CARMAT

2019 Univer-

sal Registration Document

Including Annual

Financial Report

CARMAT

2019 Universal registration document

1

GENERAL REMARKS

In this universal registration document, the terms "CARMAT" or the "Company" shall mean the company, CARMAT.

This universal registration document contains information on the Company's objectives and its avenues for development. This information is sometimes identified by the use of the future or the conditional, and terms that refer to the future, such as "consider", "envisage", "think", "have as an objective", "expect", "intend", "must", "aspire", "estimate", "believe", "wish", "can" or, where appropriate, the negative form of these verbs, or any other variation or similar terminology.

The reader's attention is drawn to the fact that these objectives and avenues for development depend on circumstances or events which may or may not occur.

These objectives and avenues for development are not historical data and must not be interpreted as guarantees that the events and data set out will occur, that the hypotheses will be verified or that the objectives will be achieved.

By their very nature, the objectives and avenues for development in this universal registration document could be affected by known and unknown risks, or by uncertainties linked specifically to the very nature of clinical trials, the regulatory, economic, financial and competitive environment or by other factors which could lead to the Company's future results, performance and achievements being significantly different from the objectives that have been formulated or suggested here.

In particular, these factors may include the factors set out in Chapter 2, "Risk Factors", of this universal registration document. It is therefore possible that these objectives and avenues for development may not be achieved, and the statements or information in this registration document may turn out to be erroneous. As such, the Company will under no circumstances be required to provide updates, subject, that is, to the applicable regulations and in particular the General Regulations for the French Financial Markets Authority (AMF).

This universal registration document also contains information relating to the Company's activity, as well as the market and industry in which it operates. This information specifically comes from studies carried out by internal and external sources (analysts' reports, specialist studies, sector publications and any other information published by market research companies, public bodies and corporations and learned societies).

The Company considers that this information presents a faithful picture of the market and the industry in which it operates, and that it faithfully reflects its competitive position. However, although this information is considered to be reliable, it has not been verified by an independent expert, and the Company cannot guarantee that a third party using different methods to gather, analyze or calculate data on the markets would obtain the same results.

Investors are invited to consider carefully the risk factors described in Chapter 2, "Risk Factors", in this universal registration document. If some or all of the risks materialize, this could have a negative impact on the Company's activity, its position, its financial performance or its objectives.

In addition, other risks, not currently identified or considered as non-significant by the Company, could have the same negative effect.

Drawings, images, graphics and photographs used in this document are purely for illustration purposes, and shall in no case constitute a commitment of any kind on the part of CARMAT. The reproduction in any form of any part of this document is strictly prohibited.

To assist the reader's understanding, this universal registration document has a glossary attached. Words identified by an asterisk "*" when they first appear can be found in this glossary. A summary of references used in the document and their sources is provided at the end of the document.

The French version of this universal registration document (URD) was filed with the Financial Markets Authority (AMF) on Friday March 13, 2020, as the competent authority under Regulation (EU) 2017/1129, without prior approval in accordance with the article 9 of the said regulation.

The URD may be used for the purposes of a public offering of securities or the admission of securities to trading on a regulated market if it is supplemented by a securities note and, if applicable, a summary together with all amendments to the URD. The whole is approved by the Financial Markets Authority in accordance with Regulation (EU) 2017/1129.

content

Message from the chairman and from the CEO ....................................................................................................

 4

mission and vision ...........................................................................................................................................................

 6

carmat profile ..................................................................................................................................................................

 8

History of the company ................................................................................................................................................

 10

carmat and its shareholders ....................................................................................................................................

12

1

3

Description of

financial

activities

informations *

p. 15

p. 61

5

INFORMATION on the

company and its

capital

p. 119

1.1 Heart failure..........................

 p. 16

1.2 Markets and market

players .................................

p. 25

1.3 The first physiological heart

replacement therapy............

 p. 30

1.4 Go-to market

process.................................  p. 36

1.5 Strategy of the

Company ..............................

p. 40

3.1Notes on activity in the 2019

reporting period.....................

p. 62

3.2Financial statements as at

December 31, 2019................

p. 70

3.3Auditors' report on the annual

financial statements..............

p. 86

3.4Internal control and risk

management procedures relating

to the preparation and processing

of accounting and financial

information............................

p. 88

5.1Legal structure ....................

 p. 120

5.2Share capital *.....................

p. 120

5.3Major shareholders *...........

p. 135

5.4Memorandum and articles of

association .........................

 p. 138

5.5Particulars of the legal affairs

of the Company in the financial

period *................................

 p. 153

5.6Regulated agreements ........

p. 154

2

RISKS

FACTORS *

p. 49

2.1Methodological approach......

p. 50

2.2Summary of significant and

specific risks.........................

p. 51

2.3Detailed presentation of

significant and specific

risks.......................................

p. 52

4

corporate

governance

p. 91

4.1 Composition of the Company's

administrative and management

bodies *................................

 p. 92

4.2Conflicts of interest in the

governing, management and

supervisory bodies and the

executive board....................

 p. 97

4.3Specialized commitees..........

p. 98

4.4Statement on corporate

governance *......................

 p. 100

4.5Compensation and

benefits of directors and

management *.....................

 p. 104

4.6Staff and organization *.......

 p. 116

6

ADDITIONAL

information

p. 157

6.1 Author of the registration

document *..........................

 p. 158

6.2Statutory auditors *.............

 p. 158

6.3Information from third parties,

declarations by experts and

declarations of interest .......

 p. 159

6.4Publicly accessible

documents and 2017 - 2018

historical information..........

p. 159

6.5Information on holdings ......

 p. 160

6.6Recent events......................

p. 160

6.7Cross-reference tables.........

p. 161

6.8Glossary..............................

p. 164

Items forming part of the Annual Financial Report are clearly identified in the table of contents by the symbol *.

Items forming part of the Corporate Governance Report are available within the 4.1, 5.6, 5.2.6 and 4.4.3 paragraphs

CARMAT

2019 Universal registration document

3

Q&A with the

chairman

Jean-PIERRE GARNIER

How do you see the potential of CARMAT after more than a year as president of the company?

I am more than ever convinced that the CARMAT artificial heart is a breakthrough technological innovation without equivalent on the market and that the Company has the potential to become a leading player worldwide. Given the low number of grafts available for patients suffering from heart failure, the CARMAT bioprosthesis was developed to be a real alternative to transplantation and it is this vision that continues to drive all of our teams within the Company. We are delighted that everyone's efforts are gradually turning into successes as the pivotal study progresses.

To date, the longest duration of individual support exceeds 2 years, which is particularly encouraging. Crossing this symbolic 2 years milestone for a patient confirms the fundamentals of the prosthesis, namely its reliability and biocompatibility, and illustrates its potential to become a long-term solution for patients, in line with our objectives. We have achieved more than 7 years of cumulative support as part of our clinical studies, which is an exceptional achievement for such a complex medical device.

In addition, we have observed excellent results in patients eligible for transplantation, five of whom have successfully received a human graft following the improvement in their health thanks to the initial support provided by the CARMAT artificial heart. This shows that the procedure for explanting the prosthesis is well mastered and reproducible, thus opening up real potential for development in the bridge to transplant therapy (BTT).

What does this imply in terms of market access strategy?

The bridge to transplantation approach is a real opportunity to move quickly in validating the device in real life and thus quickly establish the credibility of our device on the European market, and then worldwide. The data we have in the pivotal study certainly demonstrate the value of our artificial heart in a bridge to transplant (BTT) configuration.

This BTT option actually expands our initial vision, to make our artificial heart a definitive solution (Destination Therapy

  • DT) for patients not eligible for transplant. I would add that probably the border between the BTT and DT no longer exists and we are already observing it in the pivotal study when
    a patient eligible for transplantation receives our artificial heart but then he is not lucky enough to benefit from a human graft afterwards.

Are the goals you set for the Company achievable?

When I took office a little over a year ago, our objectives were clear: to make the prosthesis available to as many people as possible, to make progress in the United States and to successfully transform CARMAT into an industrial and commercial company.

From this point of view, the CE marking which is expected this year, will be a major achievement for CARMAT, and above all the realization of hope for many European patients in a therapeutic impasse.

As for our desire to internationalize, the recent positive moves with the FDA bring us decisively closer to the American market and we consider it realistic to start implantations as part of the feasibility study in the United States, in the 4th quarter of this year.

Finally, I am very satisfied with the progress made by the Company in terms of transformation into an industrial and commercial company, in particular with the transfer and reliability of all of our production activities on the new Bois- d'Arcy site in 2019.

4

2019 Universal registration document

CARMAT

message from

the CEO

stéphane piat

What were the highlights for you in 2019?

2019 was a structuring year for CARMAT in several respects. First of all, we were able to resume production in May at the Bois-d'Arcy production site following final technical adjustments which make us particularly confident about the quality of the prosthesis, an essential criterion for its long- term reliability.

Following this, the pivotal study was able to resume gradually with the agreements of the competent authorities received in Denmark, the Czech Republic and Kazakhstan. At the end of the year, it was therefore the 12th patient in the study who benefited from our prosthesis, which has enabled us to achieve cumulative continuous support of more than

7 years to date. This record duration corroborates the intermediate results of the first part of the study and again shows that the prosthesis fulfills its role perfectly, with no serious complications observed in the implanted patients.

In parallel, our very positive discussions with the American health authority (the FDA, Food & Drug Administration) enabled us to obtain a conditional approval in September for a feasibility study in the United States. Since then, we have been able to answer all of the remaining questions from the FDA and obtain its full approval in early 2020, which will speed up discussions with the 7 selected renowned American hospitals, but also with the «Centers for Medicare

  • Medicaid Services "(CMS) to obtain compensation for the costs of the study.

From an organizational point of view, the appointment of Alexandre Eleonore within our managerial team as Industrial Director supports our market access strategy. His expertise will notably facilitate the ramp-up of the Bois-d'Arcy production site, in line with the further transformation of CARMAT into an industrial and commercial company.

Finally, we have considerably strengthened our financial structure thanks to a private placement with investors who share our long-term vision for a total amount of

€60 million in September 2019. This fundraising provides us

with financial visibility up to the third quarter of 2021 and the resources necessary to confidently consider the next steps in our project.

Will 2020 be the year of obtaining CE marking?

We are working to quickly finalize the pivotal study, and are indeed working in concert with our notified body DEKRA to obtain the CE marking by the end of the year.

But CE marking is not an end in itself since it is important that our prosthesis can benefit the largest number of patients. On this point, we are delighted that in France, the French National Authority for Health (HAS) has deemed our device eligible, with a few observations, for a clinical study as part of the 'Forfait Innovation' program. This program facilitates the testing of innovative devices in France, by covering the costs of the study. If our prosthesis demonstrates its benefits in the context of this clinical study, we can positively envisage its reimbursement in the long term, in our country.

The development in the United States, the leading market for medical devices in the world, is another important strategic pillar for CARMAT in 2020. The protocol for the American feasibility study has been extended to 10 patients eligible for transplantation, and we will thus be able to work with

7 of the most renowned centers in the United States. If our discussions on the cost of the study with the CMS are concluded quickly, American hospitals will be able to include the first patients in the study as early as the 4th quarter of this year.

