and ending on (and including) 18:00 hours on the Expiration Date. A Warrant automatically expires and becomes invalid
(caduque) by operation of law on 18:00 hours on the Expiration Date, unless it is exercised prior to such time by the Holder thereof
in accordance with the terms and conditions set forth in these Conditions.
| 4. | Shares issuable upon exercise of the Warrants |
The Shares to be issued upon each exercise
of the Warrants shall have the same rights and benefits as, and rank pari passu in all respects including as to entitlement to
dividends and other distributions, with the existing and outstanding Shares at the moment of their issue and will be entitled to dividends
and other distributions in respect of which the relevant record date or due date falls on or after the date of their issue.
| 5. | Exercise of the Warrants |
| 5.1. | Right to exercise: Each Warrant can
be exercised at any time as from [●], 2024 until the expiry of the Term, provided that
a number of Warrants with an aggregate Exercise Price of at least $250,000 are exercised
by the Holder. The exercise of a Warrant following the Expiration Date shall be considered
void. |
| 5.2. | Limitations on exercises. To the extent
any Warrant is not exercised earlier, such Warrant will lapse and terminate immediately at
18:00 hours on the Expiration Date, without further notice, and the rights to exercise the
Warrants shall be of no further force or effect whatsoever thereafter. |
| 5.3. | Exercise Notice: The Warrants can
only be exercised by means of a duly completed and signed written notice substantially in
the form of Schedule 2 (the “Exercise Notice”). The Exercise Notice must
be served on the Company in accordance with the provisions of section 9.4. The date on which
the Exercise Notice shall have been served (or be deemed served) on the Company pursuant
to section 9.4 shall be the exercise date of the relevant Warrants (the “Exercise
Date”). The Exercise Date must fall within the Term. |
| 5.4. | Payment of the Exercise Price: Upon
the exercise of a Warrant, the applicable Exercise Price must be paid in cash by means of
a wire transfer of such amount in immediately available funds in USD to the special account
of the Company that shall be notified by the Company to the Holder of the Warrant (the “Exercise
Account”). The Company shall, as promptly as practicable and in any event no later
than one (1) Business Day after the Exercise Date of a Warrant, notify the Holder of the
Warrant of the details of the relevant Exercise Account via email to the address mentioned
in the Exercise Account. If the applicable Exercise Price of a Warrant is not paid in accordance
with the foregoing provisions and received by the Company on the Exercise Account prior to
16:00 hours on the third (3rd) Business Day following the Exercise Date, the Warrant shall
be deemed not to have been exercised. Should the Company’s share capital be expressed in
euro in the Company’s articles of association, for the purpose of the capital increase and
the amendment of the Company’s articles of association resulting from the exercise of Warrants,
the amount equal to the relevant aggregate Exercise Price for such Warrants exercise shall
be converted into euro on the basis of the relevant USD/EUR exchange ratio as shall be published
by the European Central Bank (“ECB”) on https://www.ecb.europa.eu/stats/policy_and_
exchange_rates/euro_reference_exchange_rates/html/index.en.html (or such other relevant website
of the ECB) (the “Exchange Rate”) on the Business Day preceding the date
of the relevant notarial deed in which the issuance of the relevant new Shares and the corresponding
capital increase are established, and whereby final amount in euro will be rounded down to
the nearest two decimals. |
| 5.5. | No exercise for fractions of Shares:
The Warrants can only be exercised for a whole number of Shares, and not with respect to
fractions of Shares. If as a result of an adjustment pursuant to section 6 of the Conditions
a Warrant were to give the right to subscribe for a fraction of a Share, the Warrants can
be exercised in an aggregated manner by the Holder thereof in such a manner that the number
of Shares issuable upon exercise of the Warrants concerned (including the relevant fractions
of a Share) shall be aggregated, but rounded down to the nearest whole number of Shares. |
| 5.6. | Issue and delivery of the Shares:
The Company shall only be obliged to issue Shares upon an exercise of a Warrant provided
that (a) the exercise complies with sections 5.1 and 5.2, (b) the relevant Exercise
Notice has been served upon the Company in accordance with section 5.3, and (c) the
applicable aggregate Exercise Price has been paid in accordance with the provisions of section
5.4. Subject to the foregoing, the Company shall issue and deliver the relevant Shares as
soon as practicable, but in any event no later than 18:00 hours on the fourteenth (14th)
Business Day after the Exercise Date (the “Delivery Date”). |
| 5.7. | Form of the Shares: The Shares to
be delivered upon the exercise of the Warrants shall be delivered by 18:00 hours on the Delivery
Date in accordance with the delivery instructions set out in the Exercise Notice or, in the
absence of such instructions, in registered form and recorded in the component of the Company’s
share register that is maintained in the United States with the Company’s transfer agent
and registrar in the United States.,. |
| 5.8. | Capital increase: In accordance with
applicable law, upon the exercise of Warrants, the capital increase and issue of new Shares
resulting therefrom shall be formally recorded before a notary public by one or more authorised
representatives of the Company. |
| 5.9. | Allocation of the Exercise Price:
Upon the exercise of Warrants and the issue of the relevant new Shares pursuant to these
Conditions, the applicable aggregate Exercise Price shall be allocated to the share capital
of the Company. If the amount of the applicable Exercise Price per Share issued is greater
than the fractional value of the existing Shares immediately prior to the capital increase,
then the applicable aggregate Exercise Price shall be allocated in such a manner that per
Share issued (i) a part of the applicable aggregate Exercise Price equal to the fractional
value of the existing Shares immediately prior to the capital increase shall be booked as
share capital, and (ii) the balance of the applicable aggregate Exercise Price shall
be booked as issue premium. Such issue premium shall be accounted for on the liabilities
side of the Company’s balance sheet as net equity. The account on which the issue premium
shall be booked shall, like the share capital, serve as the guarantee for third parties and,
save for the possibility of a capitalisation of those reserves, can only be reduced on the
basis of a valid resolution of the general shareholders’ meeting passed in the manner required
for an amendment to the Company’s articles of association. Following the issue of new Shares
and the capital increase resulting therefrom, each of the Shares (existing and new) shall
represent the same fraction of the Company’s share capital. |
| 5.10. | Further information: Upon receipt
of the Exercise Notice in relation to a Warrant, the Company may request the Holder of the
relevant Warrant in writing to provide to the Company with such further declarations and
documents, which are reasonably necessary to allow the Company to comply with all applicable
legal and regulatory provisions in connection with the exercise of the Warrant and the issue
or delivery of the Shares resulting therefrom. |
| 5.11. | Listing of the Shares: the Company
will procure, at its sole expense, that, upon exercise of the Warrant, the Shares issuable
upon exercise of the Warrants be admitted to trading and listing on any principal stock exchange
or other trading platform on which the Company’s other Shares are then admitted to trading
and listing. the Company will use reasonable best efforts to ensure that the Shares issuable
upon exercise of the Warrants may be issued without violation of any applicable law or regulation
or of any requirement of any securities exchange on which the Company’s other Shares are
then listed or traded. |
| 6. | Adjustments to the Shares and the Exercise
Price |
| 6.1. | Splits and reverse splits: If the
Company subdivides its Shares into a greater number of Shares, the number of Shares issuable
upon exercise of the Warrants pursuant to the Conditions shall be proportionately increased,
and the Exercise Price shall be proportionately reduced. If the Shares are reduced, combined
or consolidated into a lesser number of Shares, the Exercise Price shall be proportionately
increased and the number of Shares issuable upon exercise of the Warrants pursuant to the
Conditions shall be proportionately reduced. |
| 6.2. | Reclassification, exchange, combinations
or substitution, etc.: Upon any event whereby all of the Shares are reclassified, exchanged,
combined, substituted, or replaced for, into, with or by Company securities of a different
class and/or kind, then from and after the consummation of such event, each outstanding Warrant
will be exercisable for the number, class and kind of Company securities that the Holder
would have received had the Shares issuable upon exercise of such Warrant been issued and
outstanding on and as of the consummation of such event, and subject to further adjustment
thereafter from time to time in accordance with the provisions of these Conditions. Following
such an event, the terms of these Conditions shall apply mutatis mutandis with respect
to such other Company securities. The provisions of this section 6.2 shall similarly apply
to successive reclassifications, exchanges, combinations, substitutions, replacements or
other similar events. |
| 6.3. | No other adjustments: Notwithstanding
article 7:71 of the Belgian Companies and Associations Code, the Company may proceed with
all actions that it deems appropriate in relation to its capital, its articles of association,
its financial condition or its management, even if such actions would lead to a reduction
of the benefits allocated to the Holder of Warrants, including but not limited to mergers,
acquisitions, capital increases or reductions (including those subject to a condition precedent),
incorporation of reserves in the capital with issuance of new shares, the distribution of
dividends, the issuance of subscription rights, convertible bonds or other securities entitling
the holder to subscribe for or acquire shares or other securities of the Company, the amendment
of arrangements or provisions relating to the distribution of profits or liquidation proceeds
(except if an amendment to the arrangements or provisions relating to the distribution of
profits or liquidation proceeds would result in all of the then outstanding and existing
Shares having preferred rights relating to the distribution of profits or liquidation proceeds
as compared to the Shares to be issued upon exercise of the Warrants). Should the rights
of a Holder with respect to the Warrants of such Holder be affected by such decision or transaction,
then the Holder shall not be entitled to a change of the Exercise Price, a change of the
exercise conditions or any other form of (financial or other) compensation, unless specifically
provided for in sections 6.1 and 6.2 of these Conditions. |
| 6.4. | Notice as to adjustments. Upon each
adjustment of the number of Shares issuable upon exercise of the Warrants pursuant to the
Conditions, substitution of such Shares, or adjustment of the Exercise Price in accordance
with this section 6, the Company shall notify the Holder in writing in accordance with the
provisions of section 9.4 within a reasonable time setting forth the relevant adjustment
and facts upon which such adjustment is based. |
| 7. | Representations AND Warranties OF THE HOLDER |
Upon subscribing for or otherwise acquiring
Warrants, and upon an exercise of Warrants, the Holder shall (and shall be deemed to) provide to the Company the following representations,
warranties, agreements, covenants, undertakings and acknowledgements:
| 7.1. | Qualified Investor status. The Holder
warrants, represents and agrees with the Company that it is either: |
| (a) | (i) a “qualified investor”
within the meaning of Regulation 2017/1129 of the European parliament and of the council
of 14 June 2017 on the prospectus to be published when securities are offered to the public
or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, as amended;
and (ii) it is not in the United States and is not acting for the account or benefit
of a person within the United States, and was located outside the United States at the time
of subscribing or acquiring Warrants, and is acquiring Warrants or, if it is giving this
representation and warranty in connection with an exercise of Warrants, acquiring Shares
outside the United States in an “offshore transaction” as defined in Regulation
S (“Regulation S”) under the United States Securities Act of 1933, as amended
(the “US Securities Act”) and not with a view towards, or for resale in
connection with, the public sale or distribution thereof in a manner that would violate the
US Securities Act; or |
| (b) | (i) a institutional “accredited
investor” (an “IAI”) within the meaning of Rule 501(a) under the
US Securities Act or a “qualified institutional buyer” (a “QIB”)
as defined in Rule 144A (“Rule 144A”) under the US Securities Act or, if
it is giving this representation and warranty in connection with an exercise of Warrants,
acquiring Shares for its own account or for the account of one or more IAIs or QIBs with
respect to whom it has the authority to make, and does make, the representations, warranties
and agreements herein; (ii) the Warrants and Shares issuable pursuant to the Conditions
have not been, and will not be, registered under the US Securities Act or with any state
or other jurisdiction of the United States and that it is aware, and each legal or beneficial
owner of the Warrants and Shares issuable pursuant to the Conditions has been advised, that
the Warrants and Shares are being offered, issued and sold to it in accordance with the exemption
from registration under the US Securities Act for transactions by an issuer not involving
a public offering of securities in the United States; (iii) the Warrants and Shares
issuable pursuant to the Conditions may not and will not be reoffered, resold, pledged or
otherwise transferred by it except: (A) pursuant to a registration statement which has
been declared effective under the US Securities Act; (B) outside the United States pursuant
to Rule 903 or Rule 904 of Regulation S; (C) to a person that it and any person acting
on its behalf reasonably believe is a QIB purchasing for its own account or for the account
of another QIB a transaction meeting the requirements of Rule 144A; or (D) pursuant
to Rule 144 under the US Securities Act (if available) or another exemption from, or in a
transaction not subject to, the registration requirements of the US Securities Act and in
each case in accordance with all applicable securities laws of the states of the United States
and any other relevant jurisdiction and, in the case of (C) and (D) above, only after delivery
of an opinion of counsel or such other documentation as the Company may reasonably require
to evidence compliance with the registration requirements of the US Securities Act; (iv) the
Warrants and Shares issuable pursuant to the Conditions are “restricted securities”
as defined in Rule 144(a)(3) under the US Securities Act; (v) it has not subscribed
for or acquired the Warrants or, if it is giving this representation and warranty in connection
with an exercise of Warrants, the Shares issuable pursuant to the Conditions as a result
of any general solicitation or general advertising, including advertisements, articles, blogs,
mass-distributed emails, notices, website postings (including any form of communication by
social media) published in any newspaper or magazine (online or print versions), broadcast
over any form of television or radio (including streaming and satellite transmissions substantially
similar thereto) or any seminar, meeting, chatroom or conference call whose attendees have
been invited by general solicitation or general advertising; (vi) for so long as the
Warrants and Shares issuable pursuant to the Conditions are “restricted securities”
(within the meaning of Rule 144(a)(3) under the US Securities Act), it will segregate such
Warrants and Shares from any other warrants, Shares or other financial instruments of the
Company that it holds that are not restricted securities, it shall not deposit such Warrants
and Shares in any unrestricted depositary receipt facility established or maintained by a
depositary bank in respect of financial instruments of the Company and it will only transfer
such Warrants and Shares in accordance with this paragraph; (vii) if it is acquiring the
Warrants or, if it is giving this representation and warranty in connection with an exercise
of Warrants, the Shares issuable pursuant to the Conditions as a fiduciary or agent for one
or more investor accounts, it has sole investment discretion with respect to each such account;
(viii) it is acquiring such Warrants or, if it is giving this representation and warranty
in connection with an exercise of Warrants, the Shares issuable pursuant to the Conditions
for its own account (or the account of one or more IAIs or QIBs as to which it has sole investment
discretion) for investment purposes and (subject to the disposition of its property being
at all times within its control) not with a view towards, or for resale in connection with,
the public sale or distribution thereof in a manner that would violate the US Securities
Act; and (ix) the Company has not made any representation as to the availability of
the exemption provided by Rule 144 or any other exemption under the US Securities Act for
the reoffer, resale, pledge or transfer of Warrants and Shares issuable pursuant to the Conditions. |
| 7.2. | Investment experience. The Holder
understands that the acquisition of Warrants and Shares issuable pursuant to the Conditions
involves substantial risk and the Holder has experience as an investor in securities of companies
in the development stage or otherwise comparable to the Company, and acknowledges that the
Holder can bear the economic risk of its investment in acquisition of Warrants and Shares
issuable pursuant to the Conditions, and has such knowledge and experience in financial or
business matters such that it is capable of evaluating the merits and risks of its investment
in Warrants and Shares issuable pursuant to the Conditions. |
| 7.3. | No voting or dividend rights. The
Holder, as the Holder of this Warrant, will not have any voting rights with respect to general
meetings of the Company nor any dividend rights until the underlying Shares have been issued
to it upon the exercise of this Warrant. |
| 8. | Representations and Warranties of the Company |
The Company represents and warrants
to the Holder as follows:
| 8.1. | Warrants duly authorised and issued:
Any Warrants have been duly issued and allotted by the Company to their initial subscribers. |
| 8.2. | Shares duly authorised and issued:
Any Shares issued upon the exercise of a Warrant in accordance with the provisions of the
Conditions will be duly and validly authorised and issued (subject to payment by the Holder
of the relevant Exercise Price), and fully paid, and no further contributions in respect
of such Shares will be required, and such Shares will be free from all taxes, liens and charges
(other than liens or charges created by the Holder, income and other taxes incurred in connection
with the exercise of the Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). |
| 8.3. | Sufficient authority: The Company
will at all times reserve and keep available a sufficient authority (whether pursuant to
the authorised capital or otherwise on the basis of a decision by its general shareholders’
meeting) for the purpose of allowing for the exercise of the Warrants and the issuance of
the Shares issuable upon exercise of the Warrants pursuant to the Conditions. |
| 8.4. | Shareholder authority: The Company
has obtained all necessary shareholder and third party consents (which consents are subsisting
and remain sufficient and have not been revoked at the Issue Date) to allocate the Warrants
to the Holder pursuant to the Conditions. |
| 9.1. | Binding nature of the Conditions:
In the case of subscription for the Warrant, the subscriber shall be bound by, and deemed
to have accepted, the present Conditions. In the event of a transfer of the Warrant (or any
right thereto), the acquirer or transferee shall be bound by, and deemed to have accepted,
the present Conditions. |
| 9.2. | Severability: Whenever possible, the
provisions of the Conditions shall be interpreted in such a manner that they are valid and
enforceable under the applicable legislation. If any provision in these Conditions is held
to be illegal, invalid or unenforceable, in whole or in part, under any applicable law, then
such provision or part of it shall be deemed not to form part of these Conditions, and the
legality, validity or enforceability of the remainder of these Conditions shall not be affected.
