ONWD Onward Medical NV

NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE PRESS RELEASE.

THIS PRESS RELEASE CONTAINS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE (7)(1) OF THE EUROPEAN MARKET ABUSE REGULATION (596/2014)

• Capital increase by issuance of New Shares designed to secure funding for the ARC-IM® and ARC-EX® development and regulatory approval, to establish a commercial organization for the ARC-EX US launch, to build quality, operations and other infrastructure capabilities, and to fund working capital requirements
• Offering for an indicative amount of €15 million composed of (i) a private placement to institutional investors and certain founders, management and members of the Board of Directors by way of an accelerated bookbuild offering via the Joint Bookrunners and (ii) a separate public offering for retail investors via the PrimaryBid platform only in France
• Existing shareholders INKEF Capital and EQT Life Sciences as well as certain founders, management and members of the Board of Directors to participate in the Accelerated Bookbuild Offering
• Issue price of €4.50 per new share, a 16.6% discount to 30-Day Volume Weighted Average Price (VWAP) from closing price of March 19, 20241”
• The Public Offering and the Private Placement are expected to be completed on March 21, 2024, before market open

ONWARD Medical N.V. (Euronext: ONWD, ISIN: NL0015000HT4) (the “Company” or “ONWARD Medical”), the medical technology company creating innovative spinal cord stimulation therapies to restore movement, function, and independence in people with spinal cord injury (SCI) and other movement disorders, announces today the launch of a capital increase by way of an accelerated bookbuild offering through a private placement with institutional investors and certain management and members of the Board of Directors (the “Private Placement”) and a separate public offering via the PrimaryBid platform with retail investors in France (the “Public Offering” and together with the Private Placement, the “Offerings”) of ordinary shares with a nominal value of EUR 0.12 each in the Company’s issued share capital.

1 Source: Euronext data

Reasons for the Offerings

The Company currently envisages using the net proceeds of the Offerings to:

• Fund research & development activities, including continued product development and regulatory approval of the investigational ARC-EX* System to restore hand and arm function and the investigational ARC-IM* System for improved blood pressure regulation (45%);
• Establish a commercial organization in preparation for expected US launch of the ARC-EX System in the second half of this year, including hiring a field sales organization, producing training and education materials, attending congresses and events, developing customer support capabilities, and conducting market access and reimbursement activities (15%);
• Build quality, operations and other infrastructure capabilities (35%); and
• Fund working capital requirements (5%).

The net proceeds from the Offerings are expected to extend the current cash runway of the Company into mid-2025, in particular the Company is of the opinion, taking into account the net proceeds from the Offerings, that it has sufficient working capital to meet its present requirements and cover the working capital needs for a period of at least 12 months following the date of this announcement.

Details of the Offerings

The Company proposes to issue new ordinary shares via

1. a Private Placement to certain existing shareholders of the Company, investors procured by the Joint Bookrunners and certain founders, members of the management and the Board of Directors of the Company and, separately,
2. a Public Offering only in France via the technology platform of PrimaryBid under an exemption from the requirement to publish a securities prospectus in advance of the Public Offering in reliance on Article 3(2) lit. b of Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”) (the “New Shares”).

The Public Offering will run in parallel with the Private Placement and the New Shares in the Private Placement and the Public Offering will be placed at the same issue price per New Share (the “Issue Price”). The Issue Price will be determined by the accelerated book-building initiated with institutional investors.

The New Shares will be offered outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and in the United States to “qualified institutional buyers” as defined in Rule 144A under the Securities Act in transactions exempt from, or not otherwise subject to, the registration requirements of the Securities Act in reliance on Section 4(a)(2) of the Securities Act.

The Public Offering will not extent to retail investors located outside of France.

The results of the Offerings, including the number of New Shares and the Issue Price will be announced upon completion of the bookbuilding process, which is expected prior to market opening on March 21, 2024, subject to acceleration or extension. The timing of the closing of the orderbook, pricing and allocations are at the absolute discretion of the Company and the Joint Bookrunners. In accordance with the authority granted to the Board of Directors by the Annual General Meeting, the issuance of the New Shares has been authorized by the Board of Directors.

The New Shares will be issued from the Company’s authorized capital under exclusion of the existing shareholders’ pre-emptive rights. It is the Company’s intention to raise gross proceeds of approximately €15.0 million from the Offerings, with an up to €5 million upsize option.