Quality, finally, remains at the top of our concerns. In 2020, we will therefore continue to work on the continuous improvement of our production processes, which must respond perfectly to production imperatives on a commercial basis.

CARMAT

2019 Universal registration document

5

MISSION and vision

With its artificial heart, CARMAT is dedicated to providing doctors with innovative technologies to save lives and improve the quality of life of patients with terminal heart failure. Ultimately, the company aims to become the No. 1 alternative to heart transplantation. CARMAT relies on the commitment of its teams and the support of its shareholders

CARMAT aims to meet a major public health challenge related to cardiovascular diseases, heart failure, the leading cause of death in the world. More specifically, CARMAT aims to provide a lasting solution to the treatment of terminal heart failure,

a disease for which there are very few effective options today, mainly cardiac transplantation.

Heart failure is a progressive disease that affects 20 million patients in Europe and the United States. Within this population, tens of thousands of people are terminally ill. The number of human grafts available is only 4,000 to 5,000 per year. The artificial heart CARMAT is intended to offer a permanent solution to these patients who are facing a therapeutic impasse.

MARKET

A fast-growing,high-potential market with more than 200,000 patients suffering from terminal biventricular heart failure each year

Only 5,000

grafts

available per

year

CARMAT TEAM

A Board of Directors chaired by Jean-Pierre Garnier, including 9 directors, 5 independent and 2 internationally recognized cardiology experts.

A multidisciplinary and highly qualified team of more than 100 employees.

Stéphane Piat, as Chief Executive Officer, leads all of CARMAT's activities.

Board members as at December 31, 2019

(Alain Carpentier is Honorary President of the Board, Karl Hennessee is missing on the picture)

6

2019 Universal registration document

CARMAT

CARMAT PROSTHESIS

A prosthesis :

  • highly biocompatible,
  • self-regulatingwhich automatically adapts to the patient's needs,
  • pulsatile.

An innovative leader position with strong intellectual property and significant barriers to entry thanks to the scientific leadership of Pr. Carpentier and the technological excellence of the Airbus Group.

The first physiological cardiac bioprosthesis aimed at becoming a credible therapeutic alternative to heart transplantation.

  • a nominal surgical technique that is easily reproducible by any cardiac surgeon,
  • a return to home of the patient, after implantation, allowing a good quality of life.

2019 NEW FINANCING

ng i c n

a n

€60.0M

partners.

In September 2019, CARMAT raised € 60.0 million from

investors specialized in healthcare and from strategic

i

F

CARMAT

2019 Universal registration document

7

CARMAT PrOFILE

Founded in 2008, after more than 15 years of research, CARMAT develops a total artificial heart, orthotopic *, bioprosthetic *, self-regulating, pulsatile and implantable, as well as its external power supply system.

The name CARMAT originated from the meeting in the early 1990s between Professor Alain Carpentier and Jean-Luc Lagardère, then Chairman of Matra Defense (Airbus Group). This resulted in a very active cooperation starting in 1993 with the aim of designing a bioprosthetic artificial heart.

This unique partnership combines:

  • the experience of more than 30 years of Professor Alain Carpentier, father of modern valvular heart surgery. Professor Carpentier has developed treatments for biological tissues of animal origin, which have enabled him to design the most widely used biological valves in the world (Carpentier- Edwards® valves). He has also developed
    the technics of restorative surgery and mitral annuloplasty used today all over the world, on the principle that a device must always be associated with a reproducible procedure; and
  • Matra Defense's (Airbus Group) expertise on embedded systems and their constraints (reliability, severe environments, mass and volume) enabling engineers to work on the concept using simulations, modeling, testing.

The Company's goal is to address a global public health need that is the treatment of advanced heart failure. It is a severe, progressive, and often fatal disease that is constantly increasing in developed countries.

The CARMAT bioprosthetic artificial heart project thus aims to offer a long-term therapeutic solution to patients suffering from advanced biventricular heart failure, who are not eligible for transplantation or awaiting transplantation, who have exhausted all treatment possibilities and to whom no satisfactory solution is currently offered.

To date, the artificial heart CARMAT highlights 3 major technical achievements, leading to undeniable competitive advantages compared to other medical devices on the market:

  • The only artificial heart whose surfaces in contact with blood are made of biologically compatible materials to reduce thromboembolic risks;
  • The first intelligent artificial heart which adapts immediately and automatically to the metabolic needs of the patient;
  • Special attention paid to patients' quality of life, with the development of light external equipment and quiet operation.

Implantable Part

External Patient

System

8

2019 Universal registration document

CARMAT

CARMAT initially aims for CE marking to be able to market its prosthesis soon in Europe. To this end, CARMAT submits for analysis and review to a certification body, DEKRA, the elements of a dossier comprising a technical part and a clinical part. The clinical part of the dossier includes the clinical results obtained during the preclinical trials, the feasibility study of 4 patients finalized early 2016 and the ongoing pivotal study started in August 2016.

As a reminder, the pivotal study aims to validate the safety, efficiency and performance of the system and will contribute to the CE marking filing process. The objective of the Company is to implant around 20 patients and to demonstrate the survival of these patients over a 6-month horizon.

CARMAT also aims to obtain PMA (pre-market approval) over the next few years, which would

allow the Company to market its prosthesis in the United States. In this context, the Company obtained authorization in September 2019 from the FDA (Food & Drug Administration) to start a feasibility study in the United States on 10 patients. If successful, this study would be followed by a larger pivotal study to achieve PMA.

The clinical, industrial and commercial development of CARMAT will generate additional financial needs which the Company estimates to date that they could exceed € 100 million. Fundraising or other types of financing will therefore be required beyond, in particular, the fundraising of € 60 million carried out in September 2019, and the drawing of the two remaining tranches of € 10 million each of the loan conditionally granted by the EIB in December 2018.

SCOPE OF ACTIVITY

2020

2021

2022

EUROPEAN

Finalization of the pivotal study

Continued commercial deve-

MARKET

Marketing in Europe

Obtaining CE Marking

lopment in Europe

ACCESS

US MARKET

Start of transplantations in the

Start of the pivotal study in

United States as part of the

Finalization of the EFS study

ACCESS

the United States

feasibility study (EFS)

Continuous improvement of

production processes

INDUSTRIAL

Continuation of the actions of

securing critical supplies

Production ramp-up

MARKETING &

COMMERCIAL

Preparation for commercial launch

Commercial launch in Europe

Product final commercial

Continuous improvement

PRODUCT

configuration

of the product

SUPPORT

Adaptation of the

organization and strengthening of information systems

Implementation of sales

FUNCTIONS

administration and sales logistics

FINANCING

Continuation of the actions of

financing of the Company

Source CARMAT - Provisional project schedule

CARMAT

2019 Universal registration document

9

history of the

CARMAT receives €5 million in

company € 5 M research tax credits (CIR) for the year 2012, in line with the

Company's 2013 financing plan

First successful implantation performed

2014

on December 18, 2013 at the Georges

Pompidou European Hospital by

2008

Professor Christian Latrémouille

Creation of CARMAT

CARMAT obtains

33 M€

authorization from the

by Matra Défense

ANSM to conduct a

(Airbus Group),

Grant to CARMAT

feasibility study in France

Truffle Capital and

involving four patients

and its partners

Professor Alain

of €33 million in

Carpentier

2013

subsidies and

repayable advances

by Bpifrance under

the Strategic Indus-

trial Innovation

Further elements

scheme, the largest

added to the ANSM

amount ever granted

file, notably the

to a Young Innova-

CARMAT is a winner

results of the implants

tive Enterprise by

at the European

on animals and the

Bpifrance

Mediscience

intermediate results

Awards in the Best

on the durability tests

Technology category

2009

2012

Approval from

Completion of

Appointment of

the CPP (patient

modeling and

Marcello Conviti

protection

optimization work

as chief executive

committee*)

on the artificial

officer of CARMAT

heart (900 grams)

CARMAT presents

€ 29,3 M

in readiness for

preclinical

the assembly and

hemocompatibility

Capital increase

implantation phase

data to the 25th

in the amount of

for the preclinical

Annual Congress

€29.3 million (issue

trials

of the European

premium included)

Association for

2010

Cardio-Thoracic

Surgery

CARMAT granted the

2011

€ 16 M

status of "Innovation

Enterprise" by

Capital increase of €16 million,

Conclusion of

Bpifrance for Mutual

including issue premium, on the

an agreement

Funds for Investment

occasion of CARMAT's flotation

with Edwards

in Innovation (FCPI)

on Euronext's Alternext market

Lifesciences,

in Paris

the world leader

in the cardiac

valves sector

and hemodynamic

monitoring, for the use

of Carpentier-Edwards

biological cardiac valves

in the CARMAT bioprosthetic

artificial

heart

10

2019 Universal registration document

CARMAT

€ 5,3 M

€ 60 M

Full transfer of

CARMAT secures its future

In September 2019, CARMAT

production to the

funding, reaching the 5th

Bois d'Arcy plant.

raised €60 million through

milestone of its agreement

a private placement, with in

with Bpifrance and

Authorization

particular the participation

receiving €5.3

received from the

of certain historic

million

FDA to initiate a

Authorization

shareholders and the entry

feasibility study (EFS)

received to

of new shareholders (family

in the United States.

recommence

offices and entrepreneurs).

2015

on the CARMAT

feasibility trials

bioprosthetic heart

The patient receiving

an implant of

2019

the CARMAT

bioprosthetic heart

at Nantes Teaching

€ 11 M

Hospital on August 5,

CARMAT puts in

2014 went home and

€ 30 M

Finalization, with

benefited from the

place a new flexible equity

prosthesis for almost

In December 2018,

positive results, of

financing arrangement

nine months before

the first part (cohort

with Kepler Cheuvreux,

he died

CARMAT was granted a

1 of 10 patients) of

a mechanism enabling

conditional loan of

the pivotal study.

CARMAT to raise over

€30 million by the

Beginning of the

€11 million over the year

European Investment

implantations of

In November

Bank (EIB)

cohort 2.

A third implantation

CARMAT receives

The Bois d'Arcy

of the CARMAT heart is

authorization from

plant is certified and

carried out on April 8

ANSM and from the

commissioned.

by the cardiac surgery

CPP for completion of

department at the

the clinical feasibility

Georges Pompidou

study

2018

European Hospital

A fourth implantation of the

Resumption in May

€ 53 M

CARMAT heart is carried

out on December 22 by the

2017 of the trials

In December 2017,

team at La Pitié Salpêtrière

corresponding to

CARMAT received

on a patient suffering from

the pivotal study

more than €50

severe biventricular failure

(after approval of

million following

the ANSM in France)

the completion of a

2016

and enlargement in

fundraising exercise

Europe (Kazakhstan

open to the public, a

and Czech Republic)

transaction carried

of this pivotal study.

