| Financial liabilities | Financial liabilities Financial liabilities break down as follows: (amounts in thousands of euros) FINANCIAL LIABILITIES AS OF DECEMBER 31, 2021 AS OF DECEMBER 31, 2022 AS OF DECEMBER 31, 2023 Kreos 1 & 2 bond loans 11,700 4,730 — Lease liabilities 43 839 160 PGE 4,715 3,558 2,402 Borrowings 16,458 9,127 2,563 Oceane 18,191 19,332 — Heights convertible notes — — 20,652 Kreos / Claret convertible notes (OCABSA) — — 21,643 Convertible loan notes 18,191 19,332 42,295 Kreos A & B BSA 4,003 424 — Oceane conversion option 5,929 142 — Derivative instruments 9,932 566 — Conditional advances Bpifrance 5,659 3,262 3,262 Royalty certificates — 3,287 12,229 Other financial liabilities 5,659 6,549 15,491 Total non-current financial liabilities 50,240 35,573 60,349 Kreos 1 & 2 bond loans 9,410 8,252 — Lease liabilities 170 545 379 PGE 27 1,280 1,276 Borrowings 9,608 10,077 1,655 OCEANE 625 625 — Heights convertible notes — — 8,952 Convertible loan notes 625 625 8,952 Conditional advances Bpifrance 1,112 3,521 3,509 Prosynergia earn-out liability — — — Other financial liabilities 1,112 3,521 3,509 Kreos / Claret BSA — — 2,579 Derivative instruments — — 2,579 Total current financial liabilities 11,345 14,224 16,696 Total financial liabilities 61,585 49,797 77,045 Note 15.1. Structured debt financing with Kreos & Claret subscribed in August 2023 – “Kreos / Claret Financing” On August 20, 2023, the Group entered into a structured debt financing agreement with Kreos and Claret (the Kreos / Claret Financing), for up to €75,000 thousand . The Kreos / Claret Financing consists of three tranches of €25,000 thousand each in aggregate principal a mount (of which only the first tranche has been drawn as of December 31, 2023): • The first tranche (“tranche A”) in aggregate principal amount of €25,000 thousand takes the form of senior secured convertible bonds with warrants attached (the “Kreos / Claret OCABSA”) and was drawn on August 22, 2023. The Kreos / Claret OCABSA are convertible into ordinary shares at any time from their issuance at the request of their holders at a fixed conversion price of €21.2209 , subject to standard adjustments, including anti-dilution and dividend protections. Interest on the Kreos / Claret OCABSA accrues at a 9.00% annual fixed interest rate, payable in quarterly installments. The Kreos / Claret OCBSA’s maturity date is March 31, 2027, it being specified that the scheduled date of final repayment is January 1, 2027. The Group is allowed to prepay the amounts due under the Kreos / Claret OCABSA at any time. In such case, the Group will be required to pay a sum equal to (i) the principal outstanding at the time of the prepayment (plus accrued interests), plus (ii) an aggregate of all remaining interest payments that would have been paid throughout the remainder of the term of the tranche, discounted to present value by applying a discount rate of 4% , plus (iii) an end-of-loan exit fee equal to 8.0% of the amounts drawn thereunder. In case of prepayment, the holders of the Kreos / Claret OCABSA will have the option to request a conversion of their Kreos / Claret OCABSA instead of a cash repayment, in which case, the end-of-loan exit fee is not payable by the Group. The warrants included in the Kreos / Claret OCABSA will only become exercisable in case of prepayment in cash of the Kreos / Claret convertible bonds by the Group. Upon exercise of the warrants, their holders will be able to subscribe to the same number of ordinary shares (and at the same price conditions) as they would have been able to subscribe had they converted the Kreos / Claret OCABSA which have been prepaid in cash. Any warrants not exercised on or prior to January 1, 2027 will become automatically null and void. For the avoidance of doubt, if the Group does not prepay any Kreos / Claret OCABSA in cash prior to their scheduled repayment dates, none of the warrants will be exercisable. • The second tranche (“tranche B”) in aggregate principal amount of €25,000 thousand takes the form of senior secured non- convertible bonds and was drawn on March 28, 2024 . The drawdown of the second tranche was subject to a maximum 10% Debt-To-Market Capitalization Ratio at the time of drawdown. The “Debt-To-Market Capitalization Ratio” is calculated on any relevant date, by dividing (i) the indebtedness of the Group (including amounts due under the Kreos / Claret Financing but excluding amounts due under the Heights Financing), by (ii) the market capitalization of the Group calculated by multiplying the number of outstanding ordinary shares by the closing price of the ordinary shares on such relevant date. • The