Affluent Medical : Affluent Medical announces the major success of its capital increase with preferential subscription rights for about €13.7 million

PRESS RELEASE

Affluent Medical announces the major success of its capital increase with preferential subscription rights for about

€13.7 million

• Total demand representing an oversubscription of 131.5%
• 85% of preferential subscription rights were exercised
• Issue of 10,146,450 shares with redeemable warrants attached (ABSARs) for a unit price of €1.35
• Partial exercise of the extension clause for about €0.7 million
• Truffle Capital subscription of 63% of the issue amount
• Settlement-delivery of the new shares and redeemable warrants (BSARs) on March 6, 2023

Aix-en-Provence, March 2, 2023 - 7:30 am - Affluent Medical (the "Company" - ISIN code: FR0013333077 – ticker: AFME), a French MedTech specialized in the international development and industrialization of innovative medical prostheses, at a clinical stage, to treat severe urinary incontinence and mitral valve pathology, announces today the great success of its capital increase with preferential subscription rights for shareholders ("PSR") through the issue of shares with redeemable equity warrants attached ("ABSAR"), the amount of which, including the issue premium, being approximately €13.7 million ("the Capital Increase"), after partial exercise of the extension clause.

Sébastien Ladet, Chief Executive Officer of Affluent Medical, said: "I truly thank all the shareholders, and especially our reference shareholder Truffle Capital, who demonstrated their confidence with their participation to this capital increase that contributed to its great success. The funds raised give us the resources to execute our business plan towards the next important 2023 clinical milestones for our three devices, to prepare the industrialization steps of KaliosTM and Artus for commercial launch at the end of 2025. When our products reach the market, millions of patients around the world will be able to benefit from these innovative therapeutic solutions, unparalleled on the market today. Our medical devices will promote a better quality of life for patients, significantly altered by their severe pathologies: heart mitral valve disease and severe urinary incontinence."  

Results of the Capital Increase

At the end of the subscription period that ended on February 27, 2023, total demand amounted to 12,666,818 ABSARs, corresponding to approximately €17.1 million, i.e. an oversubscription rate of 131.5% before the extension clause was exercised:

• subscription orders made on an irreducible basis amounted to approximately €11.0 million, corresponding to 8,183,487 ABSARs and approximately 80.7% of ABSARs to be issued – They have been fully allocated;
• reducible subscription orders amounted to approximately €3.8 million, corresponding to 2,819,165 ABSARs and approximately 19.3% of ABSARs to be issued – They are allocated approximatively to €2.7 million;
• open subscriptions totaled €2.3 million, corresponding to 1,664,166 ABSARs (including the subscription commitments of the 10 investors who had irrevocably committed to subscribe for the Capital Increase, in a total amount of €2,060,000, the ABSARs that would not have been subscribed for at the end of the subscription period on an irreducible, reducible or open basis in order to carry out the Capital Increase at 100%). Given the high demand for subscriptions on an irreducible and reducible basis, the open subscriptions cannot be allocated.

The Company thus decided to partially exercise the extension clause allowing for the creation of additional 512,428 ABSARs, and therefore the allocation of some of the subscriptions on a reducible basis.

The gross amount of the Capital Increase is therefore €13,697,707.50 through the issue of 10,146,450 ABSARs at a unit subscription price of €1.35.

The net proceeds of the Capital Increase (excluding the potential exercise of the redeemable warrants - BSARs), in the amount of €12.9 million, will enable Affluent Medical to extend the Company's cash horizon to November 2023 and will be used to:

• initiate and potentially finalize patient enrollment for the Minerva pilot study of the Epygon transcatheter mitral valve replacement medical device and the development of associated ancillaries;
• finalize the enrollment of patients in the Optimise II clinical trial and the preparation of the industrialization of the KaliosTM medical device for mitral valve repair;
• finalize the validations of the Artus medical device for the treatment of moderate to severe urinary incontinence and the start of the Dry pilot study;
• repay the Group's financial debts (Bpifrance innovation loan, Bpifrance repayable advances for the Mivana project and various state-guaranteed loans).

The settlement-delivery of the new shares and BSARs is scheduled for March 6, 2023.

The new shares and BSARs will be admitted to trading on the regulated market of Euronext Paris from March 6, 2023. The new shares will be admitted on the same quotation line as existing shares under the ISIN code: FR0013333077, and BSARs will be admitted to a separate quotation line under the ISIN code: FR001400FL38.

