The SPINEWAY group, aware of the risks of a downward trend in the post consolidation share price, had voluntarily deferred the use of the reverse split until now. The wish was to use the consolidation of shares at the right moment when significant announcements would create value and could counterbalance this possible risk, which no company can completely control. Thus, the group waited to make two acquisitions, including a major one on 21 July 2022, to see its sales and marketing actions bear fruit with a return to organic growth, and to resume innovation as part of a Premium product strategy. Similarly, the company has announced that it does not intend to draw down any further tranches of convertible bonds over 2022. The company is thus confident that it now has the assets to support the share price with concrete results. However, markets do not always react in a consistent manner and the group cannot be held responsible for variations that it cannot fully control.

The Spineway Group acquired in 2018 6.9% of INTEGRAL MEDICAL SOLUTIONS (IMS) for a share value of €4.4M in a logic of vertical integration on its main market Latin America. This investment is acquired but this project could not be completed from an operational point of view, due to the lack of a partner.  Following the failure of the discussions to exit this partnership with the Stratégos group, SPINEWAY group launched a legal procedure against the Stratégos group to recover its investment.

The arbitration court of Geneva rendered its award on January 20, 2022 in favor of Spineway. IMS was ordered to pay Spineway the full purchase price of the shares, i.e. €4,160,000 plus interest at the legal rate from October 23, 2019, and to reimburse €105,000 in respect of arbitration costs already borne directly by Spineway. IMS had 30 days to appeal against this decision, it being specified that this appeal, except in specific cases, would not have suspensive effect. IMS did not exercise this right of appeal and the group launched recovery procedures in the countries where the IMS group is established, which leads to very long delays and complicates the process.

We sincerely appreciate that you would like to visit our society. Yet, you can easily understand that due to the Covid situation we strictly limit access to our facilities. Indeed, we even limit the presence of our own employees and developped home-working as much as possible.

Moreover, we are a small company and we cannot mobilise someone each time a shareholder wants to visit the company.

We wanted to propose to physically attend to the annual shareholders’ meeting at our company. Yet, once again, due to Covid we will only organize this meeting on a web-conference basis.

I am very sorry not to be able to meet your request for the moment.

However, would you have any specific issue or question  you wanted to address during this visit, do not hesitate to send us an e-mail with your questions.

Many thanks in advance for your understanding.

The first half of 2020 was an important step in securing Spineway’s future. We had to secure our cash flow to pursue our organic growth projects and anticipate financing needs for regulatory requirements and future external development projects. The unprecedented pandemic that we are going through has also necessitated a need for financing to enable us to overcome this period and ensure the continuity of our activity. This is why the management of Spineway has chosen to raise Convertible Bond tranches despite the very unfavorable stock market context. Indeed, these CBs are today the main source of funding for Spineway.

How does convertible bond (CB) financing work?
CB contracts and mechanisms are complex. In summary, at the time of converting the CBs, the funder receives shares. The financier resells its shares (generally quickly) on the markets to be reimbursed for the cash brought to the company when the CBs are raised. However, when the stock market price is lower than the par value, the sale price of the shares resulting from the conversion of the CBs does not allow the financier to be reimbursed for the full amount advanced, this price being lower than their initial value. This is why the CB contracts include compensation clauses guaranteeing the financier to be able to sell enough shares for an amount corresponding at least to the cash contributed.

What impact does this funding have for Spineway?

• CB raising accompanied by compensatory CB: Following the fall in our prices, the raising of CBs were therefore accompanied by compensatory CBs in favor of Negma. These compensatory CBs led to the issuance of additional Spineway shares, granted to Negma. The financier is thus reimbursed for the amount provided in cash at the time of the sale of the shares (initial and compensatory), as would be the case when a loan is reimbursed. Compensatory actions constitute capital increases (pure and simple creation of new shares without contribution of cash to Spineway). In this case, accounting standards require all of these compensations to be recognized as a financial expense and therefore as a reduction in income. It is thus the accumulation of these “compensatory” actions that constitutes the bulk of the financial charges for the first half of 2020, which amount to € 10.6 million. The sale price of the shares received by Negma is not known to us. However, it should be noted that the final amount received by Negma at the time of the sale of the shares depends on the stock market price of each of the sale transactions, which was much lower than the nominal over this period. Consequently, the amount of the sale of these shares is lower than their theoretical value recognized in profit or loss through financial expense. This amount of financial charges therefore does not correspond to the amount received by Negma during the sale of the shares.
• Reduction of the nominal value of Spineway: Spineway has taken steps to stop this compensation mechanism by lowering the nominal so that it is lower than the stock market price, via nominal reduction operations (subject to legal deadlines) . The fall in stock market prices, in connection with the unprecedented pandemic, did not allow the mechanism to be halted from the 1st nominal reduction (May 2020). This is why a second nominal reduction was decided and ratified in September 2020. This first half of 2020 will remain exceptional from all points of view.

Spineway’s financial structure was thus strengthened since the Group had cash of € 3.3 million at the end of June despite the consequent drop in sales, enabling it to get through this complicated period and pursue its development projects.

See the full press release

If you wish to know more, do not hesitate to ask your questions via our contact form by selecting the subject #askourleaders

Following questions from certain shareholders, the Spineway group would like to point out that the consolidation of shares, voted at the CGM of May 26, is not currently planned. The Group wants this operation to be implemented under the best possible conditions and to support the Group’s growing strength. Spineway therefore reserves the right to carry out this transaction as soon as market conditions are more favorable and its current financing method is completed in order to preserve the positive effects of the merger.