The Company expects the existing shareholders INKEF Capital and EQT Life Sciences (for an aggregated amount of together EUR 3 million) as well as the following management, founders, and members of the Board of Directors of the Company: Dave Marver, CEO; Robert Odell, VP Operations; Lorenzo Fanti, VP Legal; Co-Founders Jocelyne Bloch and Grégoire Courtine, CSO; and Directors Ian Curtis, Kristina Dziekan, and Fred Colen (for an aggregated amount of c. EUR 1 million) to support and participate in the Private Placement.

The book building process for the Private Placement will begin immediately following the publication of this press release. The Public Offering will begin immediately and close at 10 pm CET, subject to acceleration.

The size of the Offerings will depend exclusively on the orders received for the Private Placement and the Public Offering, with no possibility of reallocating the amounts allocated from one to the other. The Public Offering is ancillary to the Private Placement and will not exceed a value representing 20% of the value of the Offerings and will be limited to a maximum of EUR 8 million. Allocations of New Shares for the Public Offering will be proportional to demand, subject to reduction of allocations if demand exceeds the aforementioned limit. In any event, the Public Offering will not be carried out if the Private Placement does not take place.

Within the framework of the Public Offering, investors may only subscribe via the PrimaryBid partners mentioned on the PrimaryBid website (www.PrimaryBid.fr). The Public Offering is not covered by a placement agreement. For further details, please go to the PrimaryBid website at www.PrimaryBid.fr.

Bryan, Garnier & Co is acting as Sole Global Coordinator and, together with Bank Degroof Petercam SA/NV and KBC Securities NV, as Joint Bookrunners (the “Joint Bookrunners”) of the Private Placement.

In relation to the Offerings, the Company has agreed with the Joint Bookrunners to a 90-day standstill period on future share issuances waivable by the Joint Bookrunners and subject to customary exceptions. Certain members of the Board of Directors and John Murphy have agreed with the Joint Bookrunners to a market customary 180-day lock-up period waivable by the Joint Bookrunners and subject to customary exceptions.

Subject to acceleration or extension, the New Shares are expected to be listed and admitted to trading on Euronext Brussels and Euronext Amsterdam on March 25, 2024 and payment and delivery of the New Shares are expected to take place on March 25, 2024. The New Shares will rank pari passu in all respects with the existing ordinary shares in the Company and will be immediately fungible with the existing shares of the Company. The New Shares will be traded on the ISIN Code NL0015000HT4.

*All ONWARD Medical devices and therapies, including but not limited to ARC-IM®, ARC-EX®, ARC-BCI™, and ARC Therapy™, alone or in combination with a brain-computer interface (BCI), are investigational and not available for commercial use.

Prospectus

The New Shares to be issued in connection with the Offerings will be admitted to trading on the regulated market with a primary listing on Euronext in Brussels and a secondary listing on Euronext in Amsterdam based on a listing prospectus to be submitted for approval to the Dutch Authority for the Financial Markets (Stichting Autoriteit Financiële Markten, the “AFM”). As from the filing with the AFM, copies of the listing prospectus will be available free of charge on the Company’s website ONWD.com and on the AFM website afm.nl. The Public Offering, which benefits from an exemption from the prospectus requirement, is not carried-out on the basis of a prospectus subject to the approval of the AFM or the French Authority for the Financial Markets (Autorité des marchés financiers).

Risk Factors

The Company draws the public’s attention to the risk factors related to the Company’s business, results of operations, financial condition and prospects. In selecting and ordering the risk factors, the Company has considered circumstances such as the probability of the risk materializing on the basis of the current state of affairs, the potential impact which the materialization of the risk could have on the Company’s business, financial condition, results of operations and prospects, and the attention that management of the Company would on the basis of current expectations have to devote to these risks if they were to materialize.