€ 50 M

out notably with

Discussion also

the support of two

The feasibility study relating

initiated in the United

historic shareholders

States with the FDA

At the end of April, CARMAT

to four patients being

(Pierre Bastid and

raise €50 million though

completed, the experience

Antonino Ligresti)

a private placement, with

gained allows CARMAT to

the support in particular

start work on preparation

of certain historical

of the pivotal study, after

2017

shareholders and also with

both ANSM and the CPP

the arrival of new investors

authorizations

At the end of August, the

Stéphane Piat

replaces Marcello

first implantation under the

Conviti as chief

pivotal study is carried out.

executive officer to

However, the patient concerned

define

and support

died at the end of November, the

CARMAT's commercial

analyses performed showing no

strategy to address the

involvement of the CARMAT prosthesis in

market

the patient's death

CARMAT

2019 Universal registration document

11

CARMAT and its shareholders

shareholders as at december 31, 2019

(to the knowledge of the Company)

TREASURY STOCK

MATRA DÉFENSE

FREE FLOAT

0.0 %

(Airbus Group)

39.6 %

13.2 %

CORELY BELGIUM

& BRATyA SPRL

8.3 %

AIR LIQUIDE

0.6 %

Pr Alain Carpentier

& HIS Association

5.3 %

THÉRABEL PHARMA

2.5 %

LOHAS

SANTÉ HOLDINGs SRL

11.5 %

7.3 %

BAD 21

Truffle Capital

5.2 %

Cornovum

2.8 %

3.6 %

Analysts' coverage

Broker / Analyst

Opinion

Target share price

Opinion's date

Gilbert Dupont

Accumulate

€24.00

February 12, 2020

Portzamparc

Buy

€22.90

February 12, 2020

Oddo-BHF

Buy

€27.00

March 10, 2020

Edison

- *

€68.01

September 27, 2019

*: Edison does not give any recommendation but only an evaluation of the company.

12

2019 Universal registration document

CARMAT

information on the CARMAT share

Number of shares

Mnemonic

Share price & mar-

Average

Market

outstanding

ket capitalization

liquidity

Status

(December 31,

&

(December 31,

(12 months

ISIN code

2019)

2019)

during 2019)

Euronext

ALCAR

€19.28 / share

12,609,649

8,186 shares / day

Growth

FR0010907956

€243.1 m

contacts

Chief executive

Chief financial officer

Chairman

and Head of investor

Head office

Website

officer

relations

Pascale d'Arbonneau

36, avenue de l'Europe

Jean-Pierre Garnier

Stéphane Piat

78 140 Vélizy-Villacoublay www.carmatsa.com

+ 33 1 39 45 64 50

France

contact@carmatsa.com

CARMAT

2019 Universal registration document

13

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14

2019 Universal registration document

CARMAT

1description1of activities

description of

activities

CARMAT

15

15

2019 Universal registration document

1

description of activities

1.1 heart failure

1.1.1 Pathology and causes *

Heart failure occurs when the myocardium (cardiac mus- cle) can no longer carry out its essential function as a blood "pump" and provide a sufficient cardiac output to satisfy the metabolic needs of the organism. When the failure reaches the left ventricle, one talks of left ventricular failure; when it reaches the right ventricle, one talks of right ventricular failure; when the failure reaches both ventricles, the left and the right, one talks of biventricu- lar heart failure.

Essentially, the heart is unable to keep up with its workload. The heart tries to make up for this by enlarging in an effort to pump more forcefully and by pumping faster in order to pump more volume in unit time. The body also tries to compensate in other ways by making the blood vessels narrower and by diverting blood away from less important organs to favor key organs like the brain and kidneys.

These temporary measures mask the problem, but the muscle failure continues, at varying rates, until these compensatory measures are no longer effective. The patient then begins to experience the classic symptoms of heart failure in an ever-increasing way (see table on next page: NYHA classification).

The above is a description of the more common chronic condition but heart failure can also occur as an acute event, most commonly as a result of a heart attack caused by ischemic heart disease (IHD - coronary artery disease). Other causes of heart failure are listed in the following table.

Major causes of heart failure:

Condition

Description

Ischemic Heart Disease

A buildup of fatty deposits on the walls of the coronary arteries which limits the

supply of blood to heart muscle.

High Blood Pressure

Increase the work that the heart needs to do which leads to increased muscle

mass and a need for more blood supply.

A group of heart muscle diseases leading to functional and structural damage.

Cardiomyopathy

Diverse causes including inherited, infections, some cancer treatments and

substance abuse.

Abnormal heart rhythms cause the heart to pump inefficiently. Types vary from

Rhythm Problems

relatively mild atrial (upper chamber) to disruptions of the ventricular (main

pumping chamber). Can be treated by medications and/or pacemaker and auto-

matic defibrillator devices. Often secondary to coronary disease.

Valves can become stenosed (narrowed) or regurgitant (leaky) due to; older

Damage to Heart Valves

age, infections, coronary disease, congenital defects, high blood pressure and

diabetes. Consequently, heart function is compromised to an extent depending

on the number and degree of valvular defects.

Structural defects that develop in the womb before a baby is born. These can

Congenital Heart Disease

vary from a small "hole in the heart" to major structural deformities. Most can

be partially or fully repaired but may cause problems in later life.

Tobacco, alcohol and recreational drugs all cause damage to heart muscle and

Substance Abuse

the vascular system. Some prescription drugs also have toxic side effects on

the heart which depend on dosage and length of use.

16

2019 Universal registration document

CARMAT

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description of activities

Heart failure can affect the heart in different ways:

  • The most common failure affects the left ventricle (the main pumping chamber) which can fail in two ways. It may lose its ability to contract forcefully enough (sys- tolic failure) or it may not relax enough, in order to fill properly (diastolic failure).
  • In right heart failure the weaker right ventricle is unable to pump enough blood through the lungs and since the left side relies on receiving blood from the right side, the entire pumping action of the heart is compromised. The right ventricle has much less resilience than the left and can therefore fail more easily. Right sided failure is most often secondary to left sided failure as blood volume backs up as a result of a compromised left func- tion. Right heart failure may also be secondary to lung disease or an acute event such as an allergic reaction, infection or to a blood clot which lodges in the lungs. Up to 30% of patients whose left heart failure is treated with a left ventricular assist device develop right heart
    failure 01, 02, 03, 04.

Practitioners distinguish the severity of failure or extent of the handicap using the NYHA (New York Heart Asso- ciation) classification which is based on symptoms and includes 4 classes.

There is also a number of other guidelines published by the various professional bodies such as that of the Euro- pean Society of Cardiology : Guidelines for the Diagnosis and Treatment of Acute and Chronic Heart Failure.

Heart Failure being a progressive disease, the prognosis is poor: less than 50% survival, 5 years after the diagnosis 05, and more than 40% of deaths within a year following initial hospitalization 06.

In the NYHA, a shift to class III is a decisive moment 07 :

  • for the patient: it marks the passage between a vir- tually normal life and a considerably reduced activity, very often involving a loss of autonomy;
  • clinically this means more aggressive therapies, a dependence on drugs, and, with class IV, the start of repeated hospitalizations;
  • for society, this represents an explosion of the costs, particularly due to hospitalizations: a class IV patient costs the community up to 15 times more than a class II patient 08.

Class III and class IV patients represent between 20 and 35% of the total, with class IV reaching up to 5% of heart failures.

NYHA

Class I

Class II

Class III

Class IV

Tiredness, palpitations,

Symptoms and dis-

Symptomatic even at

Symptoms

No symptoms

shortness of breath

comfort on the least

rest

after a sustained effort

effort

Inability for all activity,

Activity

No limitation

Modest limitation

Marked reduction

permanently confined

to bed

01 Dang NC et al. Right heart failure after left ventricular assist device implantation in patients with chronic congestive heart failure. J Heart Lung Transplant 2006 ; 25 : 1-6.

02 Boyle AJ et al. Predictors of poor RV function following LVAD implantation. J Heart Lung Transplant. 2003 ; 22 : S205.

03 Kormos RL et al. Right ventricular failure in patients with the HeartMate II continuous-flow left ventricular assist device: incidence, risk factors, and effect on outcomes. The Journal of thoracic and cardiovascular surgery. 2010 ; 139(5):1316-24.

04 Cordtz J et al. Right ventricular failure after implantation of a continuous- flow left ventricular assist device: early haemodynamic predictors. EuropeanJjournal of Cardio-Thoracic Surgery. 2014 ; 45(5):847-53.

05 Blackledge HM et al. Prognosis for patients newly admitted to hospital with heart failure : survival trends in 12 220 index admissions in Leicestershire 1993- 2001. Heart. 2003;89:615-620.

06 Stewart S et al. More 'malignant' than cancer ? Five-year survival following a first admission for heart failure. Eur J Heart ailF. 2001;3:315-322.

07 Launois R et al. Coût de la sévérité de la maladie ; le cas de l'insuffisance cardiaque. Journal d'économie médicale. 1990, T. 8, n° 7-8, p. 395-412.

08 Kulbertus HE et al. What has long medical treatment to offer and what does it cost. Eur Heart J 1987 (suppl F) 26-28.

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1.1.2 Epidemiology, prevalence

and incidence

The prevalence* of heart failure is rising sharply in developed countries.

The prevalence of heart failure can be estimated at 1-2% in the western world and the incidence* approaches 5-10 per 1 000 persons per year 09. Both prevalence and incidence vary by country 10 (Table 1 hereafter).

In Europe, the disease affects approximately 2% of the

  1. Mosterd A, Hoes AW. Clinical epidemiology of heart failure. Heart 2007;93:1137-1146.
  2. Global public health burden of heart failure. Card Fail Review 2017 Apr ; 3(1) :7-11. Doi : 10.15420/cfr.2016 :25 :2.

Table 1

Table 2

general population 11, 12 i.e. approximately 15 million Euro- peans 13, 14. The prevalence increases greatly with age 15. A French epidemiological study has shown that it can affect nearly 12% of patients over the age of 60 16.

  1. Cowie MR, et al. The epidemiology of heart failure. Eur Heart J 1997; 18:208-225.
  2. Davies MK et al. Prevalence of left ventricular systolic dysfunction and heart failure in the Echographic Heart of England Screening Study: a population based study. Lancet 2001; 358:439-444.
  3. Remme WJ et al. Public awareness of heart failure in Europe : fiirst results from SHAPE. Eur Heart J 2005 ; 26:2413-2421.
  4. McMurray JJ et al. ESC Guidelines for the diagnosis and treatment of acute and chronic heart failure 2012. Eur Heart J 2012 ; 33:1787-1847 (nombre incluant les 51 pays adhérents de la Société européenne de cardiologie).
  5. Conrad N, et al. Temporal trends and patterns in heart failure

incidence: a population-based study of 4 million individuals. The Lancet. 2018;391(10120):572-80.

16 Saudubray T et al. Prévalence et prise en charge de l'insuffisance cardiaque en France : enquête nationale auprès des médecins généralistes du réseau Sentinelles La revue de médecine interne 26 (2005) 845-850.

Savarese G Global Public Health Burden of Heart Failure. Cardiac Failure Review 2017;3(1):7-11. DOI: 10.15420/cfr.2016:25:2

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In the United States, over 5.8 million people were suffe-

The paradox is that the availability of these new medi-

ring from heart failure in 2012, with an annual incidence*

cations or new technologies has enabled more effective

of over 550,000 new patients annually. According to a new

treatment of acute coronary syndromes and considerably

study published by an American Heart Association wor-

increased patient survival after an infarction which is the

king group in May 2013, the prevalence of heart failure in

strongest predictor of left systolic dysfunction and the risk

the United States should increase by 46% between 2010

of heart failure: patients no longer die immediately but are

and 2030 17, bringing the affected population to over 8 mil-

treated long term, during which time the disease conti-

lion people.

nues to develop. Consequently, the total number of people

living with a compromised heart function and with clini-

A more recent publication in 2017 predicts the number of

cal heart failure will increase considerably in the coming

new cases of heart-failures to hit 772.000 in the Unites-

decades 21. This evolution also leads to a population of

States in 2040 (see Table 2 on previous page).

older heart failure patients, suffering from various comor-

bidities, and thus even less susceptible to have access to

In addition, end-stage chronic heart failure with alte-

transplants 22. Out of the 8.5 million American people suf-

red ejection fraction*, focused market for CARMAT,

fering from heart failure predicted by the AHA by 2030,

would affect 4.1 million people in Europe and the United

only 2.5 million of these will be under 65 years old.