In that event, the illegal, invalid or non-enforceable provision or part thereof is automatically
replaced with the legal, valid and enforceable provision that is the closest to the original
provision or part thereof as regards content, bearing and intention. |
| 9.3. | Expenses: The Company shall pay any
taxes, duties and/or expenses payable in connection with the issue or delivery of the Warrants.
The Company shall also pay all costs associated with the admission of the relevant Shares
to trading and listing pursuant to section 5.12. Notwithstanding the foregoing, the Holder
shall pay all taxes, duties and/or expenses, including any applicable depository charges,
transaction or exercise charges, stamp duty, stamp duty reserve tax, issue, registration,
securities transfer and/or other taxes or duties arising in connection with the exercise
or a transfer of Warrants. The Company shall not be liable for or otherwise obliged to pay
any tax, duty, withholding or other payment which may arise as a result of the ownership,
exercise or enforcement of Warrants, and all payments made by the Company shall be made subject
to any such tax, duty, withholding or other payment which may be required to be made, paid,
withheld or deducted. |
| 9.4. | Notices: Any notice, notification,
demand or other communication (“notice”) to be given under these Conditions
shall be in writing, shall specifically refer to these Conditions, and shall be addressed
to the appropriate party at the address specified below or such other address as may be specified
by such party in writing in accordance with this section 9.4, and shall be deemed delivered
and effective for all purposes: (i) when given personally; (ii) upon actual receipt if given
by electronic mail provided the sending party has not received an automated message indicating
that the e-mail delivery failed; or (iii) on the second (2nd) Business Day following
delivery to a reliable overnight courier service, courier fee prepaid and return receipt
requested. The current details for notices are: |
| (a) | if to the Company: the address of the
Company’s registered office, with the notice made for the attention of the General Counsel
of the Company, or the address for notices to the Company pursuant to the Subscription Agreement. |
| (b) | if to a Holder: to such Holder’s address
as set out in the warrant register book. |
| 9.5. | Governing law: The Conditions, the
Warrants and any non-contractual obligations arising out of or in connection with each of
them are governed by, and are to be construed in accordance with, Belgian law. |
| 9.6. | Competent court: These Conditions
and the rights and obligations of the Company and the Holder shall be subject to the exclusive
jurisdiction of courts within the city of Brussels (Belgium) in their territorial scope and,
if permitted by law, using the French language or, if not so permitted, using the Dutch language,
and shall be governed by and construed in accordance with Belgian substantive law (to the
exclusion of conflict of law rules and international treaties). |
Schedule
1
Form of Confirmation
| To: | [[name], a company organised and existing under the laws of [jurisdiction],
with registered office at [address] and registered with [applicable company register]
under number [number] [Drafting note: for legal entity]/[[name], of
[nationality], residing at [address] [Drafting note: for natural person]]
(the “Holder”) |
Re: Exact Sciences Warrants – Confirmation
Dear all,
The present letter (the “Confirmation”)
is sent on behalf of MDxHealth SA, a limited liability company (société anonyme) organised and existing under the
laws of Belgium, with registered office at CAP Business Center, Zone Industrielle des Hauts-Sarts, Rue d’Abhooz 31, 4040 Herstal, Belgium,
registered with the register for legal entities (registre des personnes morales) under number 0479.292.440 (RLP Liège,
division Liège) (the “Company”).
Reference is made to the Exact Sciences Warrants
that have been issued by the Company on [●], 2024 (the “Warrants”). Capitalised words and expressions used herein
will, unless otherwise defined herein, have the same meaning as in the terms and conditions of the Warrants (the “Conditions”).
The Company hereby confirms to the Holder that
on [date] the Holder was registered in the warrant register of the Company as the owner of [number] Warrants.
The aforementioned Warrants are in registered
form, and the present Confirmation does not constitute a bearer instrument incorporating any rights to the aforementioned Warrants, and
does not confer any rights to the Warrants.
On behalf of the Company:
| By: |
|
|
| |
Name: |
[●] |
|
| |
Title: |
[●] |
|
| |
Date: |
[●] |
|
Schedule
2
Form of Exercise Notice
| To: | MDxHealth SA
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal
Belgium |
Re: Exact Sciences Warrants – Exercise Notice
Dear all,
The present letter (the “Exercise Notice”)
is sent on behalf of [[name], a company organised and existing under the laws of [jurisdiction], with registered office
at [address] and registered with [applicable company register] under number [number] [Drafting note: for legal
entity]/[[name], of [nationality], residing at [address] [Drafting note: for natural person]] (the “Holder”).
Reference is made to the Exact Sciences Warrants
that have been issued by MDxHealth SA, a limited liability company (société anonyme) organised and existing under
the laws of Belgium, with registered office at CAP Business Center, Zone Industrielle des Hauts-Sarts, Rue d’Abhooz 31, 4040 Herstal,
Belgium, registered with the register for legal entities (registre des personnes morales) under number 0479.292.440 (RLP Liège,
division Liège)) (the “Company”) on [●], 2024 (the “Warrants”). Capitalised words and
expressions used herein will, unless otherwise defined herein, have the same meaning as in the terms and conditions of the Warrants (the
“Conditions”).
The Holder hereby:
| 1. | notifies the Company that it irrevocably and
unconditionally exercises [number] Warrant[s] and subscribes for [number] new
Shares in accordance with the Conditions; |
| 2. | requests that the Company confirms the details
of the Exercise Account as soon as practicably possible via email to [email address]; |
| 3. | confirms it shall pay the aggregate amount
of the Exercise Price of the Warrants exercised, being USD [●] by means of a wire
transfer of such amount in immediately available funds in USD to the Exercise Account; |
| 4. | undertakes to fill in and sign any additional
document that may be reasonably requested by the Company to proceed with the issuance of
the [number] new Shares and the related capital increase; |
| 5. | provides to the Company the representations,
warranties, agreements, covenants, undertakings and acknowledgements set out in section 7
of the Conditions as at the date of the present Exercise Notice; |
| 6. | the Shares to be issued as a result of the
exercise of the Warrants are to be delivered to an account in the name of the Holder and
recorded in the component of the Company’s share register that is maintained in the United
States with the Company’s transfer agent and registrar in the United States, in accordance
with the following instructions: |
| |
Name of the Holder: |
[●] |
|
| |
Address of the Holder: |
[●] |
|
On behalf of the Holder:
| By: |
|
|
| |
Name: |
[●] |
|
| |
Title: |
[●] |
|
| |
Date: |
[●] |
|
11
Exhibit 99.11
English translation - For information purposes
only
MDXHEALTH
Limited Liability Company
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal
Belgium
Registered with the Register of Legal Persons
VAT BE 0479.292.440 (RLP Liège, division Liège)
Report
of the Board of Directors
in
accordance with ARTICLES 7:180, 7:191 and 7:193 of the Belgian
Companies AND ASSOCIATIONS Code
On May 1, 2024, MDxHealth SA (the “Company”)
entered into a credit agreement, as guarantor, with MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and ORC SPV
LLC, as lender and administrative agent, pursuant to which ORC SPV LLC agreed to provide a five-year senior secured credit facility in
an aggregate principal amount of up to USD 100 million (this agreement as amended or otherwise modified from time to time, the “Credit
Agreement”). Furthermore, pursuant to the Credit Agreement, the Company has committed to issue to the benefit of certain affiliates
of ORC SPV LLC, namely OrbiMed Royalty & Credit Opportunities IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP
(together referred to herein as “OrbiMed”), 1,243,060 new subscription rights for new shares of the Company, each exercisable
for 1 new share of the Company with a 5 years term as from their issue date (of those 1,243,060 new subscription rights for shares, 881,906
new subscription rights for shares are to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV, LP and 361,154 new
subscription rights for shares are to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP) (the “OrbiMed
Warrants”).
In this context, the board of directors
submits to the extraordinary general shareholders’ meeting of the Company convened on May 30, 2024 (or at any other subsequent date, should
the legally required attendance quorum not be met at such meeting) (the “EGM”) the proposal to issue 1,243,060 OrbiMed
Warrants under the conditions described below in this report, and to dis-apply, in the interest of the Company, the statutory preferential
subscription right of the existing shareholders of the Company and, to the extent necessary, of the Company’s existing holders of subscription
rights (share options), to the benefit of OrbiMed, as provided for in the Credit Agreement (the proposed issuance of OrbiMed Warrants,
the “Transaction”).
Shareholders should note that the OrbiMed
Warrants are complex instruments and that OrbiMed could benefit from a significant discount when subscribing for new shares by virtue
of the potential exercise of the OrbiMed Warrants, as described below.
The OrbiMed Warrants are subscription
rights within the meaning of articles 7:67 et seq. of the Belgian Companies and Associations Code of 23 March 2019 (as amended from time
to time) (the “Belgian Companies and Associations Code”).
English translation - For information
purposes only
For the purposes of the Transaction,
this report has been prepared by the board of directors of the Company, in accordance with articles 7:180, 7:191 and 7:193 of the Belgian
Companies and Associations Code, in connection with the proposal of the board of directors to issue the OrbiMed Warrants and to dis-apply,
in the interest of the Company, the statutory preferential subscription right of the existing shareholders of the Company and, to the
extent necessary, of the Company’s existing holders of subscription rights (share options), to the benefit of OrbiMed.
In accordance with article 7:180 of
the Belgian Companies and Associations Code, the board of directors provides in this report a justification of the proposed Transaction,
including a justification of the proposed exercise price of the OrbiMed Warrants, and a description of the consequences of the proposed
Transaction for the financial and shareholder rights of the shareholders of the Company.
In accordance with article 7:191 of
the Belgian Companies and Associations Code, the board of directors also provides in this report a justification of the proposal to dis-apply,
in the interest of the Company, the statutory preferential subscription right of the existing shareholders of the Company and, to the
extent necessary, of the Company’s existing holders of subscription rights (share options) in connection with the capital increase proposed
in the Transaction and a description of the consequences thereof for the financial and shareholder rights of the shareholders of the Company.
In accordance with article 7:193 of
the Belgian Companies and Associations Code, the justification of the proposed Transaction and the proposed exercise price of the OrbiMed
Warrants shall take into account in particular the financial situation of the Company, the identity of OrbiMed and the nature and size
of OrbiMed’s contribution.
This report must be read together with
the report prepared in accordance with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations Code by the Company’s
statutory auditor, BDO Réviseurs d’Entreprises SRL, a limited liability company organised and existing under the laws of Belgium,
with registered office at Da Vincilaan 9, 1930 Zaventem, Belgium, represented by Mr. Bert Kegels.
Founded in 1989, OrbiMed Advisors
LLC (of which OrbiMed Royalty & Credit Opportunities IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP are two
affiliates) is a global investment firm that invests in companies engaged in the discovery and development of biopharmaceutical products,
medical technologies, medical devices, diagnostics, drug discovery tools, and healthcare information technology and services companies.
OrbiMed is headquartered in New York.
On May 1, 2024, the Company entered
into the Credit Agreement, as guarantor, with MDxHealth, Inc., a wholly-owned subsidiary of the Company, as borrower, and ORC SPV LLC,
as lender and administrative agent, pursuant to which ORC SPV LLC agreed to provide a five-year senior secured credit facility in an aggregate
principal amount of up to USD 100 million, of which (i) USD 55 million was advanced on the date of closing, (ii) USD 25
million will be made available, at MDxHealth, Inc.’s discretion, on or prior to March 31, 2025, subject to certain net revenue requirements
and other customary conditions, and, (iii) USD 20 million will be made available, at MDxHealth, Inc.’s discretion, on or prior
to March 31, 2026, subject to certain net revenue requirements and other customary conditions.
English
translation - For information purposes only
All obligations under the Credit Agreement
will be guaranteed by the Company and all of the Company’s subsidiaries (other than MDxHealth, Inc. and subject to certain exceptions)
and secured by substantially all of MDxHealth, Inc.’s and each guarantor’s assets. If, for any quarter until the maturity
date of the loan facility, the Company’s net revenue does not equal or exceed the applicable trailing twelve-month amount as set
forth in the Credit Agreement, then, subject to certain exceptions specified in the Credit Agreement, MDxHealth, Inc. shall repay in equal
monthly instalments the outstanding principal amount of the loan facility commencing on the last day of the immediately succeeding full
month thereto, together with accrued interest on the amount so repaid and a repayment premium and other fees. MDxHealth, Inc. shall repay
amounts outstanding under the loan facility in full immediately upon an acceleration as a result of an event of default as set forth in
the Credit Agreement, together with a repayment premium and other fees. During the term of the loan facility, the interest payable in
cash by MDxHealth, Inc. shall accrue on any outstanding amounts under the loan facility at a rate per annum equal to the greater of (x)
the secured overnight financing rate (“SOFR”) for such period and (y) 2.50% plus, in either case, 8.50%. During an event of
default, any outstanding amount under the loan facility will bear interest at a rate of 4.00% in excess of the otherwise applicable rate
of interest.