The main risk factors include:

• The Company is wholly dependent on the success of two investigational devices, the ARC-IM and ARC-EX platforms. Even if the Company is able to complete clinical development and obtain favorable clinical results for the initial indications it is pursuing, it may not be able to obtain regulatory clearance or approval for, or successfully commercialize, its ARC-IM and ARC-EX platforms;
• The Company has incurred significant operating losses since inception, and expects to incur operating losses in the future, and it may not be able to achieve or sustain profitability, which may adversely affect the market price of its ordinary shares and ability to raise capital and continue operations;
• The Company will require additional capital to finance its planned operations, which may not be available to it on acceptable terms or at all. This may adversely affect the Company’s sales and marketing plan, its ongoing research and development efforts and have a material adverse effect on its business, financial condition, and result of operations;
• The Company may face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than it does;
• Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside the Company’s control, which could cause significant delays in the completion of such trials or may cause it to abandon one or more clinical trials;
• The Company must solve technical and engineering challenges prior to being able to offer a commercialized product to the SCI patient population. In addition, the Company must obtain FDA clearance or approval before it can sell any of its products in the United States and CE Certification before it can sell any of its products in the European Union. Approval of similar regulatory authorities in countries outside the United States and the European Union is required before it can sell its products in countries that do not accept FDA clearance or approval or CE Certification. The Company may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of its products if such clearance or approval is denied or delayed;
• If the Company obtains clearance or approval for its products, their commercial success will depend in part upon the level of reimbursement it receives from third parties for the cost of its products to users;
• If its investigational devices are cleared or approved, the Company will need to receive access to hospital facilities and clinics, or its sales may be negatively impacted;
• The Company may not receive the necessary approvals, granted de novo classifications, or clearances for its ARC-EX and ARC-IM platforms or future devices and expanded indications, and failure to timely obtain these regulatory clearances or approvals would adversely affect its ability to grow its business;
• The clinical development process required to obtain regulatory clearances or approvals is lengthy and expensive with uncertain outcomes, and the data developed in those clinical trials is subject to interpretation by FDA and foreign regulatory authorities. If clinical trials of the current ARC-EX platform and ARC-IM platform and future products do not produce results necessary to support regulatory clearance or approval, a granted de novo classification or clearance in the United States or, with respect to the Company’s current or future products, elsewhere, it will be unable to commercialize these products and may incur additional costs or experience delays in completing, or ultimately be unable to complete, the commercialization of those products;
• Part of the Company’s assets, including intellectual property is pledged to Rijksdienst voor Ondernemend Nederland (RvO part of Dutch ministry of Economic Affairs), and the enforcement of such pledge could substantially harm the future development and operations of the Company; and
• The Company licenses certain technology underlying the development of its investigational devices and the loss of the license would result in a material adverse effect on its business, financial position, and operating results and cause the market value of its ordinary shares to decline.

In addition, investors are invited to consider the following risks:

• The payment of any future dividends will depend on the Company’s financial condition and results of operations, as well as on the Company’s operating subsidiaries’ distributions to the Company.
• Future offerings of debt or equity securities by the Company, or future sales of a substantial number of ordinary shares by the Company’s shareholders, or the perception thereof, may adversely affect the market price of the ordinary shares and any future issuances of Shares may dilute investors’ shareholdings.
• Shareholders outside the Netherlands may not be able to exercise pre-emptive rights in future offerings.
• The rights and responsibilities of a shareholder are governed by Dutch law and will differ in some respects from the rights and obligations of shareholders under the laws of other jurisdictions and the shareholder rights under Dutch law differ from the rights of a shareholder under the laws of other jurisdictions.
• Certain significant shareholders of the Company after the Listing may have different interest from the Company and may be able to control the Company, including the outcome of shareholder votes.
• If securities or industry analysts do not publish research or reports about the Company’s business or industry, or if such analysts (if any) change their recommendations regarding the ordinary shares adversely, the market price and trading volumes of the ordinary shares could decline.
• The market price of the ordinary shares may be volatile and may be affected by a number of factors, some of which are beyond the Company’s control.

About ONWARD® Medical

ONWARD Medical is a medical technology company creating therapies to restore movement, function, and independence in people with spinal cord injury (SCI) and movement disabilities. Building on more than a decade of science and preclinical research conducted at leading neuroscience laboratories, the Company has received ten Breakthrough Device Designations from the US Food and Drug Administration for its ARC Therapy™ platform.  

ONWARD® ARC Therapy, which can be delivered by external ARC-EX® or implantable ARC-IM® platforms, is designed to deliver targeted, programmed spinal cord stimulation. Positive results were presented in 2023 from the Company’s pivotal study, called Up-LIFT, evaluating the ability for transcutaneous ARC Therapy to improve upper extremity strength and function. The Company is now preparing regulatory approval submissions for ARC-EX for the US and Europe. In parallel, the Company is conducting studies with its implantable ARC-IM platform, which demonstrated positive interim clinical outcomes for improved blood pressure regulation, a component of hemodynamic instability, following SCI. Other ongoing studies include combination use of ARC-IM with a brain-computer interface (BCI) to address multiple symptoms of SCI.   Headquartered in Eindhoven, the Netherlands, ONWARD Medical has a Science and Engineering Center in Lausanne, Switzerland and a US office in Boston, Massachusetts. The Company also has an academic partnership with NeuroRestore, a collaboration between the Swiss Federal Institute of Technology (EPFL) and Lausanne University Hospital (CHUV). 

