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    MDXH   BE0003844611

MDXHEALTH SA

(MDXH)
  Report
Real-time Euronext Bruxelles  -  11:13 2022-12-06 am EST
0.6360 EUR   -0.31%
11/29MDxHealth Provides Business Update
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Board Report in relation to the capital increase of 8 November 2021 (ENG)

10/27/2021 EST

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 ARTICLE

7:198 JUNCTO ARTICLES 7:179 §1, 7:191 AND, INSOFAR AS NEEDED AND

APPLICABLE, 7:197 OF THE BELGIAN COMPANIES AND ASSOCIATIONS CODE

____________________________________________________

1. INTRODUCTION

This report has been prepared by the board of directors of MDxHealth SA (the "Company") in accordance with Article 7:198 juncto Articles 7:179, 7:191 and, insofar as needed and applicable, 7:197 of the Belgian Companies and Associations Code of 23 March 2019 (as amended from time to time) (the "Belgian Companies and Associations Code").

It relates to the proposal of the board of directors to increase the share capital of the Company within the framework of the authorised capital, with a maximum amount of EUR 60,000,000.00 (i.e., for illustration purposes, USD 69,708,000.001) (including issue premium, as the case may be) through the issuance of new shares, the maximum number and the issue price of which are still to be determined, and 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), in connection with the proposed issuance of new shares. All or part of the new shares will be represented by American Depositary Shares ("ADSs"), which are to be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and are to be listed on the Nasdaq Capital Market. The number of new shares to be represented by one ADS is still to be determined. The new shares, represented by ADSs as the case may be, are to be offered (i) via an initial public offering to retail and institutional investors in the United States (the "US Offering"), and potentially (ii) via private placements with qualified, professional, institutional and other investors, as the case may be, in countries and jurisdictions outside of the United States in accordance with applicable securities laws and regulations (the "Non-USOffering" and together with the US Offering, the "Transaction" or the "Offering").

The new shares are to be subscribed for in cash. The issue price is to be paid in full upon issuance of the new shares. Within the framework of the Transaction, the final subscription price of the ADS shall be expressed in U.S. dollars ("USD"). In view hereof, it will be made possible that the issue price of the new shares can, at the time of the issuance of the shares, be

paid (in whole or in part) by means of a payment of the relevant amounts in USD. However, as the Company's share capital is expressed in euro ("EUR") in the Company's articles of

1The reporting currency of the Company's financial statements is U.S. dollar. Unless indicated otherwise in this report, amounts in U.S. dollar in this report have been converted into euro at the currency exchange rate published by the European Central Bank on 26 October 2021, being EUR 1.00 for USD 1.1618.

1

English translation - For information purposes only

association, in the event the issue price of the new shares is paid in USD, the value of the amounts paid in USD, the issue price of the new shares to be issued in the Transaction and the allocation of the issue price (as share capital and issue premium, as the case may be) shall be expressed in EUR, for the purpose of the capital increase and the amendment of the Company's articles of association, as further described below.

In accordance with Article 7:198 juncto Article 7:179 §1 of the Belgian Companies and Associations Code, the board of directors provides in this report a justification of the proposed Transaction, with notably a justification of the proposed issue price of the new shares to be issued 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 7:198 juncto 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) in connection with the proposed increase of the share capital in the framework of the Transaction and a description of the consequences thereof for the financial and shareholder rights of the shareholders.

Technically, the payment of the issue price of the new shares (in whole or in part) in USD could also be qualified as a contribution in kind (instead of a contribution in cash), because the Company's share capital is currently expressed in EUR. Hence, insofar as needed and applicable, in accordance with Article 7:198 juncto Article 7:197 of the Belgian Companies and Associations Code, the board of directors also provides in this report a justification of the interest of the contribution in kind, a description of the contribution and a motivated valuation, and the remuneration granted for the contribution.

This report must be read together with the report in accordance with Article 7:198 juncto Articles 7:179 §1 and 7:191 of the Belgian Companies and Associations Code and, insofar as needed and applicable, the report in accordance with Article 7:198 juncto Articles 7:179 §1 and 7:197 of the Belgian Companies and Associations Code, both of which reports were prepared by the Company's statutory auditor, BDO Réviseurs d'Entreprises SRL, a cooperative company with limited liability 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.

2. AUTHORISED CAPITAL

2.1. Description of the authorised capital

By virtue of the resolution of the extraordinary general shareholders' meeting of the Company held on 27 May 2021, as published by excerpt in the Annexes to the Belgian Official Gazette of 1 June 2021 under number 21333389, the board of directors of the Company has been granted certain powers to increase the Company's share capital in the framework of the authorised capital. The powers under the authorised capital have been set out in Article 6 of the Company's Articles of Association.

In the framework of this authorisation granted by the extraordinary general shareholders' meeting, the board of directors is authorised to increase the share capital of the Company in one or more transactions with a maximum amount of EUR 90,132,067.69 (excluding issue premium), for a period of five years as from 27 May 2021.