The company Spineway, following the various discussions and questions from its shareholders on the nominal reduction subject to the next EGM on 09/16/20, wishes to provide the following details:

• A reduction in the par value of a share is a purely technical legal transaction:
  • No direct impact on the stock market price. This one will not be divided that much.
  • Without impact on the amount of equity of the company which will remain unchanged. The drop in share capital is in fact offset by an inverse variation in reserves.
• As proof, the company has already carried out a nominal reduction on May 26, 2020. This had no direct impact on the share price. This was € 0.0048 the day before the operation, € 0.0049 the next day, the level it still had at the end of the week.

This transaction also aims to protect shareholders from the application of a clause in the Negma financing contract which provides for the granting of free shares to the financier in the event of a lower share price than the par value, which would have the effect of accentuate the dilution of shareholders without any contribution of cash to the company.

The company thus wishes through this operation to perpetuate its cash flow while minimizing the impact for its shareholders.

For more information, please contact us by email: spineway@aelium.fr or by phone: 0811 045 555 – Tuesday to Thursday (10 am-12pm).

As part of the new financing contract with NEGMA GROUP, we have agreed to raise funds only as needed and only to support Spineway’s development strategy. We have thus launched a first phase of issuance of convertible bonds under this contract for € 5.3 million by the end of March 2020, which will be partly accompanied by cash flow for the company. In fact, we are currently in the process of studying capital mergers and / or strategic reinforcements which will require funds in the short and / or medium term. Discussions are currently underway with several entities.

The financing contract previously signed with ABO has almost come to an end. As of October 21, 2019, only one OCA (Notes) of 10,000 euros remains unconverted. ABO also has 81 million warrants (warrants) with the ratio 1 BSA = 1 share. Note, as was specified in our press release of April 16, 2019 , that in the event of the issuance of new shares by the Company whose issue price per share would be lower than the exercise price of the BSA, the exercise price of the BSA will be automatically adjusted to the issue price of the newly issued shares and will be immediately applicable.

To date, the latest share issue by Spineway has been announced on September 30 at a unit price of € 0.01268 per share, share premium included. ABO started to convert 333,333 BSAs, on the basis of € 0.012268 per share, on 10/10/2019. If other share issues are carried out by Spineway in the future, the exercise price of the BSA may adjust to a new value.

You can follow the information on this subject in the monitoring table of our “investors” page:

The dilutive impact of the tools still in circulation is detailed in our last press release of October 18 which includes the dilution table and below the associated comments:
http://www.spineway.com/finance/files/CP/2019 /fr_CP_SPW_OCABSA_VD.pdf

The new financing contract that we have signed with NEGMA GROUP LTD is in the form of an OCA. This contract is “by hand” from Spineway, bond issues will be made according to and at the pace of Spineway’s needs. In addition, the definition of the conversion price for these bonds will be done with a 4-digit truncation after the decimal point.

This new contract allows us to guarantee the financing of the company for the next 3 years and will be used to cover the operational needs of Spineway or acquisition projects interesting for the company.

You can find more information about this new funding in the press release dated October 18, 2019. The characteristics of said securities are available at the bottom of the Regulated Information tab of the Investors section:

As you probably know, our main distributor in the United States has been in default for a year now. Not only did it stop all orders, when it represented more than 35% of the group’s sales in 2017, it also left a significant arrears. Spineway had to find a financing solution in order to be able to continue its activity in the medium term.

After having considered and studied all the possibilities, Spineway then turned to the Alpha Blue Ocean fund through bond tools called OCEANE. These OCEANEs have enabled us to continue our activity and initiate our project of rapprochement with hospitals in Colombia and Africa.

However, this financing had a strong downward effect on the share price. Indeed, this fund profile is not intended to keep the securities over the long term. As he converts his bonds into stocks, he resells them on the market fairly quickly, resulting in downward pressure if there are not enough buyers in front.

We are aware that the shareholders of Spineway and first of all Mr. Leroux the CEO, who was the main shareholder, can only be disappointed by the current evolution of the stock market price but we are currently working to rectify the business and for this merger ambitious to generate value in the medium term, and become a model for other acquisitions.

Spineway declares all creation of shares on its website and summarizes every month the number of existing shares and voting rights in accordance with the law.

For internal reasons, Euronext has just regularized all the shares created for some time at once. It is not 84 million shares that hit the market all at once, but rather a regularization in terms of information from Euronext.

Integral Medical Solutions is the holding company at the head of a group of companies in the health sector, heavily invested in the management of hospitals in Latin America and Africa (cf. press release of March 20, 2019
https://spineway.com/wp-content/uploads/2020/05/en_CP_SPW_DD_AMLAT_GB_VD.pdf / FR
http://www.spineway.com/finance/files/CP/2019 /fr_CP_SPW_DD_AMLAT_VD.pdf).
IMS currently belongs to the holding company STRATEGOS GROUP LLC.
Spineway has not disclosed the amount of its acquisition.

Spineway wishes to strengthen its board of directors with experienced people in order to support it in the implementation of new synergies within a group which will quickly represent more than 80 million turnover.

These new directors will also aim to support us in the search for long-term investors.

Thus 2 new directors will be proposed during the General Assembly of July 24 which are the subject of the 5th and 6th resolutions.