ONWARD Medical is listed on Euronext Brussels and Amsterdam (ticker: ONWD).

For more information, visit ONWD.com and connect with us on LinkedIn and YouTube.

For Company Enquiries:info@onwd.com

For Media Enquiries:Aditi Roy, VP Communications media@onwd.com

For Investor Enquiries:Khaled Bahi, Interim CFO investors@onwd.com

Disclaimer

Certain statements, beliefs, and opinions in this press release are forward-looking, which reflect the Company’s or, as appropriate, the Company directors’ current expectations and projections about future events. By their nature, forward-looking statements involve several risks, uncertainties, and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition, and technology, can cause actual events, performance, or results to differ significantly from any anticipated development. Forward-looking statements contained in this press release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions, or circumstances on which these forward-looking statements are based. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person’s officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. All ONWARD Medical devices and therapies referenced here, including but not limited to ARC-IM®, ARC-EX®, ARC Therapy™, and ARC-BCI™ are investigational and not available for commercial use.

Additional important information

These materials may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not contain, constitute or form part of an offer of securities for sale or a solicitation of an offer to purchase securities (the “Securities”) of ONWARD Medical N.V. (the “Company”), in the United States, Australia, Canada, Japan or any other jurisdiction in which such offer or solicitation is unlawful. The Securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). There will be no public offering of the Securities in the United States. The Securities of the Company have not been, and will not be, registered under the Securities Act. The Securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan subject to certain exceptions. No public offering of the securities will be made in the United States.

This document (and the information contained within) is an advertisement and not a prospectus within the meaning of the Regulation (EU) 2017/1129 in each member state (“Member State”) of the European Economic Area (the “Prospectus Regulation”). The Company has not authorised any offer to the public of Securities in any Member State of the European Economic Area other than in France. With respect to each Member State (each a “Relevant State”), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant State. As a result, the Securities may and will only be offered in Relevant States (i) to any legal entity which is a qualified investor as defined in the Prospectus Regulation; or (ii) in any other circumstances falling within Article 1(4) or Article 3(2) lit. b of the Prospectus Regulation. For the purpose of this paragraph, the expression “offer of securities to the public” means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable the investor to decide to exercise, purchase or subscribe for the Securities.

This document (and the information contained within) is an advertisement and not a prospectus within the meaning of Regulation (EU) 2017/1129, as it forms part of U.K. domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “U.K. Prospectus Regulation”). No action has been undertaken or will be undertaken that constitutes an offer of the securities referred to herein to the public in the United Kingdom or requires the publication of a prospectus in the United Kingdom. The securities referred to herein may not and will not be offered in the United Kingdom, except to relevant persons in accordance with the exemptions set forth in the U.K. Prospectus Regulation.

In the United Kingdom, this document is only being distributed to and is only directed at persons who are “qualified investors” within the meaning the U.K. Prospectus Regulation, and who are also (i) investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), or (ii) high net worth companies, unincorporated associations and other bodies to whom it may otherwise lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order, or (iii) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.This communication is not a prospectus for the purposes of the Prospectus Regulation. This communication cannot be used as basis for any investment agreement or decision. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing the entire amount invested. Persons considering making such investments should consult a person specializing in advising on such investments. This announcement does not constitute a recommendation concerning the securities referred to herein.

No announcement or information regarding the offering, listing or securities of the Company referred to above may be disseminated to the public in jurisdictions where a prior registration or approval is required for such purpose. No steps have been taken, or will be taken, for the offering or listing of securities of the Company in any jurisdiction where such steps would be required, except for the admission of the offered shares on the regulated market of Euronext Brussels and Amsterdam. The issue, exercise, or sale of, and the subscription for or purchase of, securities of the Company are subject to special legal or statutory restrictions in certain jurisdictions. The Company is not liable if the aforementioned restrictions are not complied with by any person.