SpineGuard

Q&A – Safeguard Proceedings

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Why did SpineGuard file for a chapter 11/ procédure de sauvegarde?

The engagement of this procedure is a good practice management decision intended to decrease the burden of our debt and to pursue our activities without disruption. The decision to file for a chapter 11 procedure was not a light one, but the management team deemed it the most appropriate in order to ensure the long-term success of the company. The management of SpineGuard made this decision as per board approval. This procedure should hopefully allow SpineGuard to renegotiate or otherwise modify the terms of repayment of its debt and thus to decrease the weight of its current debt. It will grant the company the possibility to focus more effectively on its activities, its customers and to conduct successfully its strategy centered on its DSG technology deployment through industry partnerships.

Is the “sauvegarde” procedure equivalent to “redressement judiciaire”?

No: the “sauvegarde” procedure is a section of the French “code du commerce” (bankrupcy code in the USA) that regulates the business proceedings where a company pursues its activities while obtaining the rescheduling of its debt. Unlike the « redressement » or « liquidation » (chapter 7 in the USA), the “sauvegarde” procedure is reserved for companies which are not in a situation of «cessation des paiements » (chapter 7 in the USA), but encounter an insurmountable punctual difficulty. Within the “sauvegarde” procedure, SpineGuard will be a normally operating company: the employees will continue to receive their salaries, their benefits will be maintained, the customers will be supplied with products, and we will maintain sound relationships with our suppliers. The objective of this procedure is that the company exits from it stronger than before.

Why is the stock trading on hold, it seems contrary to the “business as usual” situation? When will trading resume?

Trading hold is common practice in the case of the launch of a “sauvegarde” procedure, it is a sound conservatory management practice to protect the interests of the company and its shareholders. It allows us to explain the rationale of this “sauvegarde” procedure while preventing hectic stock price variations due to misconceptions and misunderstandings that would compromise enterprise valuation. The trading will resume as soon as the company deems the conditions favorable to a serene resuming at minimum (i) after detailed communication on the rationale and scope of a “sauvegarde” procedure (ii) allowed by the implementation of the first steps of the “sauvegarde” procedure and a reliable schedule. The trading resuming date is at the company’s discretion.

What are the next steps? What is the schedule?

After the launch of the «sauvegarde” procedure begins a period of observation that allows for the preparation of a continuity plan to be submitted to the Court. The Court then orders the plan to be executed as scheduled. The launch of the procedure does not exclude an agreement that allows to exit from it.

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