Pursuant to the Credit Agreement, the
Company has committed to issue, to the benefit of OrbiMed, 1,243,060 new subscription rights for new shares of the Company (each exercisable
for 1 new share of the Company at an exercise price per new share of USD 2.4134) with a 5 years term as from their issue date, such
issuance having to be submitted for approval by an extraordinary general shareholders’ meeting of the Company to be convened (which is
the reason why the present report has been prepared). The principal terms and conditions of the OrbiMed Warrants are summarized in paragraph
3.1 below.
| 2.2. | Proposed issuance of the OrbiMed Warrants |
As indicated above,
in the context of the Credit Agreement, the Company has undertaken to ORC SPV LLC to issue the OrbiMed Warrants to the benefit of OrbiMed.
In view hereof, the board of directors of the Company has undertaken to propose to the shareholders of the Company, in the context of
the EGM, to approve the issuance by the Company, to the benefit of OrbiMed, of the OrbiMed Warrants.
The Company and ORC
SPV LLC have agreed that the issuance of the OrbiMed Warrants to OrbiMed was essential for ORC SPV LLC to enter into the Credit Agreement.
Furthermore, in the event that the EGM does not approve the proposed issuance of the OrbiMed Warrants, the Company may be in breach of
its obligations under the Credit Agreement.
| 3.1. | Terms and Conditions of the OrbiMed Warrants |
The draft terms and conditions of
the OrbiMed Warrants are set out in Annex A to this report of the board of directors (the “OrbiMed Warrants Terms
and Conditions”). The principal terms and conditions of the OrbiMed Warrants can, for information purposes, be summarised
as follows:
| ● | Issuer: The Company (MDxHealth SA). |
| ● | Right to subscribe for one ordinary share: Each OrbiMed Warrant entitles its holder to subscribe
for one (1) ordinary share of the Company to be issued by the Company. |
| ● | Exercise price: The exercise price of the OrbiMed Warrants (i.e., the price to be paid in cash
to subscribe for one new share in the Company when an OrbiMed Warrant is exercised) will be USD 2.4134. The exercise price is subject
to potential customary downward adjustments in the case of certain dilutive actions of the Company. |
English translation - For information purposes only
| ● | Subscription price: The subscription price for the 881,906 OrbiMed Warrants to be issued for the
benefit of OrbiMed Royalty & Credit Opportunities IV, LP will be USD 1,744,485.56, and the subscription price for the 361,154
OrbiMed Warrants to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV Offshore, LP will be USD 714,394.11.
The subscription price shall be booked as issue premium (in accordance with what is stated below). |
| ● | Term: The OrbiMed Warrants will have a term of 5 years as from their issue date. |
| ● | Exercisability: The exercise of the OrbiMed Warrants will be subject to the terms and conditions
contained in the OrbiMed Warrants Terms and Conditions. The OrbiMed Warrants may be exercised as from their issuance and until the end
of their term. |
| ● | Nature of the shares issued upon exercise: Each OrbiMed Warrant will entitle its holder to subscribe
for one new share to be issued by the Company. The new shares to be issued upon exercise of the OrbiMed Warrants shall have the same rights
and benefits as, and rank pari passu in all respects including as to entitlements to dividends and other distributions, with the
existing and outstanding shares of the Company at the moment of their issuance and will be entitled to dividends and other distributions
in respect of which the relevant record date or due date falls on or after the date of their issuance. |
| ● | Increase of the share capital and allocation of the exercise price: Upon exercise of the OrbiMed
Warrants and the issuance of new shares, the aggregate amount of the exercise price of the OrbiMed Warrants will be allocated to (as the
case may be, following conversion into the Company’s share capital currency, on the basis of the relevant USD/EUR exchange ratio as shall
be published by the European Central Bank (“ECB”), as provided for in section 4(b) of the OrbiMed Warrants Terms and
Conditions) the share capital of the Company. To the extent that the amount of the exercise price of the OrbiMed Warrants, per share to
be issued upon exercise of the OrbiMed Warrants, exceeds the fractional value of the then existing shares of the Company existing immediately
prior to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon exercise of the OrbiMed Warrants,
equal to such fractional value shall be booked as share capital, whereby the balance shall be booked as issue premium. Following the capital
increase and issuance of new shares, each new and existing share shall represent the same fraction of the share capital of the Company. |
| ● | Transferability: The OrbiMed Warrants and all rights thereunder are transferable, in whole or in
part, by the relevant holder in accordance with the OrbiMed Warrants Terms and Conditions. |
| ● | Form: The OrbiMed Warrants will be issued in registered form and cannot be dematerialised. |
| ● | Ownership cap: It was also agreed that the Company shall not knowingly effect the exercise of an
OrbiMed Warrant, and a holder shall not have the right to exercise an OrbiMed Warrant to the extent that, after giving effect to such
exercise, such holder would beneficially own in excess of 9.99% of the outstanding shares of the Company immediately after giving effect
to such exercise. The shares issued in favour of OrbiMed upon exercise of the OrbiMed Warrants would only reflect 4.56% of the 27,288,093
outstanding shares of the Company. |
English translation - For information
purposes only
| 3.2. | Dis-application of the statutory preferential subscription right of existing shareholders |
In the context of the proposed Transaction,
the board of directors proposes to the EGM to dis-apply the statutory preferential subscription right of the Company’s existing shareholders
and, to the extent necessary, of the Company’s existing holders of subscription rights (share options), in accordance with article 7:193
of the Belgian Companies and Associations Code, to the benefit of OrbiMed.
OrbiMed is not a member of the Company’s
personnel within the meaning of article 1:27 of the Belgian Companies and Associations Code.
The dis-application of the statutory
preferential subscription right of the existing shareholders and, to the extent necessary, of the Company’s existing holders of subscription
rights (share options), is necessary in order to allow the Company to issue the OrbiMed Warrants, as agreed in the Credit Agreement.
| 3.3. | Subscription and exercise price |
As indicated above, the subscription
price for the 881,906 OrbiMed Warrants to be issued for the benefit of OrbiMed Royalty & Credit Opportunities IV, LP will be USD 1,744,485.56,
and the subscription price for the 361,154 OrbiMed Warrants to be issued for the benefit of OrbiMed Royalty & Credit Opportunities
IV Offshore, LP will be USD 714,394.11. The subscription price shall be booked as issue premium (in accordance with what is stated
below).
Furthermore, the OrbiMed Warrants, may
be exercised at an exercise price of USD 2.4134 per new share (subject to potential customary downward adjustments in the case of
certain dilutive actions of the Company). Subject to, and in accordance with, the respective provisions of the OrbiMed Warrants Terms
and Conditions, upon exercise of the OrbiMed Warrants and the issuance of new shares, the aggregate amount of the exercise price of the
OrbiMed Warrants will be allocated to (as the case may be, following conversion into the Company’s share capital currency, on the basis
of the relevant USD/EUR exchange ratio as shall be published by the ECB, as provided for in section 4(b) of the OrbiMed Warrants Terms
and Conditions) the share capital of the Company. To the extent that the amount of the exercise price of the OrbiMed Warrants, per share
to be issued upon exercise of the OrbiMed Warrants, exceeds the fractional value of the then existing shares of the Company existing immediately
prior to the issue of the new shares concerned, a part of the exercise price, per share to be issued upon exercise of the OrbiMed Warrants,
equal to such fractional value shall be booked as share capital, whereby the balance shall be booked as issue premium. Following the capital
increase and issuance of new shares, each new and existing share shall represent the same fraction of the share capital of the Company.
Any issue premium that will be booked
in connection with the OrbiMed Warrants (whether as subscription price, upon exercise of the OrbiMed Warrants, or otherwise) will be accounted
for on a non-distributable account on the liabilities side of the Company’s balance sheet under its net equity, and the account on which
the issue premium will be booked shall, like the share capital, serve as a guarantee for third parties and can only be reduced on the
basis of a lawful resolution of the general shareholders’ meeting passed in the manner required for an amendments to the Company’s articles
of association.
| 3.4. | Rights attached to the new shares to be issued upon exercise of the OrbiMed Warrants |
As mentioned above, the new shares to
be issued upon exercise of the OrbiMed Warrants shall have the same rights and benefits as, and rank pari passu in all respects
including as to entitlements to dividends and other distributions, with the existing and outstanding shares at the moment of their issue
and will be entitled to dividends and other distributions in respect of which the relevant record date or due date falls on or after the
date of their issue.
English translation - For information
purposes only
| 4. | Justification of the proposed Transaction |
The board of directors believes that
the Transaction is in the interest of the Company because, first and foremost, the Credit Agreement, of which the Transaction is a part,
enabled the Company to receive new financial resources and allowed the Company to replace its existing loan agreement with an affiliate
of Innovatus Capital Partners, LLC. If the OrbiMed Warrants are not issued to OrbiMed, as provided for in the Credit Agreement, the Company
could be in breach of its undertakings pursuant to the Credit Agreement.
Furthermore, the subscription price
for the OrbiMed Warrants will give the Company access to funding in an amount of USD 2,458,879.67. In addition, although there can
be no guarantee that the OrbiMed Warrants will ultimately be exercised, the exercise of the OrbiMed Warrants and the payment of the corresponding
exercise price of the OrbiMed Warrants as the case may be, will provide the Company with additional cash, which can be used to further
finance the Company’s activities and strengthen its balance sheet.
The board of directors is aware that
the issue of the OrbiMed Warrants may result in additional dilution for shareholders. However, the dilution will depend on the actual
exercise of the OrbiMed Warrants. In any event, the board of directors believes this potential dilution does not outweigh a scenario in
which the Company would have not entered into the Credit Agreement and would have not obtained the new financial resources under the Credit
Agreement.
For all of the above reasons, the board
of directors believes that the proposed Transaction is in the interest of the Company, its shareholders, and other stakeholders. The
board of directors therefore recommends that the EGM approves the issuance of the OrbiMed Warrants.
| 5. | justification of the subscription price and exercise price of the OrbiMed Warrants |
Pursuant to the OrbiMed Terms and Conditions,
the 881,906 OrbiMed Warrants will be granted to OrbiMed Royalty & Credit Opportunities IV, LP for an aggregate subscription price
of USD 1,744,485.56, and the 361,154 OrbiMed Warrants will be granted to OrbiMed Royalty & Credit Opportunities IV Offshore,
LP for an aggregate subscription price of USD 714,394.11.
The aggregate subscription price of
the OrbiMed Warrants was determined by the board of directors following negotiations with ORC SPV LLC. The negotiation process was conducted
objectively and independently.
The exercise price of the OrbiMed Warrants
of USD 2.4134, which is subject to potential customary downward adjustments in case of certain dilutive actions of the Company (representing
the share capital of the Company for the amount equal to the fractional value and the issue premium for the amount in excess of the fractional
value), was determined by the board of directors following negotiations with ORC SPV LLC. The negotiation process was conducted objectively
and independently. The exercise price has been determined on the basis of the volume-weighted average trading price of the Company’s shares
that were traded on Nasdaq ten days before May 1, 2024, i.e. the day on which the Credit Agreement was signed.
Whether or not an OrbiMed Warrant will
be exercised depends on the (sole) decision of OrbiMed. Such decision will depend on the price of the Company’s shares at the moment of
the decision whether or not to exercise as compared with the exercise price of the OrbiMed Warrants, since essentially, OrbiMed can realise
a capital gain at the exercise of the OrbiMed Warrants if the price of the Company’s shares at that moment is higher than the exercise
price of the OrbiMed Warrants (not taking into account the possible tax related costs and assuming that OrbiMed can sell the underlying
share at such price on the market).
English translation - For information
purposes only
Finally, it should also be noted that
the Company reserves the right to carry out certain transactions involving its capital or similar transactions. In such cases, however,
the exercise price may have to be adjusted and reduced in accordance with the anti-dilution protection mechanisms set out in the OrbiMed
Warrants Terms and Conditions. In the event of an adjustment of the exercise price of the OrbiMed Warrants, the number of shares issuable
upon exercise of the OrbiMed Warrants will be adjusted proportionately, so that after the adjustment the total exercise price payable
for the increased number of shares will be the same as before the adjustment. These adjustment mechanisms are customary for securities
such as OrbiMed Warrants. They also comply with the principle set out in article 7:71 of the Belgian Companies and Associations Code.
Therefore, taking into account all of
the above, the board of directors is of the opinion that the subscription price and the exercise price of the OrbiMed Warrants are not
unreasonable and can be sufficiently justified, and that they are in the interest of the Company, the existing shareholders, the existing
holders of subscription rights (share options) of the Company, and other stakeholders.
| 6. | Justification of the dis-application of the statutory preferential subscription right |
In the context of the envisaged Transaction
as described above, the board of directors proposes to the EGM to dis-apply the statutory preferential subscription right of the existing
shareholders of the Company and, to the extent necessary, of the existing holders of subscription rights (share options) of the Company
in accordance with articles 7:191 and 7:193 of the Belgian Companies and Associations Code, to the benefit of each of OrbiMed Royalty
& Credit Opportunities IV, LP and OrbiMed Royalty & Credit Opportunities IV Offshore, LP.
The dis-application of the statutory
preferential subscription right of the existing shareholders and, to the extent necessary, of the existing holders of subscription rights
(share options), is necessary to enable the Company to issue the OrbiMed Warrants in accordance with the Credit Agreement.
The Company’s undertaking to submit
the issuance of the OrbiMed Warrants to the EGM was one of the key elements that allowed the Company to enter into the Credit Agreement.
This enabled the Company to receive new financial resources to further finance its activities, as set out in paragraph 4 above.
If the OrbiMed Warrants are not issued
to OrbiMed, as provided for in the Credit Agreement, the Company could be in breach of its undertakings pursuant to the Credit Agreement,
and such default could require the Company to reimburse the loan (in addition to other consequences).
For all the above reasons, the board
of directors is of the opinion that the proposed issuance of the OrbiMed Warrants, with dis-application of the statutory preferential
subscription right to the benefit of OrbiMed and notwithstanding the dilution resulting from the potential exercise of the OrbiMed Warrants
for the shareholders and, as the case may be, the holders of subscription rights (share options), is in the interest of both the Company
and existing shareholders and holders of subscription rights (share options), and other stakeholders, since it allowed the Company to
enter into the Credit Agreement.
English translation - For information
purposes only
| 7. | Certain financial consequences |
| 7.1. | Introductory comments |
The following paragraphs provide an
overview of certain financial consequences of the potential exercise of the OrbiMed Warrants. For further information with regard to the
financial consequences of the potential exercise of the OrbiMed Warrants, reference is also made to the report prepared in accordance
with articles 7:180, 7:191 and 7:193 of the Belgian Companies and Associations Code by the statutory auditor of the Company, BDO Réviseurs
d’Entreprises SRL.
Whether or not new shares are issued
pursuant to the exercise of the OrbiMed Warrants will depend on whether or not the OrbiMed Warrants are exercised by OrbiMed.