third tranche (“tranche C”) in aggregate principal amount of €25,000 thousand takes the form of senior secured non- convertible bonds and may be drawn before July 31, 2024, subject to satisfaction of customary closing conditions. The drawdown of the third tranche is subject to a maximum 10% Debt-To-Market Capitalization Ratio at the time of drawdown (excluding the Heights Financing) and is conditional on the Group raising a minimum of $125,000 thousand in gross proceeds through a listing on Nasdaq before June 30, 2024. This condition was met on October 24, 2023 (see Note 3.3). A variable interest rate of 7.5% + European Central Bank Base Rate (MRO) (with a floor at 2.5% and a cap at 4% ) applies to the second and third tranche. These two tranches will be repaid monthly through March 31, 2027, after a deferred repayment of the principal (i) until October 1, 2024, for the second tranche, or February 1, 2025, if the conditions to draw the third tranche are met, and (ii) until February 1, 2025, for the third tranche. The Group is allowed to prepay the amounts due under the second and third tranches of the Kreos / Claret Financing at any time. In such case, The Group will be required to pay a sum equal to (i) the principal outstanding at the time of the prepayment (plus accrued interests), plus (ii) an aggregate of all remaining interest payments that would have been paid throughout the remainder of the term of the applicable tranche, discounted to present value by applying a discount rate of 4% , plus (iii) an end-of-loan exit fee equal to 6.0% of the amounts drawn under the applicable tranche. The Kreos / Claret Financing provides for certain restrictive covenants (subject to customary exceptions) which include, among other things, restrictions on the incurrence of indebtedness, cross-default, the distribution of dividends and the grant of security interests. As security for the Kreos / Claret Financing, the lenders benefit from the grant of first-ranking collateral on The Group’s principal tangible and intangible assets, including pledges over The Group’s business ( fonds de commerce ) as a going concern and intellectual property rights in The Group's lead drug candidate, as well as pledges over The Group’s bank accounts and receivables. Such securities apply to all tranches of the Kreos / Claret Financing. In addition to the Kreos / Claret OCABSA, the Group has issued warrants (the “tranche A-B BSA”) for a global subscription price of €1.00 , giving Kreos and Claret the right to subscribe to up to 214,198 new ordinary shares at an exercise price of €18.6744 (corresponding to a 10% premium over the 15-day VWAP prior to the date on which their issuance was decided). On November 2, 2023, a second tranche of 405,832 Kreos / Claret warrants (the “tranche C BSA”) was issued. The exercise price of the additional warrants is equal to approximately €9.86 (corresponding to 110% of the 15-day VWAP prior to the date on which their issuance was decided). The number of warrants issued corresponds to €4,000,000 divided by the aforementioned exercise price (i.e. 405,832 warrants) . Of these additional warrants, 50% are exercisable immediately and the remaining 50% (“the conditional warrants”) shall only be exercisable if the third tranche of the Kreos / Claret Financing is drawn by the Group. The Kreos / Claret warrants can be exercised over a period of 7 years from their issuance date or up until the date of the successful closing of a tender offer for the ordinary shares, whichever is earlier. At the time of exercise of the Kreos / Claret warrants, the holders of the warrants are eligible to sell part of their warrants to the Group in accordance with a put option agreement to allow for a cashless exercise. On August 22, 2023, the Group repaid in full the pre-existing debt agreements with Kreos for a total amount of €7,661 thousand . The accounting treatment of this transaction is explained in Note 15.3. Accounting treatment The Kreos / Claret OCABSA are issued at market conditions: the net issuance proceeds reflect the fair value of the instruments at inception. The OCABSA are compound instruments, split between (i) a debt component (then measured at amortized cost) and (ii) an equity component corresponding to the conversion option and the attached OCABSA warrants. As the adjustment provisions of the OCABSA conversion ratio are aimed at preserving the rights of the bondholders and are anti- dilutive in nature rather than a down-round protection, the Group determined that the conversion option of the OCABSA is considered to result in the delivery of a fixed number of shares, and is therefore an equity instrument (the