On October 18, 2022 NANOBIOTIX (Euronext: NANO –– NASDAQ: NBTX – the ‘‘Company’’), a late-clinical stage biotechnology company pioneering physics-based approaches to expand treatment possibilities for patients with cancer, reported execution of a final agreement with the European Investment Bank ("EIB") to re-align approximately €30.7 million in outstanding debt obligations with the Company’s expected development and commercialization timelines (Press release, Nanobiotix, OCT 18, 2022, View Source [SID1234622135]). Nanobiotix previously announced agreement-in-principle with EIB for this restructuring on September 12th, 2022.

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The original finance contract and royalty agreement established between Nanobiotix and EIB in July 2018 included an initial tranche of €16.0 million drawn in October 2018 and repayable in a single installment at maturity in 2023; and a second tranche of €14.0 million granted in March 2019 and repayable in semi-annual installments of principal and interest after a two-year grace period. The agreement also included a commitment to an annual royalty payment in the low single-digits over a six-year period beginning January 2021.

Terms and Conditions of the Restructuring Agreement

The newly executed restructuring agreement enables Nanobiotix to defer repayment of the remaining €25.3 million in principal for both tranches up to June 2029.

Under the terms of the agreement, €5.4 million in interest accrued on the first tranche since 2018 will be restructured as payment-in-kind ("PIK") and will be deferred up to October 2024. Going forward, principal from the first tranche will accrue interest at the rate of 6% annually, with such interest being capitalized and due as PIK interest at maturity. Interest on the remaining €9.3 million in principal from the second tranche will continue to accrue at a 5% fixed rate paid in semi-annual installments through June 2029.

The annual royalty payment remains in the low single-digits and continues to cover a six-year period but has been re-aligned to begin as of the first year of NBTXR3 commercialization.

The restructuring agreement also includes a new milestone payment of €20 million due in June 2029.

While the restructuring of the finance and royalty agreement is intended to align debt obligations with the Company’s anticipated commercial timelines, the agreement contains provisions that would accelerate the maturity and repayment schedule, should Nanobiotix generate commercial revenue prior to June 2029. Specifically, principal and interest accrued on the first tranche following the amendment would be due in a single installment at the earlier of four years after commercialization or June 2029. Semi-annual principal repayments for the second tranche would resume with a maturity date at the earlier of three years following commercialization or June 2029. Finally, an accelerated redemption schedule for the new €20 million milestone payment would be triggered calling for the repayment in two equal installments due one year and two years after commercialization, respectively.

Further, should the company secure non-dilutive capital through the execution of any business development deal, the €5.4 million PIK interest payment associated with the first tranche would be due by October 2023 and an accelerated redemption schedule for the new €20 million milestone payment would be triggered. The accelerated redemption schedule would reflect a prorated payment amount not exceeding 10% of any upfront or milestone payment received by Nanobiotix with any remaining balance of the €20 million milestone payment due at maturity.

As part of the restructuring, Nanobiotix has agreed to maintain a minimum cash balance equal to the outstanding principal owed to EIB. All other covenants included in the 2018 finance contract remain unchanged.