Likewise, the actual financial consequences
resulting from the exercise or conversion for shares of the other outstanding and proposed new dilutive instruments of the Company cannot
yet be determined with certainty.
| |
Accordingly, the discussion herein of the financial consequences of the proposed issuance and exercise of the OrbiMed Warrants for existing shareholders is purely illustrative and hypothetical, and is based on purely indicative financial parameters (where relevant) |
Subject to the foregoing reservations,
for the purposes of the illustration of some of the financial consequences of the exercise of the OrbiMed Warrants and notably the dilution
for the shareholders, the following parameters and assumptions were used:
| (a) | Exchange Rate1:
For the purpose of the simulations and illustrations below, the following exchange rate is
used: USD 1.0743 for 1 EUR, which is the exchange rate as published by the ECB on https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html
on May 8, 2024 (the “Exchange Rate”). |
| (b) | Current share capital: At the date of this report, the share capital of the Company amounts to
EUR 164,302,752.89 represented by 27,288,093 shares without nominal value, each representing the same fraction of the share capital,
i.e., (rounded) EUR 6.021. The share capital is entirely and unconditionally subscribed for and is fully paid-up. |
| (c) | The Transaction: In order to illustrate the maximum potential dilutive effects of the Transaction
below, it is assumed that the 1,243,060 OrbiMed Warrants are issued and all exercised, for a total of 1,243,060 newly issued shares at
an issue price of USD 2.4134 per new shares, resulting in a total issue price of USD 3,000,001.00, or, applying the Exchange
Rate, at an issue price of EUR 2.24 (rounded) per new shares, resulting in a total issue price of EUR 2,784,454.40 (including
issue premium, if any). It is also assumed that the aggregate subscription price for the OrbiMed Warrants is paid in full upon issuance
and subscription of the OrbiMed Warrants. |
| 1 | The Company’s shares are listed on Nasdaq, where they are traded in USD.
However, the Company’s share capital is currently expressed in EUR. In view of the current difference between the Company’s shares trading
currency and the Company’s share capital currency, except for amounts in the financial dilution simulations in paragraph 7.4 below, all
amounts in USD used in the simulations herein are converted in EUR on the basis of the Exchange Rate. |
English translation - For information
purposes only
| (d) | Share Options: Furthermore, the following 18,388,230 subscription rights issued by the Company
are still outstanding at the date of this report (the “Share Options”): |
| (i) | 522,500 outstanding share options issued under the form of subscription rights on June 23, 2014
(“2014 Share Options”) (of which 68,500 share options have not yet been granted)2; |
| (ii) | 1,866,000 outstanding share options issued under the form of subscription rights on June 19,
2017 (“2017 Share Options”) (which have all been granted); |
| (iii) | 2,632,860 outstanding share options issued under the form of subscription rights on June 21,
2019 (“2019 Share Options”) (of which 1,500 share options have not yet been granted); |
| (iv) | 3,525,000 outstanding share options issued under the form of subscription rights on May 27, 2021 (“2021
Share Options”) (which have all been granted); |
| (v) | 4,851,870 outstanding share options issued under the form of subscription rights on May 25, 2022 (“2022
Share Options”) (of which 2,500 share options have not yet been granted); and |
| (vi) | 4,990,000 outstanding share options issued under the form of subscription rights on June 30, 2023 (“2023
Share Options”) (of which 1,960,000 share options have not yet been granted). |
Each of the aforementioned Share Options
entitles the holders thereof to subscribe for one new share of the Company upon exercise of the relevant Share Option. For the purpose
of the full-dilution scenario calculations further below, it is assumed that all of the 18,388,230 outstanding Share Options (including
the 68,500 outstanding 2014 Share Options, the 1,500 outstanding 2019 Share Options, the 2,500 outstanding 2022 Share Options and the
1,960,000 outstanding 2023 Share Options that can still be granted) have been effectively granted, have vested and are exercisable. On
that basis, if all 18,388,230 Share Options were exercised, 1,838,823 new shares would need to be issued by the Company.
| (e) | Exact Sciences Earn-Out Consideration: On August 2, 2022, the Company entered into an asset purchase
agreement with Genomic Health, Inc. (a subsidiary of Exact Sciences Corporation referred to herein as “Exact Sciences”),
pursuant to which, among other things and subject to the terms and conditions included in the asset purchase agreement, Exact Sciences
agreed to sell and assign, and the Company agreed to purchase and assume, the business of developing, marketing and performing the Oncotype
DX Genomic Prostate Score test (the “GPS Test Business”) for an aggregate purchase price of up to USD 100,000,000.00
to be paid as follows: (i) an amount of USD 24,999,999.64, which was paid on the date of the asset purchase agreement, (ii) an amount
of USD 5,000,000.36, which was contributed in kind by Exact Sciences to the Company on August 11, 2022, within the context of a capital
increase by the Company within the framework of the authorised capital of the Company against the issuance by the Company of 6,911,710
new shares, and (iii) an additional aggregate earn-out amount of up to USD 70,000,000.00. On August 23, 2023, the Company and Exact
Sciences entered into an amendment to the asset purchase agreement (as further amended on October 9, 2023), pursuant to which they agreed
to defer the payment of the up to USD 70,000,000.00 earn-out amount, in consideration of (i) the increase and replacement of the
up to USD 70,000,000.00 earn-out amount by an aggregate earn-out amount of up to USD 82,500,000.00 to be paid by the Company to Exact
Sciences upon achievement of certain revenue milestones related to fiscal years 2023 through 2025, with the maximum earn-out payable in
relation to 2023 and 2024 not to exceed USD 30,000,000.00 plus USD 10,000,000.00 (or such lesser amount if the maximum earn-out amount
required to be paid exceeds USD 82,500,000.00 in the aggregate) and USD 40,000,000.00, respectively (the “Exact Sciences Earn-Out
Consideration”), (ii) the payment of an additional cash consideration of USD 250,000 (paid on August 23, 2023), (iii) the contribution
in kind (completed on October 20, 2023) of an amount of USD 877,500.00, within the context of a capital increase by the Company within
the framework of the authorised capital of the Company against the issuance by the Company of 2,500,000 new shares, and (iv) the commitment
by the Company to issue to the benefit of Exact Sciences the Exact Sciences Warrants (as defined below). At the option of the Company,
amounts reflecting the Exact Sciences Earn-Out Consideration can be settled in cash or through the issuance of additional shares of the
Company by contribution in kind of the relevant receivables due by the Company (at an issue price per share valued in function of a volume
weighted average trading price of the Company’s shares at the end of the relevant earn-out period) to be delivered to Exact Sciences,
provided that the aggregate number of shares held by Exact Sciences shall not exceed more than 7.5% of the outstanding shares of the Company. |
| 2 | All 2014 Share Options that are not exercised by June 23, 2024 will automatically lapse and become null and void. |
English translation - For information purposes
only
For the purpose of the full-dilution scenario
calculations further below, it is assumed that the full Exact Sciences Earn-Out Consideration amount of USD 82,500,000.00 is converted,
by applying the Exchange Rate (see paragraph 7.1(a)), into EUR 76,794,191.56 and is fully paid in kind by the Company to Exact Sciences
by the issuance of new shares of the Company, at an issue price per share of USD 3.00 (i.e., the closing price of the Company’s shares
on Nasdaq on May 8, 2024) or, applying the Exchange Rate, at an issue price per share of EUR 2.79, in consideration of the
settlement through a contribution in kind of receivables due by the Company to Exact Sciences up to the Exact Sciences Earn-Out Consideration.
To reflect maximum dilution, the maximum 7.5% shareholding cap (as described above) is not taken into account in the simulations below.
Should this 7.5% shareholding cap be applied, only 3,528,875 shares could be issued to Exact Sciences on a fully diluted basis, taking
into account the most dilutive parameters used herein.
| (f) | Exact Sciences Warrants: In the context of the amendment to the asset purchase agreement with Exact
Sciences (as described in paragraph 7.1(e) above), the Company has committed to issue to the benefit of Exact Sciences, 1,000,000 new
subscription rights for new shares of the Company (each exercisable for 1 new share of the Company at an exercise price per new share
of USD 5.265) with a term until August 22, 2028 (the “Exact Sciences Warrants”). The proposed issuance of the Exact
Sciences Warrants will be submitted for approval by the same extraordinary general shareholders’ meeting of the Company as the one that
will need to decide on the issuance of the OrbiMed Warrants. |
For the purpose of the
full dilution scenario calculations further below, it is assumed that the 1,000,000 Exact Sciences Warrants are issued and all exercised,
for a total of 1,000,000 newly issued shares at an issue price of USD 5.265 per new shares, resulting in a total issue price of USD 5,265,000,
or, applying the Exchange Rate, at an issue price of EUR 4.900 per shares, resulting in a total issue price of EUR 4,900,000
(including issue premium, if any).
| (g) | ATM Facility: On April 30, 2024, the Company entered into a sales agreement with TD Securities
(USA) LLC (“TD Cowen”) with respect to an equity offering program under which the Company may offer and place new shares,
via TD Cowen and through various placements from time to time in an “at the market offering”, as defined in Rule 415 promulgated
under the Securities Act of 1933, as amended, and the rules and regulations thereunder, for an aggregate maximum offering amount of USD
50,000,000 (the “ATM Facility”). The actual number of new shares
to be issued in the framework of the ATM Facility will vary depending on the effective placements of new shares and on the price for each
such placements. However the number of new shares to be issued in the framework of the ATM Facility shall not exceed 100,000,000
shares. Such new shares will be placed at a final subscription price per new
share in function of the then current USD market prices on Nasdaq at the time of the relevant placements, while such issue price cannot
be lower than USD 0.50. |
English translation - For information purposes
only
For the purpose of
the full-dilution scenario calculations further below, it is assumed that (i) new shares are issued under the ATM Facility for the
full amount of USD 50,000,000.00, and (ii) all such new shares issued under the ATM Facility are issued at an issue price per
share of USD 3.00 (i.e., the closing price of the Company’s shares on Nasdaq on May 8, 2024). On that basis, applying the Exchange
Rate, EUR 46,541,934.28 would be raised by the Company against the issuance of 16,681,696 new shares of the Company at an issue
price of EUR 2.79 per share.
| (h) | Allocation of the issue price of the outstanding dilutive instruments: Upon the issuance of new
shares upon exercise of the Exact Sciences Warrants (should their issuance be approved by an extraordinary general shareholders’ meeting
of the Company), and/or the full placement of the ATM Facility, and/or the contribution of the Exact Sciences Earn-Out Consideration,
and/or the exercise of the Share Options, the amount of the issue price of the relevant new shares will be booked as equity (in the form
of share capital and issue premium, as the case may be). The amount that shall be booked as share capital shall, on a per share basis,
be equal to the amount of the applicable fractional value of the Company’s shares at the relevant time. The balance, as the case may be,
shall be booked as issue premium. |
In this report, when
reference is made to “outstanding dilutive instruments”, it refers, respectively, to the issuance of new shares upon
exercise of the Exact Sciences Warrants, the full placement of the ATM Facility, the contribution of the Exact Sciences Earn-Out Consideration
and the exercise of the outstanding Share Options.
Whether the OrbiMed
Warrants (assuming their issuance will be approved by an extraordinary general shareholders’ meeting of the Company), the outstanding
Share Options or Exact Sciences Warrants (assuming their issuance will be approved by an extraordinary general shareholders’ meeting of
the Company) will be effectively exercised will ultimately depend on the decision of the respective holders thereof. Such decision will
likely be in function of the market price of the shares of the Company at the moment of exercise or conversion, compared to their respective
exercise prices. The respective holders will likely not exercise if the market price of the shares of the Company is less than the relevant
exercise price.
Whether the Exact
Sciences Earn-Out Consideration amount is due and converted into shares of the Company will depend on the fulfilment (or not) of the respective
conditions provided by the asset purchase agreement, as amended from time to time. Furthermore, should an Exact Sciences Earn-Out Consideration
amount be due by the Company to Exact Sciences, the Company can also ultimately opt to pay such Exact Sciences Earn-Out Consideration
amount in cash rather than in shares.
Whether the full USD 50,000,000 amount
is placed by the Company under the ATM Facility, the applicable issue prices for such placements and the total number of new shares issued
under the ATM Facility will depend on the ultimate decision of the Company to proceed with such placements, the terms at which such placements
are made (including the relevant USD market prices on Nasdaq used as reference
to determine the relevant issue prices) and whether such placements are successful or not.
English translation - For information purposes only
| 7.2. | Evolution of the share capital, voting power, participation in the results and other shareholder rights |
Each share in the Company currently
represents an equal part of the share capital of the Company and provides for one vote in function of the part of the capital it represents.
The issuance of the new shares upon exercise of the OrbiMed Warrants (provided that the OrbiMed Warrants are issued to the benefit of
OrbiMed) will lead to a dilution of the existing shareholders of the Company and of the relative voting power of each share in the Company.
The dilution relating to the voting
right also applies, mutatis mutandis, to the participation of each share in the profit and liquidation proceeds and other rights
attached to the shares of the Company, such as the statutory preferential subscription right in case of a capital increase in cash through
the issuance of new shares or in case of the issuance of new subscription rights or convertible bonds.
Specifically, prior to the issuance
of new shares upon exercise of the OrbiMed Warrants (and prior to the issuance of new shares pursuant the other outstanding dilutive instruments),
each share of the Company participates equally in the profit and liquidation proceeds of the Company and each shareholder has a statutory
preferential subscription right in case of a capital increase in cash or in case of the issuance of new subscription rights or convertible
bonds. In case of the issuance of the new shares upon exercise of the OrbiMed Warrants (provided that the OrbiMed Warrants are issued
to the benefit of OrbiMed), the new shares to be issued will have the same rights and benefits as, and rank pari passu in all respects
with, the existing and outstanding shares of the Company at the moment of their issuance and delivery, and will be entitled to dividends
and other distributions in respect of which the relevant record date or due date falls on or after the date of issuance and delivery of
the new shares. As a result (and to the extent the new shares will be issued and subscribed for pursuant to the exercise of the OrbiMed
Warrants), the participation by the existing shareholders in the profit and liquidation proceeds of the Company and their holders’ statutory
preferential subscription right in case of a capital increase in cash, shall be diluted accordingly.
A similar dilution occurs upon exercise
or conversion of the other outstanding dilutive instruments.
Furthermore, in accordance with article
7:178 of the Belgian Companies and Associations Code, after the completion of the issuance of the new shares upon exercise of the OrbiMed
Warrants, all of the Company’s outstanding shares will have the same (as the case may be adjusted) fractional value.
Subject to the methodological reservations
noted in paragraph 7.1, the evolution of the share capital and the number of shares, with voting rights attached thereto, of the Company
as a result of the proposed issuance and exercise of all 1,243,060 OrbiMed Warrants (and the subsequent issuance of 1,243,060 new shares
resulting from it) is simulated below in a scenario before dilution due to outstanding dilutive instruments, as well as in a scenario
after dilution due to outstanding dilutive instruments.