equity component of the bonds). The OCABSA warrants were attached to each bond issued in the Tranche A closing and are not transferrable until after a prepayment. The OCABSA warrants become exercisable (i) upon the Group electing to prepay the bonds and (ii) in the event of the absence of the conversion notice from the bondholders for the full amount of the prepayment. As such, the warrants are not freely transferable until the prepayment is made. Thus, the OCABSA warrants are considered as an embedded component of the bonds rather than a separate stand-alone financial instrument. In all scenarios under which the exercisability conditions are satisfied, and whereby the bondholder’s option to elect to convert the bonds was considered, the number of total ordinary shares issuable upon warrant exercise as a result of prepayment and/or conversion option exercise remains fixed. Thus, the warrants represent an equity-classified component of the bonds. The issuer prepayment option was deemed closely related to the host debt instrument and therefore does not meet the definition of a derivative instrument to be bifurcated. The right granted to the Group to issue the amortized bonds under tranches B and C in the future, upon meeting certain conditions, does not meet the definition of a liability and is considered an off-balance sheet loan commitment received from the issuer. As the A-B and C warrants (the Kreos / Claret BSA) are contractually transferable separately from the bonds and are redeemable in a variable number of ordinary shares of the Group, they are classified as standalone derivative financial liabilities. As the A-B and C warrants (the Kreos / Claret BSA) represent compensation for the realized and future bond issuances of respectively tranches A-B and C and are an integral part of generating such bond issuances, the Group determined that they are in nature origination fees. As the A-B warrants are associated with both the OCABSA issued under tranche A and the amortized bonds issued under tranche B, the Group allocated the initial fair value of the A-B warrants based on the pro-rata value of the proceeds to be received under each tranche. The initial fair value of the A-B warrants allocated to tranche A will be deferred and accounted for as an adjustment to the EIR of tranche A debt component. Subsequent changes in the fair value will be recognized through profit or loss. The initial value of the A-B warrant allocated to tranche B accounted for as a derivative financial liability is deferred as prepaid expenses and will not be recognized in profit or loss until the occurrence of the drawdowns of tranche B, which is deemed probable by management. On November 2, 2023 (issuance date of the Kreos / Claret tranche C BSA), a derivative financial liability was recognized for their initial fair value with a counterparty in prepaid expenses. On that date, the Group, based on management’s latest projections, did not consider the drawdown of the tranche C bonds to be probable. Therefore, the amount of prepaid expenses allocated to the tranche C BSA is amortized on a straight-line basis over the period between November 2, 2023 and July 31, 2024 (the limit date for the drawdown of the tranche C bonds). Measurement of the debt and equity components of the OCABSA At inception, the fair value of the debt component of the OCABSA amounts to €23,995 thousand , using a market rate assumption of 12.6% . The equity component amounts to the difference between the whole instrument’s fair value at inception (its nominal value of €25,000 thousand ) and the standalone fair value of the debt component. Therefore, the equity component amounts to €1,005 thousand . It is not subsequently remeasur ed. On the same date, using the same assumptions and an increase in market rate by 100 bp would result in a decrease in the fair value of the debt component and an increase in the value of the equity compone nt by €624 thousand . Measurement of the Kreos / Claret tranche A-B-C BSA The Kreos / Claret tranche A-B and tranche C BSA are measured at fair value using a Black-Scholes valuation model. The model considers two probability-weighted scenarios, i.e. (i) the 7 -year expiry of the BSA and (ii) an earlier exercise upon a tender offer. The main data and assumptions are the following: Kreos/Claret Tranche A-B BSA - August 2023 AS OF AUGUST 22, 2023 (Tranche A-B) AS OF DECEMBER 31, 2023 Number of outstanding BSA 214,198 214,198 Exercise price per share €18.67 €18.67 Ordinary share price €17.10 €9.82 Exercise date 19/08/2030 (expiry) 18/02/2027 (tender offer) 19/08/2030 (expiry) 18/02/2027 (tender offer) 7-year expiry scenario