Subscription Agreement
On December 2, 2021, Celyad Oncology SA (the “Company”) entered into a Subscription Agreement (the “Subscription Agreement”) with CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, pursuant to which the Company agreed to sell to Fortress, in an unregistered offering, an aggregate of 6,500,000 ordinary shares, with no nominal value per share (“Ordinary Shares”) at a purchase price of $5.00 per share (the “Purchase Price”), which represents a 18.5% premium over the 30-day volume weighted average price of the Company’s American Depositary Shares on the Nasdaq Global Market (the “Private Placement”). The Private Placement is expected to close on or about December 8, 2021 (the “Closing Date”), subject to customary closing conditions. The Private Placement is expected to result in gross proceeds to the Company of approximately $32,500,000 excluding offering expenses. The Company intends to use the net proceeds from the Private Placement to fund research and development expenses, including the clinical development of its allogeneic CAR T candidates CYAD-101 and CYAD-211, to advance the current pipeline of preclinical CAR T candidates, to discover and develop additional preclinical product candidates using its proprietary non-gene edited short hairpin RNA (shRNA) technology platform, as well as for working capital, other general corporate purposes, and the enhancement of the Company’s intellectual property.
Shareholders’ Rights Agreement
In connection with the Subscription Agreement, the Company also entered into a Shareholders’ Rights Agreement (the “Shareholders’ Rights Agreement”) with Fortress, dated as of December 2, 2021. Pursuant to the Shareholders’ Rights Agreement, as long as Fortress continues to hold at least 10% of the Company’s outstanding Ordinary Shares, Fortress shall have the right to select two individuals to be, at Fortress’s option, either members of the Company’s Board of Directors (the “Board”) or non-voting observers of the Board. On the Closing Date, the Company will appoint to the Board one individual designated by Fortress, who shall be Ami Patel Shah. The Company also granted Fortress certain protective provisions related to the Company’s intellectual property portfolio.
Pursuant to the Shareholders’ Rights Agreement, Fortress also received a right of first offer on any new indebtedness to be incurred by Celyad and a pro rata right of first refusal on any new equity securities to be issued by the Company, as well as customary registration rights that it may exercise any time after the expiration of the Lockup/Standstill Period (as defined below).
Pursuant to the Shareholders’ Rights Agreement, Fortress has agreed to (i) a lock-up on sales of its Ordinary Shares purchased in the Private Placement and (ii) a standstill, both of which shall expire upon the earliest of (i) any Company EGM at which a Company EGM Proposal (both, as defined in the Shareholders’ Rights Agreement) fails to be approved by Company shareholders; (ii) the 90th day following the Closing Date if any Company EGM Proposal has not been approved by Company shareholders as of such date and (iii) nine months from the Closing Date (the “Lockup/Standstill Period”).
The Private Placement is exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. Fortress has agreed to acquire the Ordinary Shares for investment only and not with a view to or for sale in connection with any distribution thereof.
The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement and the Shareholders’ Rights Agreement, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 6-K.
