ANNUAL REPORT 2012 - TiGenix

Under the existing warrant plans, 135,802,
45,268, 454,570, 800,000, 400,000, 500,000,
500,000 and 4,000,000 warrants were
created in May 2004, April 2005, November
2005, February 2007, March 2008, June 2009,
March 2010 and July 2012 respectively.
Under the existing EPIB plans 415,700, 37,850,
61,479, 49,446 and 77,751 TiGenix SAU (then
still Cellerix) shares were created in June
2008, September 2008, November 2009, May
2010 and October 2010 respectively. These
shares were held by CX EBIP Agreement, SLU.
Under the 2004, 2005, 2007, 2008, 2009 and
2010 plans, in principle 25 % of the warrants
granted vests on each anniversary of the
date of the grant. Under the July 2012 plan,
in principle 1/3 rd of the warrants granted
vests on the first anniversary of the date of
the grant and 1/24 th of the remaining 2/3 rd of
the warrants granted vests on the last day of
each of the 24 months following the month
of the first anniversary of the date of the
grant. Under all plans, warrants granted will
only vest provided that the beneficiary still
has a relationship with the Company via an
employment contract, a director’s mandate
or another collaboration agreement. The
warrants can only be exercised once vested.
All warrants were granted for free. The
duration of the warrants is about 10 years as
of the respective issue date of the warrants.
Warrants that have not been exercised within
such periods become null and void.
The initial term of the warrants issued in
May 2004, April 2005 and November 2005
was extended to May 13, 2014, within the
limits and under the conditions set out in
article 47, §5 of the Law of March 26, 1999
regarding the Belgian action plan for the
employment 1998 as introduced by article 21
of the Economic Recovery Law of March 27,
2009. The other terms and conditions of the
respective warrants remained unchanged.
In the framework of the contribution of
all TiGenix SAU (previously Cellerix SA)
shares to TiGenix NV on May 3, 2011 (the
“Contribution”), CX EBIP Agreement, SLU
contributed its 642,226 TiGenix SAU shares
into TiGenix NV and received 1,905,144
TiGenix NV shares in return. Therefore,
as a result of the Contribution, CX EBIP
Agreement, SLU no longer holds TiGenix
SAU shares, but holds 1,905,144 TiGenix NV
shares instead. Pursuant to the agreements
reached in relation to the Contribution, the
underlying assets of the options are no longer
the TiGenix SAU shares, but the TiGenix NV
shares received by CX EBIP Agreement, SLU.
Therefore, upon the exercise of its options
under any of the EBIPs, a beneficiary will
receive a number of TiGenix NV shares
corresponding to approximately 2.96 shares
per option (rounded down to the nearest
integer) under any of the EBIPs.
5. Discussion of the main risks
and uncertainties
The main risks and uncertainties involved
in the Company’s business include the
following :
- TiGenix has a history of operating losses and
an accumulated deficit until today and
may never become profitable.
Prior to the business combination of the
Company with TiGenix SAU, TiGenix SAU had
created two Equity Based Incentive Plans
(“EBIPs”).
- TiGenix may need substantial additional
funding, which may not be available on
acceptable terms when required, if at all.
176 TiGenix I annual report 2012