The capital increases that can be effected in accordance with the aforementioned authorisation can take place by means of contributions in cash or in kind, by capitalisation of reserves, whether available or unavailable for distribution, and capitalisation of issue premiums, with or without the issuance of new shares, with or without voting rights, that will have the rights as

2

English translation - For information purposes only

will be determined by the board of directors. The board of directors is also authorised to use this authorisation for the issuance of convertible bonds or subscription rights, bonds with subscription rights or other securities.

The board of directors is authorised, when exercising its powers within the framework of the authorised capital, to restrict or cancel, in the interest of the Company, the preferential subscription rights of the shareholders. This restriction or cancellation of the preferential subscription rights can also be done in favour of members of the personnel of the Company or of its subsidiaries, or in favour of one or more persons other than members of the personnel of the Company or of its subsidiaries.

2.2. Available amount in the framework of the authorised capital

To date, the board of directors has not yet used its powers under the authorised capital. As a result, the board of directors still has the authority under the authorised capital to increase the share capital of the Company with an aggregate amount of EUR 90,132,067.69 (excluding issue premium, as the case may be).

3. PROPOSED TRANSACTION

3.1. Structure of the Transaction

In accordance with Article 6 of the Company's Articles of Association, the board of directors envisages to increase the share capital of the Company, within the framework of the authorised capital, with a maximum amount of EUR 60,000,000.00 (i.e., for illustration purposes, USD 69,708,000.001) (including issue premium, as the case may be), through the issuance of new shares represented by ADSs as the case may be, the maximum number and the issue price of which are still to be determined.

All or part of the new shares will be represented by ADSs, which are to be registered under the Securities Act and are to be listed on the Nasdaq Capital Market. The number of new shares to be represented by one ADS is still to be determined.

The new shares, represented by ADSs as the case may be, are to be offered (i) via an initial public offering to retail and institutional investors in the United States, and potentially (ii) via private placements with qualified, professional, institutional and other investors, as the case may be, in countries and jurisdictions outside of the United States in accordance with applicable securities laws and regulations, as further referred to in paragraph 3.2.

It is currently contemplated that the new shares and ADSs will be offered by one or more financial institutions, including Piper Sandler & Co. ("Piper Sandler"), which shall act as underwriters of the Transaction (the "Underwriters"). The Underwriters shall have the ability to subscribe for the new shares and ADSs, in the name of and/or on behalf of the ultimate subscribers for the new shares and ADSs, or in their own name or on their own behalf, in order to place the new shares and ADSs with the ultimate subscribers for such shares and ADSs. The terms pursuant to which the new shares and ADSs will be offered and placed will be set out in a separate purchase agreement or underwriting agreement to be entered into between the Company and the Underwriters (or Piper Sandler, acting on behalf of the Underwriters) (the "Purchase Agreement"). The board of directors, or the placement committee that shall be established by the board of directors (the "Placement Committee"), will have the power to determine the terms and conditions of the Purchase Agreement that is to be entered into within the context of the Transaction.

The board of directors or Placement Committee will have the power to offer the new shares and ADSs at one or several occasions in the Offering. Notably, the board of directors or Placement Committee will have the power to offer initially a number of new shares (and ADSs) that is less

3

English translation - For information purposes only

than the maximum number of new shares (and ADSs) that can be offered on the basis of the proposed maximum amount of the capital increase.

Furthermore, as part of the Offering, the board of directors or Placement Committee will have the ability to grant to one or more of the Underwriters the right, but not the obligation, to subscribe during a limited period of time, at one or several occasions, for additional new shares (to be represented by ADSs), at the final issue price that will be determined in the Offering, in order to cover over-allotments of ADSs made by the Underwriters within the framework of the Offering (the "Over-AllotmentOption"). The Underwriters may be granted the ability to make over-allotments of ADSs in the Offering in order to facilitate the Offering and to engage in transactions that stabilise, maintain or otherwise affect the price of ADSs during and after the offering. The terms of the ability for the Underwriters to make over-allotments in the Offering and the terms of the Over-Allotment Option are to be further set out in the Purchase Agreement (or similar agreement) to be entered into between the Company and the Underwriters (or Piper Sandler, acting on behalf of the Underwriters). No additional new shares can be issued or subscribed for pursuant to the exercise of the Over-Allotment Option, unless to the extent ADSs were over-allotted in the Offering and an equal number of new shares (or ADSs representing such shares) was initially or simultaneously subscribed for by investors in the Offering. In any event, the number of new shares (represented by ADSs, as the case may be) to be issued in the Transaction, including pursuant to the exercise of the Over-Allotment Option, cannot be greater than the number of new shares that can be issued pursuant to the proposed maximum amount of the capital increase, as aforementioned.