States 18, 19 (people under 75).

Currently heart transplantation is only available to some

This progression of the epidemiology is linked to the aging

5,000 patients per year, and durable MCS devices

of the population, but also, in the case of advanced heart

(mechanical assistance) offer a treatment to a further

failure, to the improved survival after a myocardial infarc-

8,000 patients, with variable results. This means that

tion and to the progress made in the medicinal treatments,

we currently do not have an effective therapy for most of

such as betablockers* and diuretics* 20 or coronary stents.

the patients. More than 30% of patients supported by a

durable MCS system require bi-ventricular support, cur-

17 Heidenreich PA et al. Forecasting the impact of heart failure in the United

rently only available with a Syncardia® TAH (see paragraph

1.2.2).

States: a policy statement from the American Heart Association. Circ Heart Fail.

2013 ; 6:606-619.

18 The ECHOES study, Midlands, UK: Davies M, Hobbs F, Davis R, et al.

Prevalence of left-ventricular systolic dysfunction and heart failure in the

Echocardiographic Heart of England Screening study: a population based study.

et d'évaluation de santé) - Avril 2001 - E.

Lancet. 2001 Aug 11;358(9280):439-44.

21 Tendera M. Epidemiology, treatment, and guidelines for the treatment

19 CARLA study, Sachsen-Anthalt, Germany: Tiller D, Russ M, Greiser KH,

of heart failure in Europe. European Heart Journal Supplements (2005) 7

Nuding S, Ebelt H, et al. (2013) Prevalence of Symptomatic Heart Failure with

(Supplement J), J5-J9.

Reduced and with Normal Ejection Fraction in an Elderly General Population.

22 Croft JB et al. Heart failure survival among older adults in the United States

20 Évaluation de l'assistance ventriculaire en attente ou en alternative à la

: a poor prognosis for an emerging epidemic in the Medicare population. Arch

transplantation cardiaque. Rapport de l'ANAES (Agence nationale d'accréditation

Intern Med 1999 ; 159:505-510.

1.1.3 Economic challenge

Heart failure constitutes a real public health challenge which is set to increase: in Western countries, the cost of heart failure is now one of the largest of all chronic diseases.

According to study from the American Heart Association working group published in May 2013, the total cost of heart failure which was 31 billion dollars in the United States in 2012 is estimated to be 70 billion by 2030. The direct costs (medical costs) of patient treatment is expected to increase by 250% between 2012 and 2030. Taking account of all the direct costs from resulting co-morbidi- ties, the cost will explode to 160 billion dollars in 2030.

Moreover, this study points out that 80% of the medical expenses are attributable to the hospitalizations.

There are no recent studies dealing with the cost of heart failure on a European level. As an example, the direct cost of advanced chronic heart failure in France was in the region of 1.5 billion euros 23 (3.3 billion euros for the long term condition class which combines serious cardiovascular diseases - ALD 5 in 2009, only for the general National Health Insurance system) and was reported to affect over 730,000 people in 2011 (a 9% increase compared to the previous year).

In a statement released on May 7, 2010 on the occasion of the European Heart Failure Awareness Day, the French Society of Cardiology and the French Federation of Cardiology recalled some figures. In France there are more than 100,000 new cases a year. 10% of these patients were hospitalized, the average length of hospitalization exceeding ten days and the rate of re-admission within six

23 Régime général de l'Assurance maladie (French National Health Insurance system)- www.ameli.fr/l-assurance-maladie/statistiques-et-publications/donnees-statistiques/affection-de-longue-duree-ald/.

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months being 20%. In 2008, heart failure was the main diagnosis for 195,800 hospital stays in France for which the daily cost of a hospital stay in cardiology intensive care was over 2,000 euros.

Overall, heart failure represents 2.5% of the total expenditure on health care in Western countries, with costs linked to hospitalization alone representing more than 70% of

the total cost of the disease 24. Due to repeated hospitali- zations, class IV chronic heart failure represents between 61% and 92% of the total cost of heart failure 25.

  1. McMurray JJ, Stewart S. Epidemiology, aetiology, and prognosis of heart failure. Heart 2000; 83:596-602.
  2. Clegg AJ et al. Clinical and cost effectiveness of LVAD for end stage heart failure - Health Technology Assessment NHS - 2005.

1.1.4

available

are identified, ranging from Stage A (high risk of develo-

treatments

ping heart failure) to Stage D (Advanced heart failure) 26,

The onset of heart-failure may be prevented or delayed by

as shown in the below chart.

a certain number of measures, such as treating high blood

Various national regulatory and professional bodies also

pressure. However, once this disease reaches the chronic

produce guidelines and recommendations.

phase it is essentially incurable and treatment goals are

directed at improving clinical status, functional capacity,

quality of life, minimizing hospital admissions and redu-

The four stages of heart failure and associated treatment

cing mortality.

plans:

Heart Failure can be classified according to its severity

and associated treatment plans. In this scheme 4 stages

26 Cardiac Failure Review 2017;3(1):7-11. DOI: 10.15420/cfr.2016:25:2

Stage A

Stage B

Stage D

Stage C

Refractory

High risk

Structural

Structural

symptoms

with no

heart

disease,

requiring

symptoms

disease, no

Previous or

special

symptoms

current

intervention

symptoms

Hospice

VAD, transplantation

Inotropes

Aldosterone antagonist, nesiritide

Consider multidisciplinary team

Revascularization, mitral-valve surgery

Cardiac resynchronization if bundle-branch block present

Dietary sodium restriction, diuretics and digoxin

ACE inhibitors and beta-blockers in all patients

ACE inhibitors or ARBs in all patients; beta-blockers in selected patients

Treat hypertension, diabetes, dyslipidemia : ACE inhibitors or ARBs in some patients

Risk-factor reduction, patient and family education

From Yancy, C. W., et. al. "2013 ACCF/AHA Guideline for the Management of Heart Failure:

A Report of the American College of Cardiology

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From Stage B onwards, treatment involves a tailored combination of medications and this is known as Optimal Medical Therapy (OMT). Unfortunately, because of the many drug related side effects, one of the constraints of OMT is compliance, with an estimated 40% of patients not adhering to their treatment plans.

Stage C patients may be suitable for surgical interventions ranging from coronary stenting, coronary artery bypass surgery, valve repair/replacements to surgical re-modelling of the heart. Patients with rhythm problems can be treated with a variety of pacemaker type devices including those incorporating a defibrillator function.

Patients in Stage D typically require strong heart stimulating intravenous drugs (inotropes) and become candidates for mechanical assistance (MCS) or heart replacement therapy by transplantation or an artificial heart.

Patients in Stages C & D also commonly develop a number of comorbidities (other medical conditions) as a result of a chronic inadequate blood supply.

medications

At early stages (typically at classes I and II of the NYHA classification), treatment is essentially drug-based27 and, depending on the severity and symptoms, combines:

  • anticoagulants* and anti-platelet aggregation medica- tion* to prevent the formation of blood clots;
  • angiotensin-convertingenzyme inhibitors* to reduce vascular resistance;
  • betablockers which reduce the cardiac rhythm and out- put to decrease blood pressure;
  • diuretics to remove excess fluids and, in this way, lighten the burden on the heart to prevent pulmonary edema;
  • vasodilators* which relax the blood vessels to increase the flow of blood and oxygen to the heart without increasing its workload;
  • etc.

The complexity of treatment and the need for frequent adjustments leads to low patient compliance: 40% of patients do not take their treatment correctly after 3 months 28.

Positive inotropes* are generally also introduced at the most advanced stage of the disease. These are drugs, administered intravenously in the hospital setting, which increase the contractility of the cardiac muscle and that allow, at least temporarily, critical situations of low

  1. American Heart Association - Heart Failure Medications - http://www. heart. org/HEARTORG/Conditions/HeartFailure/PreventionTreatmentof HeartFailure/ Heart-Failure-Medications_UCM_306342_Article.jsp.
  2. Benner JS et al. Long-term persistence in use of statin therapy in elderly patients. JAMA. 2002 ; 288:455-61.

cardiac output in episodes of acute decompensated heart failure* or cardiogenic shock* to be resolved. Dependence on inotropes marks the terminal phase of heart failure with a mean survival of 3 and a half months 29.

Devices

From class III (NYHA classification), surgical options and the implantation of supporting medical devices are consi- dered, such as:

  • mono or biventricular pacemakers to prevent arrhythmias;
  • implantable defibrillators to treat ventricular tachycar- dia and prevent sudden death;
  • left ventricular reconstruction;
  • restrictive mitral annuloplasty*;
  • mechanical circulatory support systems (MCS), implan- table or not, and artificial hearts.

For the most part, these options pursue the objective of recovering the heart's natural function. For example, biventricular pacemakers aim to reeducate the ventricles by synchronizing their contractions.

Restrictive mitral annuloplasty aims to reeducate the left ventricle by affecting its geometry. However, if these approaches temporarily relieve some patients, they face important difficulties in selecting patients30 or technical implementation 31, which restrict their adoption and do not prevent the progression of the disease.

Finally, the use of stem cells to regenerate damaged heart muscle is a promising avenue of research, but remains relatively controversial 32, in particular due to difficulties in collection or generation, then in administration (a large number of cells "die" during the injection) and the lack to date of a clinical demonstration of long-term regeneration of the myocardium.

Mechanical Circulatory Support (MCS):

The mechanical circulatory support systems are the devices which could be considered as the closest, in function and indication, to the CARMAT artificial heart project. Their characteristics and evolution are detailed in Paragraph 1.2.2. « Technologies and market players ». However, in contrast to artificial hearts which replace both ventricles, the diseased heart is left in place and can continue to deteriorate.

  1. Hershberger RE et al. Care processes and clinical outcomes of continuous outpatient support with inotropes (COSI) in patients with refractory endstage heart failure. J Card Fail. 2003 ; 9(3):180-7.
  2. Marwick TH. Restrictive Annuloplasty for Ischemic Mitral RegurgitationToo Little or Too Much. J Am Coll Cardiol. 2008 ; 51(17):1702-1703.
  3. Strickberger SA et al. Patient Selection for Cardiac Resynchronization Therapy, Circulation. 2005 ; 111:2146-2150.
  4. Garbern J et al. Cell Stem Cell, Volume 12, Issue 6, 689-698, 6 June 2013.