English translation -
For information purposes only
Evolution of the number
of outstanding shares
| After the exercise of the OrbiMed Warrants but before dilution due to outstanding dilutive instruments | |
| |
| (A) Outstanding shares | |
| 27,288,093 | |
| (B) New shares to be issued upon exercise of the OrbiMed Warrants | |
| 1,243,060 | |
| (C) Total number of shares outstanding after (B) | |
| 28,531,153 | |
| (D) Dilution | |
| 4.36 | % |
| | |
| | |
| After dilution due to outstanding dilutive instruments but before the exercise of the OrbiMed Warrants | |
| | |
| (A) Outstanding shares | |
| 27,288,093 | |
| (B) New shares to be issued upon exercise of all outstanding Share Options | |
| 1,838,823 | |
| (C) New shares to be issued upon contribution of the Exact Sciences Earn-Out Consideration | |
| 27,499,999 | |
| (D) New shares to be issued upon exercise of all Exact Sciences Warrants | |
| 1,000,000 | |
| (E) New shares to be issued upon full placement of the ATM Facility | |
| 16,681,696 | |
| (F) Total number of new shares to be issued under (B), (C), (D) and (E) | |
| 47,020,518 | |
| (G) Total number of shares outstanding after (B), (C), (D) and (E) | |
| 74,308,611 | |
| | |
| | |
| After the exercise of the OrbiMed Warrants and after dilution due to outstanding dilutive instruments | |
| | |
| (A) Outstanding shares after dilution due to outstanding dilutive instruments | |
| 74,308,611 | |
| (B) New shares to be issued upon exercise of the OrbiMed Warrants | |
| 1,243,060 | |
| (C) Total number of shares outstanding after (B) | |
| 75,551,671 | |
| (D) Dilution | |
| 1.65 | % |
Subject to the methodological reservations
noted in paragraph 7.1, the table below reflects the evolution of the share capital, assuming the exercise of all 1,243,060 OrbiMed Warrants
and the subsequent issuance of 1,243,060 new shares resulting from it. The maximum amount of share capital increase (excluding issue premium)
is computed by multiplying the number of new shares to be issued (i.e., 1,243,060) with the applicable issue price (as the relevant price
is in each case lower than the fractional value of the shares of the Company (i.e., currently rounded EUR 6.0210 per share)).
Evolution of the share capital(1)
| Before the exercise of the OrbiMed Warrants | |
| |
| (A) Share capital (in EUR) | |
| 164,302,752.89 | |
| (B) Outstanding shares | |
| 27,288,093 | |
| (C) Fractional value (in EUR) (rounded) | |
| 6.0210 | |
| | |
| | |
| Exercise of the OrbiMed Warrants | |
| | |
| (A) Increase of share capital (in EUR)(2) | |
| 2,784,454.40 | |
| (B) New shares to be issued upon exercise of the OrbiMed Warrants | |
| 1,243,060 | |
| | |
| | |
| After the exercise of the OrbiMed Warrants | |
| | |
| (A) Share capital (in EUR) | |
| 167,087,207.29 | |
| (B) Outstanding shares | |
| 28,531,153 | |
| (C) Fractional value (in EUR) (rounded) | |
| 5.8563 | (2) |
Notes:
| (1) | This simulation does not take into account the exercise or conversion of outstanding dilutive instruments. |
| (2) | The issue price is lower than the fractional value of the existing shares of the Company (i.e., currently
rounded EUR 6.0210). Therefore, in accordance with Article 7:178 of the Belgian Companies and Associations Code, after the exercise
of the OrbiMed Warrants, all outstanding shares of the Company will have the same fractional value, i.e. rounded to EUR 5.8563. |
English translation - For information purposes
only
| 7.3. | Participation in the consolidated accounting net equity |
The evolution of the consolidated accounting
net equity of the Company as a result of the exercise of the OrbiMed Warrants is simulated below.
The simulation is based on the audited
consolidated annual financial statements of the Company for the financial year ended on December 31, 2023 (which have been prepared in
accordance with the International Financial Reporting Standards, as adopted by the European Union (“IFRS”) and which
have been submitted to the Company’s annual shareholders’ meeting for approval). The consolidated accounting net equity of the Company
as at December 31, 2023 amounted to EUR 6,709 (’000) (rounded) (i.e., USD 7,208 (’000) (rounded)), on the basis of the Exchange
Rate) or EUR 0.2459 (rounded) per share (based on 27,288,093 outstanding shares as at December 31, 2023). The simulation does not
take into account any changes in the consolidated accounting net equity since December 31, 2023.
For further information on the Company’s
net equity position on December 31, 2023, reference is made to the financial statements of
the Company, which are available on the Company’s website.
Based on the assumptions set out above,
as a result of the exercise of the OrbiMed Warrants and taking into account the payment of the aggregate subscription price for the OrbiMed
Warrants, without taking into account the other outstanding dilutive instruments, the Company’s accounting net equity on a consolidated
basis, would be increased as indicated below:
Evolution of the consolidated accounting net
equity
| Consolidated net equity for FY 2023 | |
| |
| (A) Net equity (in EUR ’000) (rounded) | |
| 6,709 | |
| (B) Outstanding shares | |
| 27,288,093 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.2459 | |
| | |
| | |
| Exercise of the OrbiMed Warrants | |
| | |
| (A) Increase of net equity (in EUR ’000) (rounded) | |
| 5,073 | |
| (B) New shares to be issued upon exercise of the OrbiMed Warrants | |
| 1,243,060 | |
| | |
| | |
| After exercise of the OrbiMed Warrants | |
| | |
| (A) Net equity (in EUR ’000) (rounded) | |
| 11,782 | |
| (B) Outstanding shares | |
| 28,531,153 | |
| (C) Net equity per share (in EUR) (rounded) | |
| 0.4130 | |
The table above demonstrates that the
issuance of the OrbiMed Warrants and the subsequent exercise of all the OrbiMed Warrants will would, from a pure accounting point of view,
lead to an increase of the amount represented by each share in the consolidated accounting net equity of the Company.
English translation - For information
purposes only
The evolution of the market capitalisation
as a result of the exercise of the OrbiMed Warrants is simulated below.
Subject to the methodological reservations
noted in paragraph 7.1, the table below reflects the impact of the exercise of the OrbiMed Warrants, and taking into account the payment
of the aggregate subscription price for the OrbiMed Warrants, without taking into account the other outstanding dilutive instruments,
on the market capitalisation and the resulting financial dilution.
After close of trading on Nasdaq on
May 8, 2024, the Company’s market capitalisation was USD 81,864,279.00, on the basis of a closing price of USD 3.0000 per share.
Assuming that, following the exercise of the OrbiMed Warrants, and taking into account the payment of the aggregate subscription price
for the OrbiMed Warrants, without taking into account the other outstanding dilutive instruments, the market capitalisation increases
exclusively with the funds raised on the basis of the parameters described hereabove, the new market capitalisation would then be rounded
to USD 3.0606 per share. This would represent a (theoretical) financial accretion of 2.02% per share.
Evolution of the market capitalisation and financial
dilution
| Before the exercise of the OrbiMed Warrants (1) | |
| |
| (A) Market capitalisation (in USD) | |
| 81,864,279.00 | |
| (B) Outstanding shares | |
| 27,288,093 | |
| (C) Market capitalisation per share (in USD) | |
| 3.0000 | |
| | |
| | |
| Exercise of the OrbiMed Warrants | |
| | |
| (A) Funds raised (in USD) | |
| 5,458,880.67 | |
| (B) New shares to be issued upon exercise of the OrbiMed Warrants | |
| 1,243,060 | |
| | |
| | |
| After the exercise of the OrbiMed Warrants (1) | |
| | |
| (A) Market capitalisation (in USD) | |
| 87,323,159.67 | |
| (B) Outstanding shares | |
| 28,531,153 | |
| (C) Market capitalisation per share (in USD) (rounded) | |
| 3.0606 | |
| | |
| | |
| Dilution/Accretion | |
| 2.02 | % |
Notes:
| (1) | At the date of this report and not taking into account the
potential issuance of new shares pursuant to the exercise or conversion of other outstanding dilutive instruments. |
| 7.5. | Other financial consequences |
For a further discussion on the financial
consequences of the proposed issuance of the OrbiMed Warrants and their subsequent exercise, the board of directors refers to the report
prepared in connection therewith by the statutory auditor of the Company.
* * *
Done on May 13, 2024.
English translation - For information
purposes only
On behalf of the board of directors,
| |
[Signed] |
|
|
[Signed] |
| By: |
|
|
By: |
|
English translation - For information
purposes only
ANNEX A
ORBIMED WARRANTS TERMS AND CONDITIONS
English translation -
For information purposes only
ANNEX B
REPORT OF THE STATUTORY AUDITOR PREPARED
IN ACCORDANCE WITH ARTICLES 7:180, 7:191 AND 7:193 OF THE BELGIAN COMPANIES AND ASSOCIATIONS CODE
18
Exhibit 99.12
WARRANTS TERMS AND CONDITIONS
THE WARRANTS AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING THE OFFER AND SALE OF SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND
IS QUALIFIED UNDER APPLICABLE STATE LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER
THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IN EACH CASE, IF THE COMPANY REQUESTS,
AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.
| Warrants Issuable: |
1,243,060 Warrants |
| |
|
| Issue Date: |
[●], 2024 |
| |
|
| Shares Issuable upon exercise of all Warrants: |
1,243,060 Common Shares |
IN CONSIDERATION OF THE PAYMENT
BY THE HOLDER OF THE SUBSCRIPTION PRICE OF THE WARRANTS, MDXHEALTH SA, a limited liability company organized under the laws of Belgium,
with registered office at Rue d’Abhooz 31, 4040 Herstal (Belgium), registered with the Crossroads Bank for Enterprises under company
number 0479.292.440 (the “Company”), hereby confirms that the Persons identified in Section 2 (each an
“Initial Holder” and, together with their successors and permitted transferees and assigns, each a “Holder”)
are entitled to subscribe to One Million Two-Hundred and Forty-Three Thousand and Sixty (1,243,060) Warrants in the aggregate (with respect
to each Initial Holder, in the respective amounts set forth in Section 2), whereby each Warrant shall upon exercise entitle the
Holder to one (1) fully paid-up and non-assessable (meaning that a holder of the relevant Common Share will not by reason of merely being
such a holder, be subject to assessment or calls by the Company or its creditors for further payment on such securities) Common Share
(such Common Share, as subject to adjustment hereunder, each a “Warrant Share”) at the Exercise Price per Warrant
Share, all subject to the terms, conditions and adjustments set forth below in the terms and conditions set out herein (the “Conditions”).
Certain capitalized terms used herein are defined in Section 1.
The Conditions have been agreed
by the Company on May 1, 2024, pursuant to the Credit Agreement, dated as of May 1, 2024 (as amended or otherwise modified from time to
time, the “Credit Agreement”), among MDxHealth, Inc., as borrower, the Company, the lenders party thereto, and
ORC SPV LLC, as administrative agent for the lenders.
Section 1. Definitions. Capitalized terms
used in these Conditions but not defined herein have the meanings ascribed thereto in the Credit Agreement as in effect on the date hereof.
The following terms when used herein have the following meanings:
“Affiliate”
of any Person means any other Person which, directly or indirectly, Controls, is Controlled by or is under common Control with such Person.
“Control” (and its correlatives) by any Person means (a) the power of such Person, directly or indirectly, (i)
to vote 20% or more of the Voting Securities (determined on a fully diluted basis) of another Person, or (ii) to direct or cause the direction
of the management and policies of such other Person (whether by contract or otherwise) or (b) ownership by such Person of 10% or more
of the Capital Securities of another Person.
“Aggregate Exercise
Price” means, with respect to the exercise of any Warrants for Warrant Shares, an amount equal to the product of (i) the
number of Warrants then being exercised pursuant to Section 4, multiplied by (ii) the Exercise Price.
“Articles of Association”
means the articles of association of the Company, as amended and restated from time to time.
“Belgian Companies
and Associations Code” means the Belgian Companies and Associations Code of 23 March 2019, as amended from time to time,
and the rules and regulations promulgated thereunder.
“Blocked Account”
has the meaning set forth in Section 4(b).
“Business Day”
means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York,
New York or Brussels, Belgium.
“Capital Securities”
means all shares of, interests or participations in, or other equivalents in respect of (in each case however designated, whether voting
or non-voting), of the Company’s share capital, and any warrants, options, or other rights entitling the holder thereof to purchase
or acquire any such share capital, in each case whether now outstanding or issued on or after the Issue Date.
“Common Shares”
means the Company’s ordinary shares, with no par value per share, and “Common Share” means one
(1) ordinary share in the Company, with no par value per share.
“Common Shares
Deemed Outstanding” means, at any given time, the sum of (i) the number of Common Shares actually outstanding at such time,
plus (ii) the number of Common Shares issuable upon exercise of Options actually outstanding at such time, plus (iii) the number of Common
Shares issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding
any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless of whether the
Options or Convertible Securities are actually exercisable at such time; provided that Common Shares Deemed Outstanding at any
given time shall not include shares owned or held by or for the account of the Company or any or its wholly owned subsidiaries.
“Company”
has the meaning set forth in the preamble.
“Conditions”
means the present terms and conditions of the Warrants pursuant to which Warrant Shares can be subscribed for upon exercise of the Warrants.
“Confirmation
Certificate” has the meaning set forth in Section 6.
“Convertible Securities”
means any Capital Securities that, directly or indirectly, are convertible into or exchangeable for Common Shares, including preferred
shares of the Company, if any, that may be issued from time to time.
“Credit Agreement”
has the meaning set forth in the preamble.
“Exchange Rate”
has the meaning set forth in Section 4(b).
“Exercise Certificate”
has the meaning set forth in Section 4(a)(i).
“Exercise Date”
means, for any given exercise of any Warrants, a Business Day on which the conditions to such exercise as set forth in Section 4
shall have been satisfied at or prior to 5:00 p.m., New York City time, including, without limitation, the receipt by the Company of the
Exercise Certificate.
“Exercise Period”
means the period from (and including) the Issue Date to (and including) 5:00 p.m., New York City time, on the Expiration Date.
“Exercise Price”
means $2.4134 per Common Share for which a Warrant is exercised, as adjusted from time to time pursuant to Section 5.
“Expiration Date”
means [●], 2029.1
“GH Agreement”
means the Asset Purchase Agreement, dated as of August 2, 2022, between Genomic Health, Inc. and the Company, as amended by the First
Amendment to Asset Purchase Agreement, dated as of January 1, 2023, as amended by the Second Amendment to Asset Purchase Agreement, dated
as of August 23, 2023, as amended by the Third Amendment to Asset Purchase Agreement, dated as of October 9, 2023, and as amended, supplemented,
or otherwise modified in accordance with the terms hereof from time to time.
“Holder”
has the meaning set forth in the preamble.
“Independent Advisor”
has the meaning set forth in Section 11(a).
“Initial Holder”
has the meaning set forth in the preamble.
“Issue Date”
means the date designated as such on the first page of these Conditions.
“Nasdaq”
means The Nasdaq Stock Market LLC.
“NYSE”
means the New York Stock Exchange.
| 1 | To be the five-year anniversary of the Issue Date. |
“Options”
means any warrants, options or similar rights to subscribe for or purchase Common Shares or Convertible Securities.
“Person”
means any natural person, corporation, limited liability company, partnership, joint venture, association, trust or unincorporated organization,
governmental authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.