Subject to the foregoing, the proposed capital increase can be completed for up to all or part of the subscriptions that the Company will have received and accepted at the applicable issue price in the Offering, provided that the board of directors or Placement Committee so decides, at one or more occasions, through one or more successive notarial deeds establishing the relevant capital increase and issuance of new shares. If not all of the offered new shares (or ADSs) are subscribed for, the proposed capital increase can nevertheless be completed for up to all or part of the subscriptions that the Company will have received and accepted at the applicable issue price, provided that the board of directors or the placement committee so decides. Furthermore, even if all offered new shares (or ADSs) are subscribed for, the capital increase can be completed by issuing less shares than the number of subscriptions received by the Company at the applicable issue price, provided that the board of directors or the Placement Committee so decides. The board of directors or the Placement Committee may, for the avoidance of doubt, also decide not to complete the contemplated capital increase, even if all or part of the offered new shares (or ADSs) are subscribed for.

The subscription period for the new shares (and ADSs) as well as all other relevant terms and conditions shall be determined by the board of directors or the Placement Committee. The board of directors or the Placement Committee will be authorised to already increase the share capital of the Company at any time during the subscription period up to the number of subscriptions that the Company will already have received and accepted at that time. The board of directors or the Placement Committee is also authorised to lengthen or shorten the subscription period and/or to prematurely end the subscription period, at its sole discretion, even if the offered new shares have not or have only partially been subscribed for.

3.2. Dis-application of the preferential subscription right of the existing shareholders

In the framework of the contemplated capital increase, the board of directors proposes to dis- apply the preferential subscription right of the Company's existing shareholders and, insofar as required, of the Company's existing holders of subscription rights (share options), in accordance with Article 7:198 juncto Article 7:191 of the Belgian Companies and Associations Code, in order to allow for the offering of the newly issued shares (represented by ADSs, as the case may be) by the Underwriters (i) via an initial public offering to retail and institutional investors

4

English translation - For information purposes only

in the United States, and potentially (ii) via private placements with qualified, professional, institutional and other investors, as the case may be, in countries and jurisdictions outside of the United States in accordance with applicable securities laws and regulations.

While certain investors may have indicated an interest to buy ADSs in the Offering, prior to the Offering, no investors have received nor will receive any commitment or undertaking from the Company as regards to allocation of the new shares before the closing of the Offering.

  1. Issue price of the new shares
    The Underwriters shall be instructed by the Company to proceed with a bookbuilding procedure with investors that participate in the Offering. The board of directors or the Placement Committee shall determine the amount of the issue premium, as the case may be, by negotiation/in consultation with the Underwriters and shall consequently determine the final issue price (consisting of share capital, up to the amount of the fractional value, plus issue premium, as the case may be), inter alia taking into account the results of the bookbuilding procedure. In determining the issue price, the board of directors or Placement Committee can, without being obliged, make use of a price range that is determined prior to the start of the Offering. See also further in section 5 below.
  2. Payment, contribution and allocation of the issue price
    The new shares are to be subscribed for in cash. The issue price of the new shares is to be paid in full upon issuance of the new shares.
    Within the framework of the Transaction, the final subscription price of the ADS shall be expressed in USD. In view hereof, it will be made possible that the issue price of the new shares can, at the time of the issuance of the shares, be paid (in whole or in part) by means of a payment of the relevant amounts in USD. However, as the Company's share capital is expressed in EUR in the Company's articles of association, for the purpose of the capital increase and the amendment of the Company's articles of association, in the event the issue price of the new shares is paid in USD, the value of the amounts paid in USD, the issue price of the new shares to be issued and the allocation of the issue price (as share capital and issue premium, as the case may be) shall be expressed in EUR 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) on the business day preceding the date of the relevant notarial deed in which the issuance of the relevant shares and the corresponding capital increase is established (the "Exchange Rate"). The total issue price in euro will be rounded down to the nearest two decimals.
    The board of directors notes that, technically, the payment of the issue price of the new shares (in whole or in part) in USD could also be qualified as a contribution in kind (instead of a contribution in cash) of the relevant amount, because the Company's share capital is currently expressed in EUR. See notably the Annual Report 1991 of the Belgian Institute of Accountants (Institut des réviseurs d'entreprises) (page 77-78). Hence, insofar as needed and applicable, the procedure of article 7:197 of the Belgian Companies and Associations Code will also be applied.
    The final issue price shall be booked as share capital. However, the amount by which the issue price of the new shares shall exceed the fractional value of the existing shares of the Company (i.e., rounded EUR 0.7608) shall be booked as issue premium, as the case may be. This issue premium will be accounted for on the liabilities side of the Company's balance sheet as net equity. The account on which the issue premiums are booked shall, like the share capital, serve as the guarantee for third parties and, save for the possibility of capitalisation of these reserves,

5

Disclaimer

MDxHealth SA published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2021 20:46:05 UTC.


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