probability 50 % 95 % Volatility 71.9% (expiry) 65.2% (tender offer) 59.5% (expiry) 64.9% (tender offer) Dividend — % — % Risk-free rate 3.00 % 2.30 % Fair value of issued Kreos/Claret Tranche A-B BSA 2,092 920 Kreos/Claret Tranche C BSA - November 2023 AS OF NOVEMBER 2, 2023 AS OF DECEMBER 31, 2023 Number of outstanding BSA 405,832 405,832 of which, number of conditional BSA 202,915 202,915 Exercise price per share €9.86 €9.86 Ordinary share price €8.89 €9.82 Exercise date 01/11/2030 (expiry) 18/02/2027 (tender offer) 01/11/2030 (expiry) 18/02/2027 (tender offer) 7-year expiry scenario probability 95 % 95 % Probability of Drawdown of Tranche C credit facility 30 % 30 % Volatility 67.3% (expiry) 64.3% (tender offer) 67.4% (expiry) 64.9% (tender offer) Dividend — % — % Risk-free rate 3.0 % 2.3 % Fair value of issued Kreos/Claret Tranche C BSA 1,493 1,659 As of August 20, 2023 (date of issuance of the tranche A-B BSA), using the same assumption with an increase of +1% volatility, € +1 share price, +1% risk-free rate or +5% in the probability of achieving the 7-year expiry scenario would result in an increase of the tranche A-B BSA fair value by respectively €48 thousand , €197 thousand , €64 thousand and €64 thousand . As of November 2, 2023 (date of issuance of the tranche C BSA), using the same assumption with an increase of +1% volatility, € +1 share price, +1% risk-free rate or +5% in the probability of achieving the 7-year expiry scenario would result in an increase of tranche A-B BSA fair value by respectively €28 thousand , €232 thousand , €42 thousand and €36 thousand . As of December 31, 2023, using the same assumption with an increase of +1% volatility, €+1 share price, +1% risk-free rate and +5% in the probability of achieving the 7-year expiry scenario would result in an increase of Kreos / Claret A-B and C BSA fair value by respectively €96 thousand , €401 thousand , €95 thousand and €76 thousand . Note 15.2. Heights convertible notes On August 20, 2023, the Group entered into a convertible notes subscription agreement with Heights, which provided for up to €75,000 thousand in financing, consisting in two tranches: • The first tranche (“tranche A”) of €35,000 thousand in aggregate principal amount was drawn on August 24, 2023 and is composed of 350 amortizing senior convertible notes with a nominal value of €100,000 each and a fixed conversion price of €23.7674 (corresponding to a 40% premium over the 15-day VWAP prior to the date on which their issuance is decided, and subject to standard adjustments, including anti-dilution and dividend protections). • The second tranche (“tranche B”) of €40,000 thousand in aggregate principal amount is composed of 400 amortizing senior convertible notes with a nominal value of €100,000 each, and a conversion price (if any) that will be equal to 130% of the 15- day VWAP immediately preceding the date on which their issuance will be decided. It may be drawn during the period from the date immediately following the three -month anniversary of the issuance of the first tranche to the first-year anniversary of the issuance of the first tranche (i.e. August 24, 2024), in up to two separate closings to provide the Group with additional flexibility to request a partial drawdown. The amount available for drawdown under the second tranche will be determined based on the Group’s market capitalization and the average daily valued traded of ordinary shares (“ADVT”) over the three-month period preceding the drawdown, as follows: Average market capitalization ADVT Maximum cumulated amount outstanding under both first and second tranches of the Heights Financing: At least €700,000 thousand At least €900 thousand €45,000 thousand At least €850,000 thousand At least €1,250 thousand €55,000 thousand At least €1,000,000 thousand At least €1,500 thousand €65,000 thousand Interest on the Heights convertible notes accrues at a 6.00% annual fixed interest rate payable in quarterly installments in cash or, at the option of the Group, in ordinary shares. The Heights convertible notes will be repaid through sixteen quarterly installment payments, beginning three months after their issuance date (corresponding, for the first tranche, to a final repayment date on August 24, 2027). Installments are payable in cash or, at the option of the Group, in ordinary shares. Any interest or installment payments in shares will be made on the basis of a share price equal to 90% of the Market Price of the ordinary shares at the time of payment, where “Market Price” refers to the arithmetic average of the daily volume weighted average price (“VWAP”) for the ordinary shares on the two ( 2 ) days with