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Patients with chronic or acute heart-failure who cannot be stabilized with OMT are candidates for MCS. The devices are used to unload the failing heart and maintain an adequate blood supply to key organs. Patients in acute cardiogenic* shock are typically initially treated with a short-term support device to enable a full evaluation to take place whilst a definitive therapy can be planned and implemented. These decisions are guided by a categorization established by the Interagency Registry for Mechanically Assisted Circulatory Support (INTERMACS). There are 7 categories of which the first 4 are amenable to MCS therapies :

Top Four INTERMACS Categories

Although LVAD is the most frequently recommended MCS intervention, up to 30% of these patients will have failure of both ventricles (Bi-Ventricular Failure), thus giving rise to inferior outcomes. There is currently no Bi-Ventricular (BiVAD) MCS device on the market and since the only current Syncardia® TAH device has relatively poor outcomes, surgeons tend to test solutions such as implementing two LVAD.

INTERMACS Level

NYHA Class

Description

Device

1.Cardiogenic

IV

Unstable despite of maximum drug support and/or

ECLS * LVAD **

Shock

short-term MCS

TAH ***

2. Progressive

Acceptable blood pressure but rapid deterioration

ECLS * LVAD **

decline despite Inotropic

IV

of kidney function and nutritional state

TAH ***

support

3. Stable but Inotrope

IV

Blood pressure stable but requiring

LVAD **

dependent

intermittent inotropes

4. Symptomatic at rest

IV

Temporary cessation of inotropes but frequent

LVAD **

treatment required for fluid overload

  • : ECLS - Extracorporeal Life Support (short-term system connected to patient by tubes)
  • : LVAD - Left Ventricular Assist Device
  • : TAH - Total Artificial Heart

The Criteria Committee of the New York Heart Association. Nomenclature and

Criteria for Diagnosis of Diseases of the Heart and Great Vessels. 9th ed. Boston, Mass: Little, Brown & Co; 1994:253-256.

MCS Strategies

MCS devices can be used for a number of different strategies:

Acronym

Description

Application

CPR

« Cardio-Pulmonary Resuscitation »

Short term devices used to

resuscitate and buy time

BTD

« Bridge to Decision »

Short or Medium-term devices used to evaluate

best therapeutic way forward

BTR

« Bridge to Recovery »

Medium term devices used to attempt functional

heart muscle recovery

BTT

« Bridge to Transplant »

Medium to long term devices used to support a

patient awaiting a transplant

DT

« Destination Therapy »

Long term device used for permanent heart repla-

cement therapy

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TRANSPLANTATION

Patients who have reached NYHA IV can currently only be definitively treated by a heart replacement therapy (transplantation or artificial heart).

Although some LVADs and the only currently available TAH (Syncardia), are approved (or awaiting approval) for this chronic Destination Therapy (DT), they have yet to achieve the results available from heart transplantation

Professor Christian Bernard performed the first heart transplant in South Africa on December 3, 1967. The first transplant patients, with few exceptions, did not survive more than a few weeks after the operation, notably due to rejection (reaction of the host against the transplant which it considered as a foreign biological body). Several important advances have allowed the improvement of patient survival:

  • the preservation of donor hearts thanks to refrigeration,

allowing the removal at a distance from the place of transplantation;

  • endomyocardial biopsy allowing the early diagno- sis of rejection: a probe is introduced, under X-ray control and under local anesthesia, into a large vein and pushed until it is in the right ventricle, permitting a small piece to be sampled which is then analyzed under a microscope;
  • finally, and above all, the arrival of ciclosporin, an immunosuppressant* the therapeutic use of which offe- red great hopes in organ transplantation from the early 1980s by preventing acute rejection.

Today some 4,500 transplants are carried out globally, with survival rates of 85% at 1 year and 69% at 5 years , in nearly 300 centers (see tables below). However, the attrition rates do not improve significantly.

Survival rate after transplantation: ISHLT Registry 2018

Number of transplant centers worldwide: ISHLT Registry 2018

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The hopes placed on this treatment continue to face major problems that limit its mainstreaming.

The first reason can be found in the very strict eligibility criteria both for the harvesting of the organ and for the transplant. Notably, the donor 33 must, in principle, be under the age of 61 years, brain dead, not a carrier of certain viruses such as HIV or hepatitis B and C, not be a drug addict or have a cancer and, of course, not be suffering from heart disease. This therefore limits the possibility of donation mainly to trauma deaths (in particular road acci- dents, which are constantly decreasing). Only 435 hearts were therefore harvested in France in 2012 and 397 were implanted 34.

In France, 41% of donors were over 60 years old in 2011 compared to 22% in 2007, which explains why not all of the transplants harvested can be used.

Considering this shortage of organs, the eligibility criteria of the recipient are even stricter 35 in order to ensure the greatest chance of success with each transplant. Blood groups must be identical, weight and size equivalent. Irreversible pulmonary hypertension, an active infection or a cancer are formal contraindications. Other relative contraindications are also taken into account such as dia- betes, advanced lung or liver disease, renal impairment and morbid obesity etc.

  1. Latrémouille C et al. Transplantation cardiaque. EMC - ©Elsevier, Techniques chirurgicales - Thorax, 42-748, 2006.
  2. Agence de la biomédecine - Synthèse nationale de prélèvement et de greffe
    2012 et annexe au bilan 2012.
  3. Mehra MR et al. Listing Criteria for Heart Transplantation : International Society for Heart and Lung Transplantation Guidelines for the Care of Cardiac Transplant Candidates. J Heart Lung Transplant 2006 ; 25:1024-42.

A psychological assessment is considered to ensure that the patient understands and undertakes to adhere to complex life-long medical treatment. Patients with psychiatric disorders, or addicted to alcohol or drugs are not considered.

Age of the patient, which must be usually below 65 years, even if there is no legislation in this area, is a particularly discriminating criterion. The organs are therefore reserved for the youngest patients, while the vast majority of chronic heart failure patients are over 60 years or suffering from comorbidities making them ineligible.

Furthermore, post-transplant survival decreases significantly with age. Only 80% of patients over 60 years are still alive after one month, and 67% after one year 36.

As a result the number of transplants has been stable or declining in all developed countries for over ten years, while the prevalence of heart failure has considerably increased.

Heart transplant waiting lists therefore do not reflect treatment needs, but simply the number of patients satisfying all the eligibility criteria, particularly age. The low diffusion of heart transplantation as treatment of choice for end-stage heart failure is shown in the following table where we can see the small number of patients who could expect to benefit (see following table).

36 Agence de la biomédecine - Rapport d'information au Parlement et au Gouvernement - septembre 2013 et bilan 2013 : http://www.agence- biomedecine.fr/annexes/bilan2013/donnees/organes/03-coeur/synthese.htm.

France

United States

Germany ****

UK ******

Transplantations

450 *

3,244 **

312

177

Patients on waiting list

364 *****

3,782 ***

703

246

  • : 2018 - Agence de la biomédecine (Biomedicine Agency)
  • : 2017 - UNOS
  • : As at January 17, 2019
  • : 2018 - EuroTransplant
  • : 2013 - Agence de la biomédecine (Biomedicine Agency) - annual report 2014 http://www.agence-biomedecine.fr/annexes/bilan2013/donnees/organes/03-coeur/synthese.htm.
    ****** : 2017 - NHS Organ Donation Annual Report

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There is also a number of serious complications, associated with the transplantations.

Post transplant complication rate : Alba A Int J Tx Res and Med 2016.

CKD = chronic kidney disease ; CAV = coronary artery disease.

As patients require lifelong immunosuppression, they are susceptible to a range of side effects including an increased incidence of infection and malignancy, chronic rejection, development of graft coronary artery disease, hypertension and kidney disease.

Despite all of these issues, heart transplantation is

regarded as the « Gold Standard » for heart replacement therapy, so any potentially successful alternative needs to match or surpass its results. The International Society of Heart & Lung Transplantation (ISHLT) maintains a register and carries out extensive analysis of results, in order to guide recipient and donor selection, aimed at achieving the best outcomes with a limited resource.

However transplant rates are limited by the paucity of donors and it is unlikely that a figure exceeding 6,000 per annum will be achieved. The impact of changes to donation legislation, better donor management, innovative retrieval and storage techniques are offset by higher survival rates from road accidents and cerebral trauma.

Finally, a heart transplant is a heavy treatment at a very high price. The Milliman Institute has published a detailed report on the estimated cost of organ transplants in the United States. In terms of heart transplantation, its 2014 conclusions show a cost of 1,242,200 dollars, including

30 pre transplantation days and 180 post-transplanta- tion days. It is difficult to make international comparisons in view of the very different health funding systems and figures available covering different pre- and post-implan- tation periods.

1.2 markets and market players

1.2.1 addressable market figures

CARMAT intends to market an artificial bioprosthetic valve for patients in NYHA classification end stage class IV heart failure which is either chronic or ischemic heart disease (of which «acute myocardial infarction» is only a sub-group), in a the Bridge To Transplant indication, i.e. pending transplantation (refer to paragraph 1.2.2 « Technologies and market players ») and/or for the Destination Therapy (final treatment).

geographical area.

Referring to the indications obtained by similar devices, this artificial bioprosthetic heart could be indicated for patients suffering from acute or chronic end stage heart failure under 70 years old who cannot be transplanted, without obvious indication like cancer, reducing their life expectancy to less than 6 months.

Considering that:

The figures below refer to the indication for destination therapy.

Chronic heart failure affects approximately 15 million Euro- pean patients 37 and 5 million patients in the United States 38, i.e. a total of approximately 20.8 million patients in this

  1. ESC Guidelines for the diagnosis and treatment of acute and chronic heart failure 2008. European Heart Journal (2008) 29, 2388-2442 (sur les 900 millions d'habitants des 51 pays adhérents de la Société européenne de cardiologie).
  2. Heart Disease and Stroke Statistics - 2010 Update at a glance - American Heart Association and American Stroke Association.
  • 2.3% of these patients will reach the end stage of the disease annually - involving the first hospitalisation - i.e. a population of approximately 478,400 patients 39 ;
  • 38% of this population is under 70 years old, i.e. a popu- lation involving approximately 182,000 patients 40, 41 ;

39 Jhund PS et al. Long-term trends in fiirst hospitalization for heart failure and subsequent survival between 1986 and 2003 : a population study of 5.1 millions

people. Circulation 2009 ; 119:515-523.

  1. ESC Guidelines for the diagnosis and treatment of acute and chronic heart failure 2008. European Heart Journal (2008) 29, 2388-2442 (sur les 900 millions d'habitants des 51 pays adhérents de la Société européenne de cardiologie).
  2. Heart Disease and Stroke Statistics - 2010 Update at a glance - American

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  • around 5,000 eligible patients are transplanted per year; and
  • the anatomical compatibility of the CARMAT heart for men and women is 86% and 14% (with a weighting of 80/20 between men and women), it should be noted

Heart Association and American Stroke Association.

that the available clinical data indicate that these compatibility rates will increase in the near future.

There are therefore approximately 126,700 potential patients in Europe and the United States for the indication class IV end stage chronic heart failure.

1.2.2 Technologies and market players

The development of an artificial heart has long been the

  • holy grail » of medicine and early attempts go back to the late 1930's in Russia and then a series of developments in the USA, in the 1960's. The first BTT (Bridge to Transplant) was carried out by Cooley, in Texas in 1969 when an early device (Liotta Heart) was successfully used for 64 hours of support. One of the major innovators was Willem Kolff who assembled several teams to work on artificial heart development. One of the Kolff's designs was developed by Robert Jarvik and constituted the first successful clini- cal implant in 1982. The patient lived for 112 days and then followed a series of 4 further « permanent » implants of the Jarvik 7 TAH, but the program was abandoned when it became clear that the therapy was accompanied by too many complications and the equipment precluded a decent quality of life.