“Registration
Rights Agreement” has the meaning set forth in Section 7.
“Registration
Statement” means, in connection with any public offering of securities, any registration statement required pursuant to
the Securities Act that covers the offer and sales of any such securities, including any prospectus, amendments or supplements to such
Registration Statement, including post-effective amendments and all exhibits and all materials incorporated by reference in such Registration
Statement.
“Rule 144”
means Rule 144 promulgated under the Securities Act.
“Sale of the Company”
means a transaction pursuant to which (i) (x) any Person or group of Persons acting jointly or otherwise in concert (other than the Holder
and any other parties to the Credit Agreement) acquires ownership, directly or indirectly, beneficially or of record, of Capital Securities
of the Company having more than fifty percent (50%) of the aggregate economic interests and/or voting power, determined on a fully diluted
basis, (y) any Person or group of Persons acting jointly or otherwise in concert (other than the Holder and any other parties to the Credit
Agreement) acquires, by contract or otherwise, the right to appoint or elect a majority of the board of directors of the Company (the
“Board”), or (z) all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole,
are sold, leased, exclusively licensed, transferred, conveyed or otherwise disposed of, and (ii) all Obligations (as defined in the Credit
Agreement) outstanding under the Credit Agreement are to be paid in full in cash, whether pursuant to the terms of the transaction, pursuant
to the terms of the Credit Agreement or otherwise.
“SEC”
means the Securities and Exchange Commission or any successor thereto.
“Share Distribution”
means any issuance or sale by the Company of any of its Common Shares, Options or Convertible Securities, other than in connection with
a dividend or distribution to holders of its Common Shares of the type described in Section 5(d) below.
“Share Reorganization”
has the meaning set forth in Section 5(b).
“Subsidiary”
means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other Person (irrespective
of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person, or by one or more Subsidiaries of such Person. Unless the context otherwise specifically requires, the term
“Subsidiary” shall be a reference to a Subsidiary of the Company.
“Unrestricted
Conditions” has the meaning set forth in Section 12(a)(ii).
“Voting Securities”
means, with respect to any Person, Capital Securities of any class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
“Warrant”
means a subscription right (inschrijvingsrecht / droit de souscription) that entitles the Holder to subscribe for one (1) Warrant
Share in accordance with the present Conditions.
“Warrant Register”
has the meaning set forth in Section 6.
“Warrant Shares”
has the meaning set forth in the preamble.
Section 2. Subscription of Warrants. On
the Issue Date, the Company shall (i) issue Eight Hundred Eighty-One Thousand Nine-Hundred and Six (881,906) Warrants to OrbiMed Royalty
& Credit Opportunities IV, LP who agrees to subscribe to these Warrants for an aggregate subscription price of $1,744,485.56 and (ii)
issue Three Hundred Sixty-One Thousand and One-Hundred and Fifty-Four (361,154) Warrants to OrbiMed Royalty & Credit Opportunities
IV Offshore, LP who agrees to subscribe to these Warrants for an aggregate subscription price of $714,394.11. The subscription price shall
be booked as issue premium. Such issue premium shall be accounted for on the liabilities side of the Company’s balance sheet as
net equity. The account on which the issue premium shall be booked shall, like the share capital, serve as the guarantee for third parties
and, save for the possibility of a capitalization of those reserves, can only be reduced on the basis of a valid resolution of the general
shareholders’ meeting passed in the manner required for an amendment to the Articles of Association.
Section 3. Term of the Warrants. Subject
to the Conditions, the Holder of a Warrant may exercise the Warrant as from the Issue Date until and including the Expiration Date.
Section 4. Exercise of the Warrants.
(a) Exercise
Procedure. The Warrants may be exercised on any Business Day during the Exercise Period, for all or any part of the unexercised Warrants
upon:
(i) delivery
to the Company (at its address or by email in accordance with Section 14) of a copy of a duly completed and executed Exercise Certificate
in the form attached hereto as Exhibit A (each, an “Exercise Certificate”), which certificate will specify
the number of Warrants that are being exercised and the Aggregate Exercise Price; and
(ii) simultaneously
with the delivery of the Exercise Certificate, payment to the Company of the Aggregate Exercise Price in accordance with Section 4(b).
(b) Payment
of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price must be made, at the option of the exercising Holder as set
forth in the applicable Exercise Certificate, by wire transfer of immediately available funds, in the amount of such Aggregate Exercise
Price, in US dollars to the special account of the Company (meeting the requirements of article 7:195 of the Belgian Companies and Associations
Code) (the “Blocked Account”) that shall be notified in writing by the Company as soon as practically possible
after receipt of the Exercise Certificate, but in any event no later than two (2) Business Days after the receipt of the Exercise Certificate.
Should the Company’s share capital be expressed in euro in the Articles of Association, for the purpose of the capital increase
and the amendment of the Articles of Association resulting from an exercise of any Warrants, the amount equal to the relevant Aggregate
Exercise Price for such Warrants exercise shall be converted into euro on the basis of the relevant USD/EUR exchange ratio as shall be
published by the European Central Bank on https://www.ecb.europa.eu/stats/policy_and_ exchange_rates/euro_reference_exchange_rates/html/index.en.html
(or such other relevant website of the European Central Bank) (the “Exchange Rate”) on the second Business Day
preceding the date of the relevant notarial deed in which the issuance of the relevant Warrant Share(s) and the corresponding capital
increase are established, and whereby the final amount in euro will be rounded down to the nearest two decimals.
(c) Delivery
of Warrant Shares. With respect to any exercise of any Warrants by the exercising Holder, provided that the relevant Holder has provided
the necessary delivery instructions set out in the Exercise Certificate, the Company shall (i) issue and deliver to the relevant Holder
a number of Common Shares equivalent to the number of Warrant Shares to which the relevant Holder is entitled in respect of that exercise
within five (5) Business Days of receipt by the Company of an Exercise Certificate (provided that the applicable Aggregate Exercise
Price for such Warrant Shares has been paid into the Blocked Account). The Company shall cause the Warrant Shares subscribed for hereunder
to be delivered in accordance with the Conditions to the relevant Holder. Unless otherwise provided herein, upon any exercise of any Warrants,
the relevant Warrants shall be deemed to have been exercised and the relevant Warrant Shares shall be deemed to have been issued, and
the Holder shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the date of delivery of the
relevant Warrant Shares.
(d) No
Fractional Shares. The Warrants can only be exercised for a whole number of Warrants and not with respect to any fraction of a Warrant.
No fractional Warrant Shares shall be issued upon the exercise of the Warrants. If as a result of an adjustment as provided herein an
exercise of the Warrants were to give the right to subscribe for a fraction of a Warrant Share, the Warrants can be exercised in an aggregated
manner by the Holder thereof in such a manner that the number of Warrant Shares issuable upon exercise of the Warrants (including the
relevant fractions of Warrant Shares) shall be aggregated, but rounded up to the nearest whole number of Warrant Shares without further
compensation to the Company in cash or otherwise in relation to the fraction of a Warrant Share that cannot be issued.
(e) Reserved.
(f) Capital
Increase. In accordance with applicable Belgian law, upon exercise of any Warrants, the capital increase and issue of the corresponding
number of Warrant Shares resulting therefrom shall be formally recorded before a notary public by one or more authorized representatives
of the Company.
(g) Allocation
of the Exercise Price. Upon exercise of any Warrants and the issue of the relevant Warrant Shares (and, as the case may be, the conversion
of the applicable Aggregate Exercise Price into euro as contemplated by Section 4(b)) pursuant to the terms provided herein, the
applicable Aggregate Exercise Price shall be allocated to the share capital of the Company. If the amount of the applicable (as the case
may be converted) Exercise Price per Warrant Share issued is greater than the fractional value of an existing Common Share immediately
prior to the capital increase, then the applicable (as the case may be converted) Exercise Price shall be allocated in such a manner that
per Warrant Share issued (i) a part of the applicable (as the case may be converted) Exercise Price equal to the fractional value
of an existing Common Share immediately prior to the capital increase shall be booked as share capital, and (ii) the balance of the
applicable (as the case may be converted) Exercise Price shall be booked as issue premium. Such issue premium shall be accounted for on
the liabilities side of the Company’s balance sheet as net equity. The account on which the issue premium shall be booked shall,
like the share capital, serve as the guarantee for third parties and, save for the possibility of a capitalization of those reserves,
can only be reduced on the basis of a valid resolution of the general shareholders’ meeting passed in the manner required for an
amendment to the Articles of Association. Following the issue of relevant Warrant Shares and the capital increase resulting therefrom,
each of the Common Shares (existing and new) shall represent the same fraction of the Company’s share capital.
(h) Further
information. Within two (2) Business Days after receipt of the Exercise Certificate, the Company may request the Holder in writing
to provide to the Company with such further declarations and documents, which are reasonably necessary to allow the Company to comply
with all applicable legal and regulatory provisions in connection with the exercise of the Warrant and the issue or delivery of the Warrant
Shares resulting therefrom.
(i) Nature
and form of the Warrants
(i) The
Warrants have been issued in the form of subscription rights (inschrijvingsrechten / droits de souscription), subject to the terms
herein, which are binding upon the Company and the Holder. Furthermore, all Warrants are in registered form. The Warrants cannot be converted
into a bearer instrument or in dematerialized form.
(ii) Subject
to, and in accordance with, the Conditions set forth herein, each Warrant confers the right (but not the obligation) on the Holder thereof
to subscribe, upon exercise of such Warrant, for one (1) Warrant Share to be issued by the Company (as may be adjusted as provided herein)
against payment in cash of the Exercise Price (as may be adjusted as provided herein).
(j) Valid
Issuance of Warrants and Warrant Shares; Payment of Taxes. With respect to the issuance and exercise of the Warrants, the Company
hereby represents, warrants, covenants and agrees as follows:
(i) All
Warrants are duly authorized. The Warrant has been issued by the extraordinary general shareholders’ meeting of the Company held
on the Issue Date.
(ii) Any
Warrant Shares issued upon an exercise of any Warrants in accordance with the provisions of the Conditions will be duly and validly authorized
and issued (subject to payment by the Holder of the relevant Aggregate Exercise Price), and fully paid-up, and no further contributions
in respect of such Warrant Shares will be required, and such Warrant Shares will be free from all liens and charges (other than liens
or charges created by the Holder, or created with regard to income taxes or other taxes payable by the Holder incurred in connection with
the exercise of Warrants or taxes in respect of any transfer made by the Holder occurring contemporaneously therewith).
(iii) The
Company shall take all such actions as may be necessary to (x) comply with Section 4(l) below and (y) ensure that all such Warrant
Shares are issued without violation by the Company of any applicable law or any requirements of any foreign or domestic securities exchange
upon which Warrant Shares may be listed at the time of such exercise.
(iv) The
Company shall exclusively bear and pay all expenses in connection with, and all governmental charges, taxes, fees, levies, withholdings
and all other such payments, that may be imposed on or with respect to, the issuance of the Warrants, and the issuance or delivery of
Warrant Shares pursuant to the Conditions and the Holder shall not be affected by such payments, and the Company shall not be eligible
to any indemnification for such payment from the Holder.
(v) The
Company is a corporation duly organized and validly existing under the laws of Belgium and has the capacity and corporate power and authority
to issue the Warrants.
(vi) The
Company has taken all action required to be taken to authorize the execution, delivery and performance of the Warrants, provided however
that the issuance of the relevant Warrant Shares upon exercise of the Warrants are subject to the signature of a notarial deed by an authorized
representative of the Company, in front a Belgian notary public, in accordance with article 7:186 of the Belgian Companies and Associations
Code, and as provided for in Section 4(f), which the Company agrees to cause to happen upon exercise of the Warrant in accordance
with the Conditions.
(vii) The
obligations of the Company under these Conditions are legal, valid and binding obligations, enforceable against the Company in accordance
with the terms hereof, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general equitable principles.
(viii) As
of the Issue Date, the Company has complied with all obligations set forth in Section 4(l), below.
(k) Conditional
Exercise. Notwithstanding any other provision hereof, if an exercise of all or any portion of the Warrants is to be made in connection
with a Sale of the Company, such exercise may, at the election of the relevant Holder, be conditioned, and the Company shall issue the
Warrant Shares only (provided the relevant Conditions for the exercise of the relevant Warrants and the issuance of the Warrant Shares
have been complied with), upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until
immediately prior to the consummation of such transaction.
(l) Sufficient
Authority. The Company shall at all times reserve and keep available a sufficient authority (whether pursuant to the authorized capital
or otherwise on the basis of a decision by its general shareholders’ meeting) for the purpose of allowing for exercises of the Warrants
and the issuance of the Warrant Shares issuable upon exercises of the Warrants pursuant to the Conditions. The Company shall take all
such actions within its powers as may be necessary or appropriate in order that the Company may validly and legally issue fully paid-up
and non-assessable (meaning that the relevant Holder will not by reason of merely being such the Holder of Warrant Shares, be subject
to assessment or calls by the Company or its creditors for further payment on such Warrant Shares) Warrant Shares upon exercises of the
Warrants pursuant to the Conditions.
(m) Rule
144 Compliance. With a view to making available to the Holder the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a Registration
Statement, the Company shall:
(i) use
commercially reasonable efforts to make and keep adequate public information available, as required by clause (c) of Rule 144;
(ii) use
commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (excluding, for avoidance of doubt, any prospectus or registration statement which the Company
is under no obligation to file); and
(iii) furnish,
or otherwise make available to the Holder so long as the Holder owns Warrant Shares, promptly upon request, a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed or furnished by the Company as the Holder may reasonably request
in connection with the sale of Common Shares without registration.
(n) Ownership
Cap. The Company shall not knowingly effect the exercise of a Warrant, and a Holder shall not have the right to exercise a Warrant
to the extent that, after giving effect to such exercise, such Holder (together with its Affiliates) would beneficially own in excess
of 9.99% of the Common Shares of the Company immediately after giving effect to such exercise. For purposes of the foregoing sentence,
the aggregate number of Common Shares owned by a Holder and its Affiliates shall include the number of Warrant Shares issuable upon exercise
of such Warrant(s) with respect to which the determination of such aggregate number is being made, but shall exclude Common Shares (if
any) that would be issuable upon (i) exercise of the remaining, unexercised portion of the Warrants beneficially owned by such Holder
and its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other Capital Securities of the Company
beneficially owned by such Holder and its Affiliates (including, without limitation, any Convertible Securities) subject to a limitation
on conversion or exercise analogous to the limitations contained herein. Except as set forth in the preceding sentence, for purposes of
this Section 4(n), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes
of these Conditions, in determining the number of outstanding Common Shares, a Holder of the Warrants may rely on the number of such outstanding
Capital Securities as reflected in the most recent of (i) the Company’s Form 20-F, Form 6-K or other public filing with the SEC,
as the case may be, if available, (ii) a more recent public announcement by the Company, or (iii) any other notice by the Company or its
depositary or transfer agent setting forth the number of outstanding Common Shares. In addition, upon the written request of a Holder
(but not more than once during any calendar quarter), the Company shall, within three (3) Business Days, confirm to a Holder the number
of their outstanding Common Shares. Furthermore, upon the written request of the Company (but not more than once during any calendar quarter),
a Holder shall promptly confirm to the Company their then current beneficial ownership with respect to the Company’s Common Shares.