the lowest daily VWAPs out of the five ( 5 ) trading days immediately preceding the applicable date, but in no event greater than the VWAP of the ordinary shares on the applicable date. The Market Price may not be higher than the applicable conversion price. Issuances of ordinary shares may not be made at a price lower than a 15% discount to the 15-day VWAP at the time of the decision to issue the Heights convertible notes (i.e., €14.4303 per ordinary share.). The Heights convertible notes include the following conversion and settlement options: • Conversion at the option of the noteholders: the notes are convertible into the Group’s ordinary shares at the option of the noteholders at any time during the period beginning on the tranche A notes closing until the fifth business day prior to the maturity date. The ordinary shares issued would be equal to the product of (i) the conversion ratio in effect on the exercise date, (ii) a fraction, the numerator of which is the outstanding principal amount per note and the denominator of which is the initial principal amount of €100,000 per note, and (iii) the number of notes for which the conversion right has been exercised. • Settlement in shares at the option of the Group: the Group has the option to settle any interest or principal due with its own ordinary shares (with respect to all but not some of the notes outstanding), subject to a price limit. The ordinary shares issuable will be the lower of the conversion ratio or 90% of the fair market value of the Group’s ordinary shares. • Settlement in shares at the option of the noteholders (“SSO Investor Price Limit Option”): the noteholders may require a principal payment to be settled in shares in the event the share settlement price on any principal payment date is below the price limit in effect (initially €14.4303 , subject to adjustments as described in the key terms below) and the Cash Carve-Out (i.e. €13.125 million – the amount of cash permitted to be paid to Heights for principal payments) has been utilized such that it does not allow payment in full of the principal payment. The majority noteholder may agree to waive the cash payment (which would otherwise be deferred until the original maturity date) and require the Group to exercise the share settlement option for the principal payment required. A number of the ordinary shares issuable is based on the price limit in effect. • Repayment of the notes upon an Event of Default (as defined below): the noteholder may notify the Group of their decision to cause the notes to become payable at a price equal to the Early Redemption Amount (as defined below) upon an Event of Default. The Early Redemption Amount means an amount equal to the greater of (a) 120% of the outstanding principal of the note and (b) the market price of a number of shares issuable per note had the conversion right been exercised. Events of Default include the following: default in any payment due on the notes, failure to deliver shares upon exercise of conversion right or share settlement option, default of the Group on any obligation under the agreement, and other events. • Repayment or purchase of the notes upon change of control, a delisting, or free float event (each, a “Put Event”): Upon a Put Event, the noteholder has an option to require the Group to redeem or, at the Group’s option, to purchase all of the notes at the total aggregate amount equal to the outstanding principal and interest accrued through the date of a Put Event. The Heights Financing is a senior, unsecured financing. The terms and conditions of the Heights convertible notes include a standard negative pledge providing that any security granted in favor of other borrowed debt or debt instruments should also be granted in favor of the Heights convertible notes on an equal basis (with the exception of the securities issued pursuant to the Kreos / Claret Financing, as detailed above). On August 24, 2023, the Group repaid in full an outstanding amount of €25,102 thousand , corresponding to the outstanding OCEANE bonds, by way of set-off with the Heights Financing. The accounting treatment for this transaction is explained in Note 15.5. Accounting treatment and measurement The Group concluded that, except for the repayment or purchase option of the notes upon a Put Event, the above-mentioned conversion and settlement options represented embedded derivatives that required to be bifurcated from their host contract. The Group being unable to reliably value each embedded derivative at issuance date and on subsequent reporting dates, it measured the whole instrument at fair value through profit or loss (“FVTPL”) as