Attention then turned to a simpler univentricular approach when it became clearer that a significant number of ESHF patients could be adequately supported by just unloading the left ventricle, using a LVAD (left ventricule assistance device). These early partial success-stories and the large unmet need, stimulated a number of commercial efforts to develop LVADs and there was a steady improvement in engineering these devices, and patient selection and management.

While modern engineering has allowed much progress in pump design and fabrication. The weakness of these technologies remained the problem of the biological interface between the device and the patient, resulting in significant complications, particularly with regard to coagulation control and infection. The CARMAT PHRT design is aimed at overcoming these complications.

Although there have been many small companies involved in the development of these devices, today the principal market players are Thoratec® and Heartware® in the field of ventricular assistance, and Syncardia in the field of artificial hearts.

The key market players are Thoratec® and Heartware® in the field of ventricular assistance, and Syncardia in the field of artificial hearts.

These devices are indicated in two main cases:

  • pending transplantation (BTT: Bridge to Transplant)

The device is implanted temporarily until an organ is available or until the patient's condition improves sufficiently to tolerate the operation. Given the thromboem- bolic or infectious complications of the available devices, they were, until recently, used mostly for this short-term indication.

  • definitive treatment (DT: Destination Therapy)

This indication was, until recently, reserved for patients who were ineligible for a transplant, or who did not wish to have a transplant. However, under the pressure of a fast increasing prevalence and the shortage of organs, numerous patients temporarily implanted actually become destination therapy patients.

The aim of Destination Therapy is to offer a system providing a real quality of life to the patient. This should comprise a reasonable autonomy, a return to a home envi- ronment, a near normal social life and even a return to work. Complications and the burden of system management should be minimal. In terms of symptoms, this would represent an improvement of at least 2 NYHA classes.

Thoratec® obtained the first approval for the use of their HeartMate II in a Destination Therapy application in 2010. The use of these devices as a permanent solution has increased considerably in the USA and in other European countries, such as Germany, so that by 2015 more than 50% of LVAD implants were for a Destination Therapy strategy.

(N.B.: The following information concerning the other devices has been taken exclusively from public sources such as websites of the companies cited, publicly accessible presentations for investors or referenced scientific publications. Readers are encouraged to conduct their own research in order to form their own opinions. CAR- MAT accepts no liability concerning the accuracy of this information.)

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ventricular assistance devices 42

These devices are often and incorrectly referred to by the media as artificial hearts.

However, as their name indicates, they are implanted in parallel to the native heart, to assist it by supplementing its flow to meet the metabolic needs, but do not replace it.

Categories of Ventricle Assistance Devices (VAD)

These devices can be categorized depending to their connection to the patient's vascular system (extra-corpo- real, para-corporeal, or intra-corporeal) :

  • The extra and para-corporeal devices are used for short to medium term applications such as Rescue Therapy 5RT), Bridge to Decision (BTD) and possibly, post-sur- gical bridge to recovery ;
  • Modern VADs, used for BTT or DT applications are intra-corporeal and referred to as "durable" and implanted inside the body.

Extracorporeal :

  • Pump connected by long tubes
  • Short-termsupport

Paracorporeal

  • Pump position outside body
  • Medium-termsupport

Intra-corporeal

  • Long-term /chronic support
  • Intraventricular / Intra-pericardial / Abdominal Pocket

The historical leader in VAD category is the Thoratec® company with their HeartMate II® device, then their Heart- Mate III® device. The HeartWare® LVAD, now owned by Medtronic, is the main competitor.

42 The devices indicated awaiting recovery (Bridge to Recovery: BTR) are not mentioned here. Indeed, their indications and their technologies are very different. They can only provide limited assistance (approximately 2 liters / minute vs. 9 liters / minute for the CARMAT heart) for a very limited period (from a few hours to a few days) and are intended for patients without permanent ventricular deterioration, who need temporary hemodynamic support, for example after surgery or post-traumatic hemorrhage.

Thoratec® announced that it exceeded 18,000 implants for its HeartMate II® in 2014 (i.e. scarcely 5 years after its approval by the FDA for the destination treatment indica- tion) and it was on this basis particularly that in the middle of 2015 this Company was acquired by Saint Jude Medical, based on a value of 3.3 billion dollars. In October 2015, the Company announced that it had obtained the CE mark for its product HeartMate III®.

More recently, in April 2016, the Abbott Group and Saint Jude Medical announced their merger, thus valuing Saint Jude Medical at approximately $ 25.0 billion. The new group created as a result of this merger is positioned as a global leader in medical devices, with applications in the cardiac field, diabetes treatment, or vision disorders.

The products of Thoratec®, entity now belonging to the Abbott Group, can theoretically assist the left (Left Ventricular Assist Device - LVAD) or right (Right Ventricular Assist Device - RVAD) ventricle or both ventricles. In the latter case, they are called biventricular assist devices (BiVAD). To date, however, there are no implantable devices approved for the right ventricle or biventri- cular application, all the devices having been designed for the left ventricle.

Right ventricular failure is a major complication of LVAD treatment of the left ventricule. Reported incidence varies from 3.9% to 53% using diverse definitions. Howe- ver, BiVAD support outcomes are significantly worse than LVAD alone, (50% vs 80% survival). To our knowledge, only Medtronic, has expressed an intention to seek authorization for a right ventricular assist device (RVAD). The design of an RVAD or BiVAD is different from that of a LVAD. This is because the right ventricle operates in very different conditions than the left one. The operating pressures are much lower, the native muscle has much less resilience and unloading the left ventricle produces a change in the internal geometry of the heart. In addition, any BiVAD set-up requires the right and left flows to be carefully matched, to avoid damage to the lungs.

LVAD designs have evolved over time, from 1st generation designs with large pneumatic or electromagnetic pumping chambers incorporating mechanical valves used in open heart surgery, to 2nd and 3rd generation devices, smaller and larger sophisticated, described in the following paragraphs. They were connected to the heart via wide conduits and to an imposing control and power system, via a percutaneous cable. Improvements to external systems then allowed patients to be discharged from hospital while awaiting a transplant. However, these systems were relatively large, noisy, and associated with high levels of complications, including neurological events, infections, and device failures.

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The second-generation pumps were developed in the 1990's using rotary pump designs, after animal studies showed that the non-pulsatile flow and pressure profiles produced by this type of pumping action, is compatible with chronic survival. This allowed the pump size to be significantly reduced and avoided the inclusion of valves. The most frequently used device of this design was the HeartMate II. Results were significantly better than with first-generation devices and the small size made for an improved patient quality of life. However, chronic loss of a pulse proved to produce complications relating to coagulation and abnormal blood vessel development and there were still issues with infection.

Third-generation designs comprise even smaller devices, such as HeartMate 3 and HeartWare, that can be more easily implanted right next to the heart, require less power, and can be controlled to produce a pseudo-pulse. Early results suggest that these designs have resulted in overall better outcomes with fewer complication rates. However, a recent INTERMACS annual report had the following conclusion: « adverse events continue to affect the fiield, contributing to death and an unacceptable high incidence of hospital readmissions ».

total artificial heart: TAH

As in a heart transplant procedure, total artificial hearts replace both failing ventricles. Placement is called

  • Orthotopic » to distinguish grafts or implants which are placed elsewhere than at the position of the native heart in the thorax. The native ventricles are removed and TAH is connected to the remaining atria of the human heart, the blood of which fills the device, and to the main blood ves- sels carrying blood to the lungs (pulmonary artery) and the rest of the body (aorta) by two conduits.

Syncardia

The only total artificial heart currently on the market in Europe and the United States belongs to the eponymous private equity company Syncardia 43. After facing financial difficulties («Chapter 11»), the company received in Sep- tember 2016 the support of the private equity fund Versa Capital Management.

The Syncardia® device was designed in the 1970s and implanted for the first time in 1982 - under the name Jar- vik 7. The patient survived for 112 days. In 1985, a patient reached the transplantation stage for the first time after surviving for 9 days with the artificial heart. In 1990, the FDA closed the Symbion, Inc. company which held the rights for Jarvik 7 and stopped the ongoing clinical study (IDE*) because of breach of its regulations. The technology was taken up again by an Arizona University Centre under the name CardioWest™. A new clinical study started again in 1992 in the United States and lasted 10 years. This led to FDA approval in 2004 for a bridge to transplantation indication and the CE marking. Meanwhile, a new privately funded company, Syncardia Systems, Inc., was created in 2001 to prepare for and then proceed to marketing 44. Syn- cardia announced the 1000th implantation of its artificial heart in February 2012, which is 19 years after the first implant in December, 1982. Today, to our knowledge, the annual number of Syncardia implants is about 50.

This means that the only TAH on the market has a design which is 40 years old. The two polyurethane ventricles are actuated by pneumatic pressure, provided by a large hospital driver incorporating a compressor and independent right and left controllers. The air pressure actuates the internal flexible membranes which separate each ventricle into blood and air compartments. Forward flow is achieved with the use of four mechanical heart valves : two on the inlets and two on the outlets. The system requires manual control, but some degree of automatic response is provided by running the system so that it only partly fills, at rest. Two percutaneous (exiting the abdominal wall) plastic tubes, approximately 2 meters long connect the device to the hospital driver. There is now a portable ver- sion, the Freedom™ portable driver, which weighs 6.12 kg (13.5 pounds) excluding carrying accessories such as the backpack or sling bag This allows the patient some independence and the batteries provide for 3 hours of independent operation 45.

  1. www.syncardia.com - all information concerning Syncardia is taken from their website, unless specifically stated.
  2. Historical information on Jarvik 7 can be found on the Jarvik Heart website www.jarvikheart.com.
  3. Jaroszewski et al. The SynCardia freedom driver: A portable driver for discharge home with the total artificial heart. J Heart Lung Transplant 2011 Jul 30(7):844-845.

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Comparative table of different devices addressing heart failure

Total orthotopic

Total orthotopic

Ventricular assis-

Ventricular assis-

tance devices

artificial heart

artificial heart

tance devices

THORATEC

CARMAT

SYNCARDIA

HEARTWARE

(HeartMate III®)

Visual of the system

Company supported by

Acquired by Saint Jude

Listed company

Medical in 2015 for

the private equity fund

Corporate

$ 3.3 billion, Saint

Acquired by Medtronic in

€ 60 million last fund

Versa Capital Manage-

information

Jude Medical acquired

2016 for $ 1.0 billion

ment since

raising in September 2019

by Abbott in 2016 for

September 2016

$25.0 billion

Bridge to Transplant

Bridge to Transplant

Bridge to Transplant

approval: 2004 (USA) and

approval: 2017 (USA)

Non-marketed product

approval: November 2012

Market access

1999 (CE marking)

Destination Therapy

Pivotal study ongoing

Destination Therapy

Study for destination The-

approval: 2015 (CE mar-

approval: September 2017

rapy: Pending

king) and 2018 (USA)

Bioprosthetic artificial

Artificial heart, with

Technology

heart, biocompatible,

pneumatic technology

autoregulated, pulsatile,

designed in the 70's

hydraulic activation

(Jarvik 7)

Ventricular asistance

Ventricular asistance

device, with centrifugal

device, with centrifugal

rotary pump

pump

Biocompatible materials

Relatively simple

Small devices - large patient size compatibility.

technology.

reducing adverse events.