(o) Upon
exercise of any or all Warrants a Holder shall not otherwise be entitled to receive cash or Warrant Shares that are registered under the
Securities Act.
Section 5. Adjustment to Number of Warrant
Shares, Exercise Price, etc. The number, class, and kind of shares issuable upon exercise of a Warrant shall be subject to adjustment
from time to time as provided in this Section 5.
(a) General.
Notwithstanding article 7:71, §1 under the Belgian Companies and Associations Code (or its successor provision), the Company may
proceed with all actions that it deems appropriate in relation to its share capital, its Articles of Association, its financial condition,
even if such actions, in the absence of the changes, amendments and compensations referred to below, would lead to a reduction of the
benefits allocated to the Warrants, including but not limited to, mergers or acquisitions, capital increases or reductions (including
those subject to conditions precedent), the incorporation of reserves into the share capital with or without the issue of new Common Shares,
the issue of dividends or other distributions, the issue of other Capital Securities and the amendment of arrangements or provisions relating
to the distribution of profits or liquidation proceeds, provided, however, that (i) the terms of the Warrants may not be amended without
Holders’ written consent, (ii) any such actions or transactions cannot be undertaken with the primary purpose of adversely affecting
the rights, benefits or value of the Warrants, and (iii) that Common Shares issued or issuable under the Warrants shall not be treated
differently (had they already been issued at that time) than other Common Shares already issued. If the rights of the Holder of the Warrants
are adversely affected by an action or transaction permitted by the immediately preceding sentence, the Holders of the Warrants will not
be entitled to a change of the Exercise Price or Warrant Shares issuable thereunder, an amendment to the Warrant Conditions and/or any
other form of compensation (financial or otherwise) unless expressly provided for in Sections 5(b), 5(c), 5(d) and
5(e). The Parties agree that with respect to the actions or transactions specifically provided for in Sections 5(b), 5(c),
5(d) and 5(e), the changes, amendments, adjustments and/or compensations as provided in such relevant Section shall apply.
(b) Adjustment
to Number of Warrant Shares Upon Share Reorganizations, Reclassifications, etc. In the event of any changes in the outstanding number
of Common Shares of the Company by reason of redemptions, recapitalizations, reclassifications, combinations or exchanges of shares, splits
or reverse splits, separations, reorganizations, liquidations, substitutions, replacements, or the like outside of the framework of a
transaction referred to in Sections 5(c), 5(d) and 5(e) (any of the foregoing or combination thereof being a “Share
Reorganization”), the number and class of Warrant Shares available upon exercise of a Warrant and the Exercise Price shall
be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same Exercise Price, the number, class, and kind of
shares as the Holder would have owned had the Warrant been exercised prior to any such event and had the Holder continued to hold such
Warrant Shares until after the event requiring adjustment. The form of the Warrant need not be changed because of any adjustment in the
number of Warrant Shares subject to the Warrant.
(c) Adjustment
to Number of Warrant Shares Upon Merger or (Partial) Demerger. In the event that at any time as of the Issue Date up to the Expiration
Date, there shall be (i) a merger (“fusie” / “fusion”) of the Company with or into another Person
whereby the Company is not the surviving entity, or (ii) a (partial) de-merger (“(partiële) splitsing” / “scission
(partielle)”) of the Company, whereby in both (i) and (ii) the Common Shares of the Company are exchanged into shares, other
securities, cash or other property of one or more other Persons, then the Warrant Shares to be issued upon exercise of a Warrant after
the occurrence of one of such events and the Exercise Price shall be adjusted (if and to the extent required) so that, after giving effect
to such adjustment, the Holder of the Warrant shall upon exercise of the Warrant be entitled to receive the number of shares, other securities,
cash or other property of the successor or acquiring Persons that such Holder would have owned or have been entitled to receive had the
Warrant been exercised immediately prior to the occurrence of the event concerned. An adjustment made pursuant to this Section 5(c)
shall become effective immediately after the effective date of the event concerned. The Company shall inform the Holders of such adjustment
by means of a notice as soon as practicable after the effective date of the event concerned. In case of any such merger or (partial) de-merger,
the successor or acquiring Persons shall expressly assume the due and punctual observance and performance of each and every covenant and
obligation of these Conditions to be performed and observed by the Company.
(d) Adjustment
to Exercise Price Upon a Share Distribution. Subject to clause (iii) below, if the Company consummates or effects any Share
Distribution for a price per Common Shares less than the Exercise Price then in effect, then, effective upon such Share Distribution,
the Exercise Price shall be reduced to a price determined by multiplying the Exercise Price then in effect by a fraction, the numerator
of which shall be the sum of (A) the number of Common Shares Deemed Outstanding immediately prior to such Share Distribution multiplied
by the Exercise Price then in effect, plus (B) the consideration, if any, received by the Company upon such Share Distribution, and the
denominator of which shall be the product of (1) the total number of Common Shares Deemed Outstanding immediately after such Share Distribution
multiplied by (2) the Exercise Price then in effect. For purposes of this Section 5(d):
(i) In
the event Options or Convertible Securities are included in any such Share Distribution, the price per Common Share deemed to have been
issued or sold as a result of the sale or issuance of such Options or Convertible Securities, shall be equal to the price per Common Share
for which Common Shares are issuable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities,
as the case may be (determined by dividing (x) the aggregate amount, if any, received or receivable by the Company as consideration for
the issuance, sale, distribution or grant of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration
payable to the Company, if any, upon the exercise of all such Options or the conversion or exchange of such Convertible Securities (as
the case may be), by (y) the total maximum number of Common Shares issuable upon the exercise of such Options or upon the conversion or
exchange of all such Convertible Securities).
(ii) The
provisions of this Section 5(d) shall not in any event operate to increase the Exercise Price.
(iii) This
Section 5(d) shall not apply to any of the following:
| |
(A) |
Any issuance, sale or other distribution of Common Shares, Options or Convertible Securities pursuant to (i) any Share Reorganization, which shall instead be governed by Section 5(b) above, or (ii) any dividend or distribution to holders of Common Shares, which shall instead by governed by Section 5(e) below. |
| |
(B) |
The issuance of Common Shares upon exercise or conversion of any Options or Convertible Securities included in the Common Shares Deemed Outstanding as of the Issue Date or pursuant to the GH Agreement pursuant to which the Company acquired the Oncotype DX Genomic Prostate Score test. |
| |
(C) |
The grant or issuance of Common Shares, Options or Convertible Securities to members of the personnel in the sense of article 1:27 of the Belgian Companies and Associations Code (including, without limitation, members of the Board, officers, employees, consultants), or other service providers of the Company pursuant to any employee incentive plan, employee share option plan or similar equity-based benefit plans approved by the Company’s Board or shareholders’ meeting, provided that the total number of securities issued under this sub-clause for a price per Common Share less than the Exercise Price shall not constitute more than five percent (5%) of the total number of Common Shares Deemed Outstanding at any time. |
| |
(D) |
The issuance or grant of Common Shares, Options or Convertible Securities in connection with transactions or financings with material strategic partners, in each case approved by the Board or the Company’s general shareholders’ meeting, as relevant; provided, that the total number of securities issued or granted under this sub-clause for a price per Common Share less than the Exercise Price shall not constitute more than five percent (5%) of the total number of Common Shares Deemed Outstanding at any time. |
(e) Compensation
in case of Dividends, Distributions, etc. If the Company declares or pays a dividend or distribution on its outstanding Common Shares
payable in cash, Capital Securities or other property, the Holders shall be entitled to receive, at the time such dividend or distribution
is paid, without additional cost to the Holders, the total number and kind of cash, Capital Securities or other property which the relevant
Holder would have received had the relevant Holder owned the Warrant Shares that the relevant Holder can subscribe to upon exercise of
the unexercised Warrants such Holder still holds as of the date such dividend or distribution was paid.
(f) Certificate
as to Adjustment.
(i) As
promptly as reasonably practicable following any change or adjustment of the type described above in this Section 5, but in any
event not later than ten (10) Business Days thereafter, the Company shall furnish to the Holders a certificate of an authorized representative
of the Company setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation
thereof.
(ii) As
promptly as reasonably practicable following the receipt by the Company of a written request by the relevant Holder, but in any event
not later than ten (10) Business Days thereafter, the Company shall furnish to the relevant Holder a certificate of an authorized representative
of the Company certifying the number of Warrant Shares or the amount, if any, of other shares, securities or assets then issuable upon
exercise of such Holder’s Warrants.
(g) Notices.
In the event that, at any time during the Exercise Period the Company shall take a record of the holders of its outstanding shares (or
other Capital Securities at the time issuable upon exercise of a Warrant) for the purpose of:
(i) entitling
or enabling such holders to receive any dividend or other distribution, to receive any right to subscribe for or purchase any shares of
any class or any other securities, or to receive any other security;
(ii) (x)
any capital reorganization of the Company, any reclassification of any outstanding securities, any consolidation or merger of the Company
with or into another Person, or (y) a Sale of the Company; or
(iii) the
voluntary or involuntary dissolution, liquidation or winding-up bankruptcy or similar event involving the Company;
then, and in each such case, the Company shall
send or cause to be sent to the Holder at least five (5) Business Days prior to the applicable record date or the applicable expected
effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend,
distribution or other right or action, and a description of such dividend, distribution or other right or action, or (B) the effective
date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to
take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect
to which the holders of record of its shares (or such other Capital Securities at the time issuable upon exercise of a Warrant) shall
be entitled to exchange their shares (or such other Capital Securities), for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such
exchange applicable to the Warrants and the Warrant Shares. The above notwithstanding, the Company shall not be required to provide the
Holders with notice containing such information if the Company reasonably believes that it constitutes material non-public information,
unless the relevant Holder (i) confirms to the Company in writing that it consents to receive such information, and (ii) executes a customary
market standstill or equivalent agreement pursuant to which the relevant Holder will agree not to trade in the Company’s shares
or other Capital Securities while in possession of such material non-public information or until such information is no longer material
or non-public.
Section 6. Warrant Register.
In accordance with applicable Belgian law, the Company shall keep and properly maintain at its principal executive offices a register
(the “Warrant Register”) for the registration of the Warrants and any transfers thereof. The Company may deem
and treat the Person in whose name a Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall
not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of a Warrant effected in
accordance with the Conditions. At the request of the relevant Holder, the Company shall confirm in writing the ownership of the Warrants
and the number of Warrant Shares that can still be subscribed for upon exercise of all unexercised Warrants by the relevant Holder, by
means of a confirmation substantially in the form of Exhibit C (the “Confirmation Certificate”)
Section 7. Registration
Rights. The Holders are entitled to the benefit of certain registration rights with respect to the Warrant Shares as provided in
the Registration Rights Agreement, dated as of [●], 2024,2
by and among the Company and the Initial Holders (the “Registration Rights Agreement”), and any subsequent
holder hereof shall be entitled to such rights to the extent provided in the Registration Rights Agreement. If the Company fails to cause
any Registration Statement covering applicable “Registrable Securities” (as that term is defined in the Registration Rights
Agreement) to be declared effective prior to the applicable dates set forth therein, or if any of the events specified in Section 2(b)
of the Registration Rights Agreement occurs, and the Suspension Period (as that term is defined in the Registration Rights Agreement)
(whether alone, or in combination with any other Suspension Period) continues for more than 30 days in any 12-month period, or for more
than a total of 90 days, then, to the extent permitted by applicable Belgian law, the Expiration Date of the Warrants shall be extended
one day for each day beyond the 30-day or 90-day limits, as the case may be, that the Suspension Period continues.
Section 8. Transfer of Warrants.
Subject to Section 12 hereof, the Warrants and all rights hereunder are transferable, in whole or in part, by the relevant Holder
without charge to the relevant Holder, upon delivery of a duly completed and executed Transfer Certificate in the form attached hereto
as Exhibit B, to the Company at its then principal executive offices. Upon such compliance and delivery, the Company shall amend
the Warrant Register to reflect the transfer and to register the new Holder of the Warrant(s) in the Warrant Register.
Section 9. The Holder Not
Deemed a Shareholder; Limitations on Liability. The Holders are not shareholders of the Company solely by virtue of holding any Warrants,
and therefore does not have the rights of a shareholder in relation to the Warrant Shares still to be issued or delivered to the Holder
upon an exercise of a Warrant until the relevant exercise of a Warrant and the issue and delivery of the relevant Warrant Shares. Each
Holder will, however, have the right to attend general shareholders’ meetings of the Company as the holder of a subscription right (inschrijvingsrecht
/ droit de souscription) to the extent permitted by applicable Belgian law. The Holder, as the Holder of a Warrant, will not have
any voting rights with respect to general meetings of the Company nor any dividend rights until the underlying Warrant Shares have been
issued to it upon exercise of any Warrants.
Section 10. [Reserved]
Section 11. Disputes; No
Impairment, etc. The parties hereto agree as follows:
(a) Disputes. In the
event of any dispute which arises between a Holder and the Company (including the Board) with respect to the calculation or determination
of the adjusted Exercise Price, the number of Warrants, the number of Warrant Shares, other Capital Securities, cash or other property
issuable upon exercise of the Warrants, the amount or type of consideration due to the relevant Holder in connection with any event,
transaction or other matter described in Section 5 above or any other matter involving the Warrants, the Conditions or the Warrant
Shares that is not resolved by the parties after good faith discussions and efforts to reach resolution, upon the request of the relevant
Holder the disputed issue(s) shall be submitted to a firm of independent investment bankers or public accountants of recognized international
standing, which (i) shall be chosen by the Company and be reasonably satisfactory to the relevant Holder (which cannot unreasonably delay
or reject the appointment of investment bankers or public accountants) and (ii) shall be completely independent of the Company (an “Independent
Advisor”), for determination, and such determination by the Independent Advisor shall be binding upon the Company and the
relevant Holder with respect to the Warrants, any Warrant Shares issued in connection herewith or the matter in dispute, as the case
may be, absent manifest error. Costs and expenses of the Independent Advisor shall be paid by the Company.
(b) Equitable Equivalent.
In case any event shall occur as to which the provisions of Section 11(a) above are not strictly applicable but the failure to
make any adjustment would not, in the reasonable, good faith opinion of the relevant Holder, fairly protect the rights and benefits of
the relevant Holder represented by its Warrant(s) in accordance with the essential intent and principles of Section 11(a), then,
in any such case, at the request of the relevant Holder, the Company shall submit the matter and issues raised by the relevant Holder
to an Independent Advisor, which shall give its opinion upon the adjustment, if any, on a basis consistent with the essential intent
and principles established in Section 11(a), to the extent necessary to preserve, without dilution, the rights and benefits represented
by its Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the relevant Holder and shall make the
adjustments described therein, if any. Costs and expenses of the Independent Advisor shall be shared 50/50 by the Company and the relevant
Holder.
Section 12. Compliance with
the Securities Act.
(a) Agreement to Comply
with the Securities Act, etc.