As a reminder, the BSARs may be exercised at any time until December 31, 2025.
(8) BSARs will give the right to subscribe for one (1) new share (the "Exercise Ratio"), subject to payment of an exercise price of:

• €1.50 between March 6, 2023 and December 5, 2023; then
• €1.95 between December 6, 2023 and December 31, 2025.

If all of the BSARs are exercised at the respective prices of €1.50 and €1.95 per new share, the gross amount of the capital increase would reach €1.9 million and €2.5 million, respectively.

New shares resulting from the exercise of BSARs will be subject to periodic requests for admission to trading on the Euronext Paris market on the same quotation line as the Company's existing shares under the same ISIN code FR0013333077.

Company financing beyond November 2023

The Company will continue to face the challenge of its financing beyond November 2023, with an estimated net uncovered shortfall of €3.3 million at 12 months. Affluent Medical intends as a priority to remedy this shortfall by seeking new financing solutions, in particular through the implementation of a venture loan in the amount of €6 million, for which discussions have been initiated, through a capital increase depending on market conditions, or through non-dilutive financing within the framework of an innovation aid scheme in the form of subsidies and reimbursable advances aimed at financing clinical programs.

Breakdown of share capital and voting rights following the Capital Increase

The Company’s share capital after the capital increase will total €30,896,652 divided into 30,896,652 shares with a nominal value of €1 each.

To the knowledge of the Company, the distribution of capital and voting rights following the Capital Increase is as follows:

* Including the exercise of 230,632 warrants, 3,529,832 BSPCE and 10,146,450 BSAR as well as the definitive acquisition of 1,300 shares allocated free of charge, entitling the holder to a maximum number of 5,328,393 shares of the Company.

Truffle Capital participated in the Capital Increase for €6.0 million by subscribing on an irreducible basis per exercise of the PSR held and €2.6 million on a reducible basis, i.e. a total amount of €8.6 million, corresponding to 63.00% of the Capital Increase amount.

Mr. Sébastien Ladet and Mr. Christophe Giot, respectively Chief Executive Officer and Vice President Clinical Affairs, who had committed to subscribe to the Capital Increase for 20,000 euros and 15,000 euros, participated in the latter on an irreducible basis by subscribing for the same amounts.

The 10 investors committed within the framework of open subscriptions to subscribe, for a global amount of 2,060,000 euros, the ABSAR which would not have been subscribed for at the end of the irreducible, reducible or open subscription period in order to carry out the Capital Increase at 100 % have not been allocated, considering the irreducible and reducible applications exceeding this threshold.

Indicative timetable for the Capital Increase

Company lock-up agreement

From 180 calendar days following the settlement-delivery date of the ABSARs, subject to certain exceptions and until December 31, 2023, the Company has undertaken to not issue shares or securities giving access to capital as part of financing through an Equity Line or OCABSA (bonds convertible into shares with warrants attached).

Shareholders’ retention undertaking

Truffle Capital has undertaken to retain, subject to certain usual exceptions, the Affluent Medical shares that it held before the Capital Increase for a period ending 270 calendar days following the settlement-delivery date of the Capital Increase and the Affluent Medical ABSARs that may be subscribed in connection with the transaction for a period ending 180 calendar days following the settlement-delivery date of the Capital Increase.

Capital Increase Partners

Information available to the public

The terms of the Capital Increase with the maintenance of shareholders' preferential subscription rights are described in the prospectus approved by the Autorité des Marchés Financiers ("AMF") under number 23-029 dated February 8, 2023 (the "Prospectus"). This Prospectus is composed of Affluent Medical's 2021 Universal Registration Document approved by the AMF on April 29, 2022 under number R.22-017 (the "2021 Universal Registration Document"), the amendment to the 2021 Universal Registration Document approved by the AMF on February 8, 2023 under the number 23-003 (the "Amendment"), and the offering notice (including the summary of the prospectus) relating to the Capital Increase.

The Company draws the public's attention to the risk factors set out in section 2 of the offering notice and in sections 3 of the 2021 Universal Registration Document and the Amendment, in particular the liquidity risk, which states that Affluent Medical does not have sufficient net working capital to meet its obligations and operating cash requirements over the next twelve months, even after the Capital Increase with preferential subscription rights, as its cash enables it to finance its operations until November 2023, with the residual need not covered being estimated at €3.3 million.