Simple implantation.

Advantages

Pulsatile.

Autoregulation matching

Better complication rates than earlier devices or

patient physiological

Product already on the

current TAH.

needs. Pulsatile.

market.

Left support only.

Some patient size

Relatively high complica-

Disadvantages

tion rates. Limited auto-

restrictions.

matic function. Noisy.

Complication rates still relatively high.

Native heart problems impact.

Non-pulsatile.

Minimal autoregulation.

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Other artificial hearts Projects

TAH research is a dynamic area of device innovation with, to our knowledge, 5 other devices in various stages of development, the most advanced of which is Bivacor:

CARMAT welcomes this investment by potential competitors as it underlines the belief in the potential and benefits of total artificial hearts.

CompanyReinHeart RealHeart SmartHeart Bivacor OregonHeart

Location

Aachen, Germany

Vâsteras, Sweden

Cleveland, USA

LA / Houston, USA

Seattle, USA

Stage

Design

Design

Bench testing,

Chronic

Design

modifications

modifications

animal studies

animals

modifications

Visual of the prosthesis

1.3 the first Physiological Heart Replacement Therapy (*)

1.3.1 positioning on the market

The CARMAT artificial heart is intended to offer a permanent solution to patients with terminal heart failure who are facing a therapeutic stalemate due to the lack of human organs or illegibity to transplant.

The constraints on the adoption of mechanical heart replacement, as a major therapy, for the reasons detailed above, stimulated the design and development of the CAR- MAT PHRT, with special emphasis on improving the biological interface, and subsequent reduction in thrombotic and hemorrhagic complications.

A logical approach was to use the same materials already widely and successfully used, in bioprosthetic heart val- ves. Incorporated into this design was also a novel elec- trohydraulic drive system, which simulates human physiological blood flow and pressure profiles, together with a control system which provides a normal response to exercise.

* : hereafter PHRT for « Physiological Heart Replacement Therapy »

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Hospital System

Hospital

Monitoring

System

Implantable Part

Connection

System

External Patient

System

Patient Monitoring

2 X Batteries

Adaptator

Connection to home electricity supply

Source CARMAT - The complete CARMAT system

1.3.2 description of the carmat prosthesis

As presented on the above chart, the system consists of:

  • an implantable part, the bioprosthetic artificial heart;
  • an external wearable equipment allowing patient auto- nomy and return to home;
  • a hospital system/monitor allowing system configura- tion and patient monitoring.

the implantable prosthesis

The CARMAT PHRT prosthesis is a single-unit device with bio-prostheticblood-contacting surfaces designed for orthotopic placement, with a connection to an electrical supply (batteries or domestic network) via a percutaneous driveline.

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Source CARMAT - Overview of

the full prosthesis

Actuation liquid

Hybrid

membrane

Electrohydraulic rotary pumps

Each ventricle consists of two compartments, separated by a hybrid membrane. The membrane consists of processed bovine pericardial tissue, on the blood-contacting surface, and a polyurethane layer at the hydraulic silicone fluid contacting surface.

Two electrohydraulic rotary pumps create systolic and diastolic phases by rapidly reversing the direction of silicon fluid-flow that alternately pushes and pulls the membranes.

Pressure sensors in each ventricle provide information on preload and afterload, while ultrasound transducers measure the position of the membranes.

At implant, and when required, the physician can adjust the beat rate (10-150 beats per minute), the left ventricular stroke volume (30-65ml) and the right to left stroke volume ratio (to correct for the bronchial (lung) circulation) and alarm thresholds. The resulting pulsatile blood flow can range from 2 to 9 l/min.

Once the patient is stable after implant, the device is switched to the Automatic mode, which automatically adjusts device performance to changing physiological needs.

The combination of membrane characteristics and hydraulic actuation provides for physiological pressure and flow profiles. Electronics and microprocessors are contained within the device.

Four Carpentier- Edwards® bioprosthetic valves (Edwards Lifesciences, Irvine, CA, USA) are located at the inlet and outlet of each blood compartment to maintain unidirectional flow.

The prosthesis is partially surrounded by a flexible polyu- rethane compliance bag that contains the hydraulic fluid.

Electrical Connection

The transfer of electrical energy from the monitoring console or portable batteries to the prosthesis is made via a flexible percutaneous driveline.

This small diameter (8mm) flexible percutaneous driveline delivers power to the CARMAT PHRT and retrieves information on device performance. The driveline connects to wearable system. These provide an electronic interface for displaying essential device data for the patient, and an uninterrupted power supply for the device. The clinician connects a hospital console to the controller for initial

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setup and subsequent device monitoring and changes to the settings of the CARMAT PHRT.

the WEARABLE SYSTEM

The wearable system provides for patient autonomy and mobility, and allows him/her to be discharged from hospital and return home with a good quality of life.

Once the patient is stable after implant, the wearable system is substituted to the hospital monitor. The patient then only uses the wearables, except during periods of outpa- tient reviews and for downloading data. Several ancillary bags and covers are available to use with the wearable equipment.

A stringent training and monitoring system are put in place to ensure that the patient and close companions fully understand the safe operating principles of the system.

The Wearable system comprising :

  • A controller,
  • Two battery packs,
  • A carry bag.

The complete system weighs 3 kg.

The batteries provide at least 4 hrs of support at a blood flow of 6l/min.

the HOSPITAL MONITORING SYSTEM

The hospital monitoring system is only used in implantation centers by certified medical staff. It allows the medical team to configure and pilot the prosthesis during implantation, and to perform the follow up during periodic control visits. It also allows, for example, the downloading of new functions or versions of the prosthesis' softwares.

The hospital monitoring system is used to:

  • Configure the prosthesis during device implantation,
  • Monitor prosthesis functions,
  • Display alarms,
  • Collect data from the prosthesis.

Source CARMAT - The

hospital system

Source CARMAT - The patient

wearable system

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1.3.3 innovations and competing advantages

The CARMAT PHRT incorporates a number of innovative design features which, to our knowledge, are currently unmatched by any other MCS system on the market or, planned for any device under development.

Hemocompatibility

The most original feature is the use of bioprosthetic materials similar to those used for tissue heart valves over the past 35 years. This material is on the inner layer of the flexible membrane. The static surfaces of the ventricles are covered with polytetrafluorethylene, a material used in vascular surgery. Carpentier-Edwards bioprosthetic heart valves are used for the two inflow and outflow valves.

PULSATILE

The pumping action of the two ventricles is achieved by a viscoelastic movement, actuated by the embedded hydraulic pumps. This produces flow and pressure blood profiles which closely mimic those of the natural heart. This preserves valve durability and ensures optimal ventricular flow characteristics avoiding damage to blood cells and proteins.

Key Features:

  • Biologic:

Hemocompatible : Biocompatible material for blood contact surfaces

  • Electronics:

Auto-regulated : Automated response to the patient's physiological needs (activity adjustment, circadian rhythm)

  • Mechanic:

Pulsatile : Hydraulic pumps mimic diastole & systole

AUToregulation

Embedded electronics, microprocessors and ultrasonic sensors allow precise control and responses to changing patient physiological needs. In addition, they maintain an optimum balance between right and left pump flows.

In summary:

  • All blood contacting surfaces are covered by proven biocompatible materials;
  • Biological valves, which have been in clinical use for years, provide unidirectional flow;
  • The pumping action closely mimics human heart dynamics;
  • Blood damage and the activation of pathological changes are avoided;
  • An automatic function responds to changes in patient activity and needs.

BIOLOGY

MECHANICS ELECTRONICS

Source CARMAT

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Evaluation of explanted clinical pumps has confirmed the efficacy of biocompatible surfaces (see picture below and refer to Section 1.4 - « Clinical trials »). Patients were managed with a minimal anticoagulation therapy which is likely to be reduced further in the future, to a level used for patients with vascular stents.

Biosynthetic membrane

Ventricle in micro-

Biosynthetic interface

Carpentier-Edwards®

porous PTFE

with the atria

pericardial valve

Source CARMAT - Hemocompatible materials

other competitive advantages

Compatibility to human thoraxes / implantability:

The shape and size of the CARMAT PHRT prosthesis have been adapted to the anatomy of the human thorax, in order to fit the largest number of patients. This involved making design adjustments which allow the ejection of a normal volume of blood with each beat, whilst taking up the minimum thoracic space.

An advanced virtual 3D implantation system has thus been developed, based on a sophisticated three-dimensional simulation. This has produced a reliable non-invasive method for patient selection.

3D virtual Transplant simulator

Segmentation of

3D organ

Insertion of the

Assessment of

CT image sections

reconstruction

CARMAT 3D model

compatibility

Source CARMAT - 3D virtual transplant simulator

Surgical Experience

An implantable device can only be a valid therapeutic solution if the implantation is simple and reproducible. Under the supervision of Professor Carpentier, the CARMAT teams have therefore worked in tight collaboration with several surgeons, anesthesiologists, perfusionists and nursing personnel of the surgical community, to design and develop a procedure that any experienced cardiac surgical team can perform, even in emergency situations.

Notably an original interface with the patient's atria (upper heart chambers) was especially developed, which allows the surgeon to have much more room to work, and ensure a better subsequent alignment of the prosthesis. Once this interface is sutured to the atria, the prosthesis can simply be clicked into place.

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Experience gained during the pivotal study also shows that the implantation times of the CARMAT prosthesis are similar to those encountered for a human transplant.

The implantation procedure is also greatly facilitated by the fact that there is no adhesion of the tissues to the prosthesis.

1.4 go-to market process

As an active implantable device, the CARMAT TAH (total artificial heart) needs to be approved by the Competent Authorities of the different countries where CARMAT is willing to sell it. The regulatory pathways differ from one country to the other but in all cases, for such a critical device, the manufacturer is required to demonstrate its

safety and efficacy through evidences collected in laboratory testing and clinical studies.

At this stage, CARMAT's objective is to get approval to commercialize its device both in Europe and in the United-States.

1.4.1 GO-TO MARKET PROCESS

FOR EUROPE

process overview

The active implantable medical device directive, or "MDD" (AIMDD 90/385/EEC, modified by the directive 2007/47) defines the requirements to be met in order for the device to get the CE mark.

Evidences of safety and efficacy of the device are

reflected in a Technical File (TF) that is reviewed and audited by a Notified Body. CE marking is granted by the Notified Body following the successful completion of the TF's review and audit.