(i) Legend. The Holder,
by acceptance of Warrants, agrees to comply in all respects with the provisions of this Section 12 and the restrictive legend
requirements set forth on the face of each Warrant and in the Conditions and further agrees that it shall not offer, sell or otherwise
dispose of any Warrants or Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation
of the Securities Act. Subject to clause (ii) below, any recording in the relevant securities register (i.e., the Warrant Register
with respect to any Warrants and the share register with respect to any Warrant Shares), any book entry, excerpt or certificate in relation
to any Warrants and Warrant Shares issued upon exercise of any Warrants (unless registered under the Securities Act) shall be subject
to, and to the extent stamped or imprinted, be stamped or imprinted with a legend in substantially the following form:
“THE WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING THE OFFER AND SALE OF SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT
AND IS QUALIFIED UNDER APPLICABLE STATE LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IN EACH CASE, IF THE COMPANY
REQUESTS, AN OPINION SATISFACTORY TO THE COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”
(ii) Removal of Restrictive
Legends. Neither the Warrants nor any book entry, excerpt or certificates evidencing any Warrants or Warrant Shares issuable or deliverable
under or in connection with the Conditions shall contain any legend restricting the transfer thereof (including the legend set forth
above in clause (i)) in any of the following circumstances: (A) following any sale of any Warrants or any Warrant Shares issued
or delivered to the Holder under or in connection with the Conditions pursuant to Rule 144, (B) if any Warrants or Warrant Shares are
eligible for sale under clause (b)(1) of Rule 144, or (C) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the SEC) (collectively, the “Unrestricted
Conditions”). If the Unrestricted Conditions are met at the time of issuance of any Warrants or Warrant Shares, as the case
may be, to the reasonable satisfaction of Company’s counsel, the book entries, certificates or excerpts in relation to such Warrants
or Warrant Shares, as the case may be, shall be issued free of all legends.
(iii) Replacement Warrants.
The Company agrees that at such time as the Unrestricted Conditions have been satisfied it shall promptly (but in any event within ten
(10) Business Days) following written request from the Holder issue a replacement book entry, certificate or excerpt in relation to any
Warrants or replacement Warrant Shares, as the case may be, free of all restrictive legends.
(iv) Sale of Unlegended
Shares. The Holders agree that the removal of the restrictive legend from any recording in the relevant securities register (i.e.,
the Warrant Register with respect to any Warrants and the share register with respect to any Warrant Shares), any book entry, excerpt
or certificates in relation to any Warrants, Warrant Shares or securities as set forth in Section 12(a)(ii) above is predicated
upon the Company’s reliance that the Holders will sell such Warrants or any such securities pursuant to either an effective Registration
Statement or otherwise pursuant to the requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if such securities are sold pursuant to a Registration Statement, they will be sold in compliance
with the plan of distribution set forth therein.
(b) Representations of
the Holder. Upon subscribing for or otherwise acquiring any Warrants, and upon an exercise of any Warrants, the relevant Holder shall
(and shall be deemed to) provide to the Company the following representations, warranties, agreements, covenants, undertakings and acknowledgements:
(i) The relevant Holder is
an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The relevant Holder is
acquiring the Warrant(s) and will acquire the Warrant Share(s) to be issued upon exercise hereof for investment for its own account and
not with a view towards, or for resale in connection with, the public sale or distribution of any Warrants or Warrant Shares, except
pursuant to sales registered or exempted under the Securities Act.
(ii) The relevant Holder understands
and acknowledges that the Warrant(s) and the Warrant Share(s) to be issued upon exercise hereof are “restricted securities”
under the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that,
under such applicable laws and applicable regulations, such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.
(iii) The relevant Holder acknowledges
that it can bear the economic and financial risk of its investment for an indefinite period and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant(s) and the Warrant
Share(s). The relevant Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions
of the offering of the Warrant(s) and the business, properties, prospects and financial condition of the Company.
Section 13. Pre-emptive
right. In accordance with article 7:71 of the Belgian Companies and Associations Code, in the event of an increase in the share capital
of the Company by cash contributions, each Holder may exercise any of its Warrants and participate as a shareholder in the new issuance,
to the extent that existing shareholders of the Company have this right.
Section 14. Notices.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed
to have been given: (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by
a nationally recognized overnight courier (receipt requested); (iii) on the date sent by e-mail of a PDF document (with confirmation
of transmission) if sent before 5:00 p.m., New York City time to the recipient, and on the next Business Day if sent after 5:00 p.m.,
New York City to the recipient, in each case provided that sender did not receive an automated failed delivery notification; or (iv)
on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications
must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in
a notice given in accordance with this Section 14).
| If to the Company: | MDxHealth SA |
15279 Alton Parkway,
Suite 100
Irvine, CA 92618
United States
Attn: General
Counsel
Email: joseph.sollee@mdxhealth.com
with copies to
(which shall not qualify as notice to any party hereto):
Baker Mckenzie
BV/SRL
Bolwerklaan 21
Avenue du Boulevard - box 1
1210 Brussels
Belgium
Attention: Roel
Meers
Email: Roel.Meers@bakermckenzie.com
and
K&L Gates
LLP
300 South Tryon
Street, Suite 1000
Charlotte, North
Carolina 28202
United States
Attention: Mark
Busch
Email: Mark.Busch@klgates.com
If to OrbiMed Royalty
& Credit Opportunities IV, LP:
c/o OrbiMed Advisors
LLC
601 Lexington
Avenue, 54th Floor
New York, NY 10022
Attention: Matthew
Rizzo; Mark Jelley; OrbiMed Credit Report
Email: RizzoM@OrbiMed.com;
JelleyM@OrbiMed.com;
ROSCreditops@orbimed.com
with a copy to
(which shall not qualify as notice to any party hereto):
Covington &
Burling LLP
The New York Times
Building
620 Eighth Avenue
New York, NY 10018
Attention: Peter
Schwartz
Email: pschwartz@cov.com
If to OrbiMed Royalty
& Credit Opportunities IV Offshore, LP:
c/o OrbiMed Advisors
LLC
601 Lexington
Avenue, 54th Floor
New York, NY 10022
Attention: Matthew
Rizzo; Mark Jelley; OrbiMed Credit Report
Email: RizzoM@OrbiMed.com;
JelleyM@OrbiMed.com;
ROSCreditops@orbimed.com
with a copy to
(which shall not qualify as notice to any party hereto):
Covington &
Burling LLP
The New York Times
Building
620 Eighth Avenue
New York, NY 10018
Attention: Peter
Schwartz
Email: pschwartz@cov.com
Section 15. Cumulative Remedies.
Except to the extent expressly provided in Section 11 to the contrary, the rights and remedies provided in these Conditions are
cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law,
in equity or otherwise.
Section 16. Entire Agreement.
These Conditions constitute the sole and entire agreement of the Company and the Holders with respect to the subject matter contained
herein and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject
matter.
Section 17. Successor and
Assigns. These Conditions and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the Company, the
relevant Holder, and the successors of the Company, and the successors and permitted assigns of the relevant Holder. Such successor or
permitted assign of the relevant Holder shall be deemed to be a “Holder” for all purposes hereunder.
Section 18. No Third-Party
Beneficiaries. These Conditions are for the sole benefit of the Company and the Holders and their respective successors and, in the
case of a Holder, permitted assigns of such Holder, and nothing herein, express or implied, is intended to or shall confer upon any other
Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of these Conditions.
Section 19. Headings.
The headings in these Conditions are for reference only and shall not affect the interpretation of these Conditions.
Section 20. Amendment and
Modification; Waiver. Except as otherwise provided herein, these Conditions may only be amended, modified or supplemented by an agreement
in writing signed by the Company and the Holders. No waiver by the Company or the Holders of any of the provisions hereof shall be effective
unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a
waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different
character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power
or privilege arising from these Conditions shall operate or be construed as a waiver thereof, nor shall any single or partial exercise
of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
Section 21. Severability.
If any term or provision of these Conditions is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of these Conditions or invalidate or render unenforceable such term or
provision in any other jurisdiction.
Section 22. Governing Law.
These Conditions shall be governed by and construed in accordance with Belgian law without effect to any choice or conflict of law
provision or rule that would cause the application of laws of any jurisdiction other than those of Belgium.
Section 23. Submission to
Jurisdiction. Any legal suit, action or proceeding arising out of or based on these Conditions, the Warrants or the transactions
contemplated hereby shall be instituted in the federal courts of the United States or the courts of the State of New York, in each case
located in the city and county of New York; provided that, any suit seeking enforcement against the Company may be brought, at
the relevant Holder’s option, in the courts Belgium. Each party irrevocably submits to the exclusive jurisdiction of such courts
in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such
party’s address set forth in Section 14 shall be effective service of process for any suit, action or other proceeding, and the
parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in such courts
and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding has been brought in
an inconvenient forum.
Section 24. No Strict Construction.
These Conditions shall be construed without regard to any presumption or rule requiring construction or interpretation against the
party drafting an instrument or causing any instrument to be drafted.
Exhibit A
to the Conditions
FORM OF EXERCISE CERTIFICATE
(To be signed only upon exercise of any Warrants)
CAP Business Center
Zone Industrielle des Hauts-Sarts
Rue d’Abhooz 31
4040 Herstal
Belgium
Dear all,
The present letter (the “Exercise
Certificate”) is sent on behalf of [[name], a company organised and existing under the laws of [jurisdiction],
with registered office at [address] and registered with [applicable company register] under number [number] [Drafting
note: for legal entity]/[[name], of [nationality], residing at [address] [Drafting note: for natural person]]
(the “Holder”).
Reference is made to the Warrants that have been
issued by MDxHealth SA, a limited liability company incorporated under the laws of Belgium (the “Company”) on
[●], 2024 (the “Warrants”). Capitalized words and expressions used herein will, unless otherwise defined
herein, have the same meaning as in the terms and conditions of the Warrants (the “Conditions”).
The Holder hereby:
| 1. | notifies the Company that it irrevocably and
unconditionally exercises [number] Warrants, and therefore subscribes for [number]
Warrant Shares in accordance with the Conditions; |
| 2. | requests that the Company confirms the details
of the Blocked Account as soon as practicably possible via email to [email address]; |
| 3. | confirms it shall pay the relevant Aggregate
Exercise Price for the present exercise of the Warrants, being USD [●] by means
of a wire transfer of such amount in immediately available funds in US dollars to the Blocked
Account; |
| 4. | undertakes to fill in and sign any additional
document that may be reasonably requested within two (2) Business Days after receipt of this
Exercise Certificate by the Company to proceed with the issuance of the [number] Warrant
Shares and the related capital increase; |
| 5. | in accordance with Section 3(n) of the
Warrant Conditions, confirms, represents and warrants that, before exercise of the
Warrant pursuant to this Exercise Certificate, it beneficially owns (in accordance with Section
13(d) of the Exchange Act) [number] Common Shares; |
| 6. | provides to the Company the representations,
warranties, agreements, covenants, undertakings and acknowledgements set out in Section
12 of the Conditions as at the date of the present Exercise Certificate; |
| 7. | instructs that the Warrant Shares to be issued
as a result of the exercise of the Warrants are to be delivered to an account in the name
of the Holder and recorded in the component of the Company’s share register that is maintained
in the United States with the Company’s transfer agent and registrar in the United States,
in accordance with the following instructions: |
| |
Name of the Holder: |
[●] |
|
| |
Address of the Holder: |
[●] |
|
On behalf of the Holder:
| By: | |
|
| | Name: |
[●] |
|
| | Title: |
[●] |
|
| | Date: |
[●] |
|
Exhibit B
to the Conditions
FORM OF TRANSFER CERTIFICATE
[DATE OF TRANSFER]
Dear all,
The present letter (the “Transfer
Certificate”) is sent on behalf of:
| (a) | [[name], a company organised and existing
under the laws of [jurisdiction], with registered office at [address] and registered
with [applicable company register] under number [number] [Drafting note:
for legal entity]/[[name], of [nationality], residing at [address]
[Drafting note: for natural person]] (the “Transferor”); and |
| (b) | [[name], a company organised and existing
under the laws of [jurisdiction], with registered office at [address] and registered
with [applicable company register] under number [number] [Drafting note:
for legal entity]/[[name], of [nationality], residing at [address]
[Drafting note: for natural person]] (the “Transferee”). |
Reference is made to the Warrants that have been
issued by MDxHealth SA, a limited liability company incorporated under the laws of Belgium (the “Company”) on
[●], 2024 (the “Warrants”). Capitalized words and expressions used herein will, unless otherwise defined
herein, have the same meaning as in the terms and conditions of the Warrants (the “Conditions”).
The Transferor and Transferee hereby:
| 1. | notify the Company that the Transferor has
transferred to the Transferee [number] Warrants, in accordance with the Conditions; |
| 2. | each provide to the Company in relation to
itself the representations, warranties, agreements, covenants, undertakings and acknowledgements
set out in Section 12 of the Conditions as at the date of the Transfer Certificate; |
| 3. | notify the Company that the contact details
for notices to the Transferee shall be as follows: |
| |
Name of the Transferee: |
[●] |
| |
Address: |
[●] |
| |
Contact person: |
Name: [●] |
| |
|
Title: [●] |
| |
|
Telephone: [●] |
| |
|
Email: [●] |
| 4. | instruct the Company, and provide a power of
attorney to any authorized representative of the Company, in order to record, on behalf of
the Transferor and Transferee, the transfer of the Warrants as set out in sections 1 to 3
of this Transfer Certificate in the Warrant Register of the Company. |
On behalf of the Transferor:
| By: | |
|
| | Name: |
[●] |
|
| | Title: |
[●] |
|
| | Date: |
[●] |
|
On behalf of the Transferee:
| By: | |
|
| | Name: |
[●] |
|
| | Title: |
[●] |
|
| | Date: |
[●] |
|
Exhibit C
to the Conditions
Form
of Confirmation Certificate
| To: | [[name], a company organised and existing
under the laws of [jurisdiction], with registered office at [address] and registered
with [applicable company register] under number [number] [Drafting note:
for legal entity]/[[name], of [nationality], residing at [address]
[Drafting note: for natural person]] (the “Holder”) |
Re: Conditions – Confirmation Certificate
Dear all,
The present letter (the “Confirmation
Certificate”) is sent on behalf of MDxHealth SA, a limited liability company incorporated under the laws of Belgium (the
“Company”).
Reference is made to the Warrants that has been
issued by the Company on [●], 2024 (the “Warrants”). Capitalized words and expressions used herein will,
unless otherwise defined herein, have the same meaning as in the terms and conditions of the Warrants (the “Conditions”).
The Company hereby confirms to the Holder that,
on [●], the Holder was registered in the Warrant Register of the Company as the owner of [●] Warrants, pursuant to which,
upon full exercise of such Warrants, the Holder can subscribe to [●] Warrant Shares.
The Warrants are in registered form, and the
present Confirmation Certificate does not constitute a bearer instrument incorporating any rights to the Warrants, and does not confer
any rights to the Warrants.
On behalf of the Company:
Exhibit C-1
MDXHealth (CE) (USOTC:MXDHF)
Historical Stock Chart
From May 2024 to Jun 2024
MDXHealth (CE) (USOTC:MXDHF)
Historical Stock Chart
From Jun 2023 to Jun 2024