permitted by IFRS 9. Instruments measured at FVTPL under these conditions are measured at their fair value on issuance and on subsequent reporting dates, and the amount of change in the fair value of the financial liability is presented in profit or loss. At inception, the Heights convertible notes were measured at fair value, which differs from the issuance procee ds by €2,359 thousand . Since the fair value measurement of the instrument is evidenced by a valuation technique that does not only use data from observable markets, the carrying amount was adjusted to defer the difference between the fair value measurement and the transaction price, and the day one gain is therefore recognized in f inancial income on a straight-line basis over the term of the instrument. As of December 31, 2023, the amount by which the carrying value of the notes is adjusted to take into account the unrecognized day one gain is €2,147 thousand . The fair value of the Heights convertible notes (including the embedded features) has been measured with a Monte Carlo model, considering two probability-weighted scenarios: (i) a Put Event or Default/Dissolution scenario and (ii) a voluntary conversion at maturity scenario. The main data and assumptions are the following: Heights convertible notes - August 2023 AS OF AUGUST 24, 2023 AS OF DECEMBER 31, 2023 Number of outstanding notes 350 350 Original principal amount (in thousands of €) 35,000 35,000 Interest rate 6 % 6 % Conversion price per share €23.77 €23.77 Ordinary share price €16.74 €9.82 Maturity date 24/08/2025 (put event) 24/08/2027 (HTM/voluntary conversion) 24/08/2025 (put event) 24/08/2027 (HTM/voluntary conversion) Held to maturity / voluntary conversion scenario probability 75 % 75 % Initial price limit €14.43 €14.43 Early redemption amount (put event) 120 % 120 % Volatility 50 % 50 % Credit spread 20 % 20 % Risk-free rate 2.9 % 2.3 % Fair value of Heights convertible notes (in thousands of €) 32,641 27,456 As of August 24, 2023, using the same assumptions with an increase of +1% volatility, €+1 share price, +1% risk-free rate and +1% probability of achieving the held to maturity scenario would result in a change in the Heights convertible notes fair value by respectively €+239 thousand , €+1,069 thousand , €-239 thousand and €-80 thousand . As of December 31, 2023, using the same assumptions with an increase of +1% volatility, €+1 share price, +1% risk-free rate and +1% probability of achieving the held to maturity scenario would result in a change in the Heights convertible notes fair value by respectively €+18 thousand , €+352 thousand , €-366 thousand and €-364 thousand . Note 15.3. Structured debt financing with Kreos subscribed in July 2018 – “Kreos 1” On July 24, 2018, the Group entered into a Venture Loan Agreement, a Straight Bonds Issue Agreement and a Convertible Bonds Issue Agreement with Kreos Capital V (UK) Ltd., (or “Kreos”), which provided for up to €20,000 thousand in financing. Pursuant to the terms of the agreements, Kreos agreed to subscribe for €16,000 thousand in non-convertible bonds and €4,000 thousand in convertible bonds, to be issued by the Group in two tranches of €10,000 thousand each. The tranches were issued in July 2018 and May 2019, respectively. The convertible bonds were convertible into new ordinary shares of the Group at any time from their issuance and at the discretion of their holders. In October 2020, Kreos required the conversion of all the convertible bonds they held ( 2,000,000 for Tranche A and 2,000,000 for Tranche B) and 464,309 shares were issued. Each tranche bears an 8% annual interest rate, plus 3-month Euribor, including a floor at 8% and a cap at 9% , and must be repaid in 54 monthly installments, after a deferred repayment of the nominal value to 12 months for the first tranche (“Tranche A”) and 6 months for the second tranche (“Tranche B”). In addition, each tranche bears exit fees of 9% of the total drawdown amount (i.e. €900 thousand per tranche), payable upon the last monthly installment (exit fees remain payable in full in case of early redemption). Pursuant to the terms of the agreements, the Group has the right, at any time but with no less than 30 days prior notice to Kreos, to prepay or purchase the non-convertible and convertible bonds, exclusively in full. The prepayment will be equal to (i) the principal amount outstanding, plus (ii) exit fees of 9% of the total draw down amount and (iii) the sum of all interest repayments which would have been paid throughout the remainder of the term of the relevant tranche discounted by 4% per annum. The agreements do not contain any financial covenants. In connection