ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

(d)(e)Duration: The Options Plan will have a maximum termof six years from 6 August 2007. Notwithstanding theaforementioned condition, if the Company’s shares arenot listed for trading, the options exercise period willcommence on the date that the shares are admitted totrading and will be extended to, at the latest, 6 August2015. Notwithstanding the aforementioned conditions,if there occurs a change in the controlling ownershipof the Company (within the meaning of “control” givenin Article 4 of the Spanish Securities Market Act), theOptions Plan will be deemed to have accrued, unlesspursuant to the request of the acquiring third party, theBeneficiaries agree with the acquirers to an additionaltransition period of up to one year.Maximum number of Cellerix shares includedin the Options Plan: No more than 453,550 of theCompany’s shares may be included in the Options Plan,representing 8% of the Company’s capital stock.The research business is complex and even risky. The desiredresults are not always obtained and “failures” occur; theimportant thing is to know how to react and be mindful of theneed for continuity and perseverance.11. Evolution of the businessCellerix is preparing a new business plan and will focus ondeveloping allogeneic programmes with eASCs (expandedadipose-derived stem cells). As previously mentioned, themost advanced programme is Cx601, which is in phase II fortreatment of fistulas in Crohn patients.These programmes target broader indications with a largerpotential market.Cellerix is working very closely with its directors on this newbusiness plan and both the investors and the managementteam believe in this new plan for the company.This limit will not be affected by the possible inclusion ofnew Beneficiaries in the future.(f) Option Plan coverage: To cover the Options Plan,the Company may resolve to issue new shares, useown shares held as treasury stock or contract a suitablefinancial instrument, and/or enter into the relevantcontracts with a reputable creditworthy financialinstitution or entity associated with the Company toallow future delivery of the Company shares to theBeneficiaries on exercise of their Options.(g) Previous compensation plans: From 2008, the EBIPwill replace all existing employee incentives.At 31 December 2008 said plan was in force.10. Post-balance sheet eventsThis new plan entails the elimination of 30 jobs directlyinvolved in the programmes which have not been halted(clinical trial phase III of Ontaril for Crohn and Cx501). The restof the company will focus on the programmes that are set tocontinue.As mentioned in section 3 above on financial information, inNovember the company concluded a capital increase of up to27 million euros, of which a first tranche of approximately 20%has been paid in.The two tranches pending disbursement are subject to thefulfilment of two conditions. The first (Tranche 2) is tied toapproval by two-thirds of the Board of a new business plan, andthe second (Tranche 3) to a possible initial public offering orcash assets to cover a period of time not to exceed 12 weeks.If both milestones are achieved, Cellerix will have financingthrough year-end 2012.In January 2010 the results were released of the phase III FATT 1Ontaril clinical trial for the Non-Crohn indication.The results were not as positive as expected as they indicatedthe difference in effectiveness between groups that receivedcells versus the group that only received fibrin was notsignificant. The drug’s safety, however, has continued tobe confirmed as excellent.8 • TiGenix • Rights Offering