with each tranche, the Group issued 110,957 tranche A share warrants (or “Kreos A BSA”) and 74,766 tranche B share warrants (or “Kreos B BSA”), each, for a global subscription price of €1 . Each Kreos A BSA and Kreos B BSA gives rights to one new ordinary share at an exercise price of €7.21 less a discount and €10.70 less a discount, respectively. Both Kreos A BSA and Kreos B BSA are freely transferrable among financial institutions and are exercisable over a 10 -year period from the issue date. In addition, the Group granted to the holders of the Kreos A BSA and the Kreos B BSA the option to sell to the Group, upon each exercise of all or parts of the Kreos A BSA, at the put price defined in the agreement, a proportion of the number of the warrants, for the sole purpose of implementing a cash less exercise of the Kreos A BSA and Kreos B BSA. The variation in the Kreos 1 & 2 bond loans during the periods ended December 31, 2021 and 2022 is primarily related to reimbursements of capital and interests. As of December 31, 2022, the A tranche of the Kreos 1 bond loan has come to maturity and was repaid in full. On August, 21, 2023, the B tranche of the Kreos 1 bond loan as well as the A & B tranches of the Kreos 2 bond loan were repaid in full, for an amount of €7,661 thousand , using the proceeds from the new Kreos / Claret Fin ancing (see Note 3.3). The Group granted to the holders of the Kreos A BSA and the Kreos B BSA the option to sell to the Group, upon each exercise of all or parts of the Kreos A BSA, at the put price defined in the agreement, a proportion of the number of the warrants, for the sole purpose of implementing a cashless exercise of the Kreos A BSA and Kreos B BSA. On May 24, 2023, the holders opted for the cashless exercise option of the share warrants they held, implemented through the repurchase by the Group of 43,070 Kreos A BSA and 43,070 Kreos B BSA and the issuance by the Group of respectively 67,887 and 31,696 ordinary shares, as the result of the cashless exercise by Kreos of the outstanding 67,887 Kreos A & 31,696 B BSA. Accounting treatment The Kreos 1 financing package is issued at market conditions: the net issuance proceeds reflect the fair value of the instruments at inception. The straight bond tranches are split between i) a debt component (then measured at amortized cost), and ii) a premium corresponding to the initial fair value of attached BSA (then remeasured at fair value through profit and loss). The BSA attached to all tranches (both straight and convertible) do not meet the “fixed for fixed” criteria (non cash settlement option which may result in exchanging a variable number of shares, for a variable price), and are accounted for as standalone derivative instruments. The issuer prepayment options meet the definition of a separate derivative. However, their value at inception and subsequent dates is nil as per Schoenbucher model, and has no impact on the financial statements. As the differences identified between the terms of the Kreos 1 & 2 bond loans and the new Kreos / Claret Financing were considered substantial, the repayment transaction on August 21, 2023 was accounted for as a debt extinguishment. The repayment of the Kreos 1&2 bond loans led to the recognition of a loss on extinguishment amounting to €170 thousand , primarily due to (i) the payment of future interests as per the terms of the prepayment option and (ii) unamortized exit and issuance fees, reducing the carrying value of the liabilities. Measurement of Kreos A BSA & Kreos B BSA The Kreos A BSA and Kreos B BSA are measured at fair value using a Black-Scholes valuation model. The main data and assumptions are the following: Kreos A BSA - June 1, 2018 As of and for the year ended December 31, 2021 As of and for the year ended December 31, 2022 As of May 24, 2023 (exercise date) Number of outstanding Kreos A BSA 110,957 110,957 110,957 Exercise price per share €7.21 €7.21 €7.21 Ordinary share price €28.55 €6.18 €18.57 Residual maturity 6.6 years 5.6 years 0.0 years Volatility 46.65 % 44.01 % N/A Dividend — % — % N/A Risk-free rate 0.13 % 2.98 % N/A Fair value of issued Kreos A BSA (in thousands of €) 2,478 275 1,261 Kreos B BSA - June 1, 2019 As of and for the year ended December 31, 2021 As of and for the year ended December 31, 2022 As of May 24, 2023 (exercise date) Number of outstanding Kreos B BSA 74,766 74,766 74,766 Exercise price per share €10.70 €10.70 €10.70 Ordinary share price €28.55 €6.18 €18.57 Residual maturity 7.4 years 6.4 years 0.0 years Volatility 46.65 % 44.01 % N/A Dividend — % — % N/A Risk-free rate 0.13 % 2.96 % N/A Fair value of issued Kreos B BSA (in thousands |