The full process is described in the following chart: (refer to Section 2 of this universal registration document for a description of the risks associated to this process)

Full audit of the CARMAT quality system by the notified body

  • Preliminary
  • Production (management of the environment, process validation method, control tests)
  • Management of anomalies
  • Identification and management of risks
  • Procurement (contrats, manage- ment and monitoring sub-contrac- tors audits)
  • Information systems
  • Maintenance, metrology
  • Human resources (skills, training)

ISO CERTIFICATION

13485-9001 obtained in July 2011, then renewed successful- ly, the lastest in July 2017

Establishment of a technical file

Audit of the dossier by the

notified body

- File produced (design, choice and

validation of materials, plans, labels,

leaflets, manuals, implantation proce-

dures, etc)

- Analysis of the

- Verification file for the full system,

technical file

sub-assemblies and components

Declaration

- Biocompatibility

- Audit of the organization

of European

- Tests on test systems (functional,

Conformity

and all of the product-related

endurance, etc)

processes

- Electro-magnetic compatibility tests

- On site

Labeling

- Validation of sterilization

- Within the major

CE

- Industrial validation - on site and

sub-contractors

with the sub-contractors

- Risk management file (Analyse of

- Compliance opinion

types of failure and effects of their

criticality (AMDEC) of the product and

processes)

- Validation file: clinical studies

Source CARMAT - CE marking procedure

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The CE marking, authorizes the commercialization of the product throughout the European Union. However, certain member states have put in place additional conditions concerning, for example, the registration or notification of market introduction.

The Medical Device Directive (MDD) is going to be superseded by the Medical Device Regulation (MDR) from May 2020. This regulation strengthens the requirements to be met for a device to be granted the CE marking. If the certificate (CE Mark) is granted before May 26th, 2020, then it will remain valid until May 26th, 2024 as long as there are no significant changes in the design or intended purpose of the device during this so-called "Grace Period" ; and the Company complies with MDR requirements relating to post-market surveillance, vigilance, and registration of economic operators and devices.

CARMAT announced that it had submitted its technical dossier (including the intermediate results from the pivotal study as described on the following page) to the notified body (DEKRA) in July 2019, and continues to take, in conjunction with the notified body, all necessary steps to obtain the CE marking in 2020.

Sections 1.4.1.2 and 1.4.1.3 describe the design and summarize the results so far of the clinical studies performed by CARMAT as part of this CE mark process.

PREPARATION OF THE CLINICAL TRIALS

Before initiation of clinical trials, the potential benefit of the device has been assessed by literature research, aimed to compare the device to existing therapies for end- stage heart failure. Next, a serie of simulation tests, bench tests to assess device reliability, and animal implants have been performed - all to identify/reduce potential risks for the patient prior to clinical testing.

An overview of these steps is provided in the illustration below:

Clinical trials in Europe must be pre-approved before initiation by the Competent Authority in each participating country and the local Ethics/Patient-Protection Committees.

CLINICAL STUDIES

Feasability study

  1. first-in-man(FIM) study was conducted in France in 2013-2016, with a small cohort (n=4) of sick and elderly patients. During this early clinical experience, the surgi- cal technique of device implantation was validated and the anatomic compatibility of the device confirmed. Technical upgrades to the prosthesis were implemented following device failures in the first two implanted patients. The Car- mat TAH was capable of providing adequate blood flows, with a cumulative support duration of 618 days, allowing 2 patients to return home and recover an almost normal qua- lity of life. Results of the FIM study have been published in peer-reviewed medical journals such as The Lancet 46,, The Journal of the American College of Cardiology 47 and The Journal of Heart and Lung Transplant 48.

Pivotal study

The FIM study was followed by the pivotal study involving 20 patients (two cohorts of 10 patients). The objective of this study, whih is still in progress, is to demonstrate the safety and performance of the CARMAT TAH, in patients suffering from irreversible biventricular heart failure.

The pivotal study began enrolling patients in 2016 with authorizations in France (2016), Republic of Kazakhstan

46 Carpentier A, Latrémouille C, Cholley B, et al. First clinical use of a bioprosthetic total artificial heart: report of two cases. Lancet. 2015 Oct 17;386(10003):1556-63.

47 Smadja DM, Bioprosthetic Total Artificial Heart Induces a Profile of Acquired Hemocompatibility With Membranes Recellularization. Journal of the American College of Cardiology 2017;70:404-6.

48 Latrémouille C, et al. A bioprosthetic total artificial heart for end-stage heart failure: Results from a pilot study. J Heart Lung Transplant. 2018 Jan;37(1):33-37.

Risk Reduction

Literature

Human

Animal tests

Bench tests

Simulation tests

CE

Marking

Clinical Investigation is last step to demonstrate Device Safety and Performance

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(2017), Czech Republic (2017) and then Denmark (2018) for

more than 70% of their time.

an enrollment of 20 patients (ClinicalTrials.gov - Identifier:

NCT02962973). The primary endpoint of the study is survi-

Of the 11 patients enrolled in the interim results,

val on a Carmat device at 180 days post-implant, or survi-

5 transplant-eligible patients received donor hearts after

val to cardiac transplantation, if occurring before 180 days

109, 155, 243, 304 and 308 days of CARMAT support wit-

post-implant. The results are analyzed in the Clinical Eva-

hout any procedure-related complications. Notably, there

luation Report, which is an integral part of the Technical

were no tissue adhesions around the device body, a known

File for the CE marking dossier.

procedural challenge with other circulatory support

devices. Moreover, explant analysis confirmed the early

Interim results of the pivotal study

findings of ongoing endothelialization of all of the blood

contact surfaces, thus attesting to the utility of using

CARMAT plans to communicate on the overall progress of

these particular biocompatible materials.

the CE marking and on the completion of significant miles-

tones in the pivotal study. In accordance with good clinical

The experience and results of this cohort of 11 patients,

practice and subject to regulatory requirements or special

in the pivotal study, have demonstrated a positive safety

circumstances, CARMAT will not communicate individually

and performance profile, notably with the absence of hae-

on patient implantations and their health status.

mocompatibility-related complications. This device com-

pares favorably with the current TAH (Syncardia®) in terms

Thus, CARMAT presented an update of the pivotal study in

of 6 months survival (73% vs 64%), neurological compli-

January 2019, and then most recently in November 2019.

cations (0% vs 23%), non-surgical bleeding (0% vs 20%),

The interim analysis presented in November included

driveline infection (0% vs 22%), anticoagulation (low-dose

11 patients, recruited between August 2016 and August

vs complicated regimen), noise (quiet vs noisy pneuma-

2018. In total, the pivotal study foresees the inclusion of

tics), physiological response (near normal vs limited) and

20 patients with terminal biventricular heart failure.

has shown to facilitate safe and quick implant/explant

surgery.

Survival after implantation of the CARMAT TAH was 91% at

1 month, and 73% of patients achieved the primary objec-

Refer to the table below for a summary of the results

tive of the study corresponding to 6 months of survival

obtained at this stage by CARMAT compared to other the-

with the prosthesis or a successful heart transplant in the

rapies at 6 months follow up:

months following the implantation of the CARMAT device.

Nine patients were discharged from the hospital to either a

The overall cumulative experience in the pivotal study now

home-setting or to a rehabilitation unit, where they spent

exceeds 6.5 patient years. Out of the 6 patients supported

Survival rate

Bleeding /

Gastrointestinal

Percutaneous

Device

Stroke

cable-related

at 6 months

Reintervention

bleeding

infection

CARMAT prosthesis

Faisability study

50 %

0 %

75 %

0 %

0 %

(n=4)

CARMAT prosthesis

Pivotal study

73 %

0 %

36 %

0 %

0 %

(n=11)

SynCardia *

54 % - 62 %

23 %

41 %

20 %

22 %

BIVAD **

46 % - 68 %

7 %

na

7 %

7 %

  • : Arabia F et al, J Heart Lung Transplant, 2018; 37; 1304-1312. Demondion P et al, Eur J Cardiothorac Surg. 2013 Nov: 44(5):843-8
  • : Lavee J et al, J Heart Lung Transplant 2018; 37; 1399-1402

Source CARMAT - Intermediate results pivotal study (Cohort 1)

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for longer than 6 months, 3 were transplanted as indicated above, and 1 has now been supported for nearly 24 months. Moreover, the longest freedom-from-failure now exceeds 5 years on bench tests.

The analysis of all information gathered from the experience accumulated with the first cohort of the pivotal study and data recorded on test benches, prompted CAR- MAT to halt patient enrolment and production in Octo- ber 2018 in order to implement a number of changes to its manufacturing processes.

Subsequently, CARMAT restarted production in May 2019

and received approval to resume the Pivotal Study in Den- mark (August 2019), Czech Republic (November 2019) and Kazakhstan (December 2019), with an implant in Czech Republic in November 2019, marking the 12th patient enrolled.

The clinical experience to date suggests that the benefits of improved health status and life quality, enjoyed by CARMAT TAH patients and notably those who are transplant-eligible, outweighs the risks associated with the device and that it has the potential to provide a significant contribution to the field of heart replacement therapy.

1.4.2 GO-TO MARKET PROCESS FOR THE UNITED STATES

Selling CARMAT heart in the United-States of America is subject to obtaining an approval (PMA: Pre-Market Approval) awarded by the American Health Authority (FDA: Food & Drug Administration).

In order to submit a PMA application to the FDA, CARMAT is required to supplement its existing clinical evidences with additional clinical results from a new multicenter clinical study performed on a larger population. Conducting this study in the United States requires an authorization (IDE: Investigational Device Exemption) to be obtained from the FDA following a successful review of all of the pre-clinical data (technical studies, animal studies, etc.) and clinical data obtained in other countries.

In October 2013, the FDA published a guidance document on «Early Feasibility Studies» (EFS). This approach to feasibility studies was designed to allow for acquisition of initial clinical knowledge when additional non-clinical testing methods are not available or are not sufficient to initiate a pivotal study. These studies may be initiated before the design of the device is finalized and may be justified on the basis of less evidence than for other types of clinical

studies. This « EFS » approach was chosen by CARMAT. In 2014 the Company began preliminary work to support its regulatory strategy for the United States.

In August 2018, CARMAT submitted to the FDA, an application to start a feasibility study (EFS).

In September 2019, CARMAT received from the FDA a conditional approval to its application. This conditional approval allows CARMAT to initiate the patient enrollment process for its Early Feasibility Study in the United- States. The approval was granted for a study limited to 10 patients.

Upon successful completion of the EFS, CARMAT will submit another application to initiate a pivotal study in the USA, which results will support its PMA application. This strategy would allow for the integration of certain clinical data got in Europe into the PMA application, thus limiting the size of the pivotal study to be conducted in the USA.

Refer to Section 2 of this universal registration document for risks associated with getting a PMA from the FDA.

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1.5 Strategy of the company

1.5.1 regulatory strategy

CARMAT is currently seeking to obtain first the CE mar- king, which will allow it to market its prosthesis in Europe; and secondly, that of the PMA (pre-market-approval) which will allow the Company to market his prosthesis in the United-States.

The CE marking is issued by a « Notified Body » (in the case of CARMAT, it is the company DEKRA); while the PMA is issued by the American FDA (Food & Drug Administration).

The processes to obtain the CE marking and the PMA are specified in Section 1.4 of this document, as is CARMAT's progress in this area.

1.5.2 marketing strategy

In europe

The Company will be able to market its product throughout Europe as soon as the CE marking is obtained, subject to the application of national systems covering the cost of the device (refer to Section 2 of this document, for risks associated with reimbursement and taking charge of the system).

To date, the Company intends to market its prosthesis through a direct sales force in the main European coun- tries, and where appropriate distributors or agents rigorously selected in countries deemed less strategic, or when this modality seems to him more appropriate given the local context.

This choice for a direct sales force stems from two factors:

  • rigorous selection of the indications and the need for technical and clinical support for each implantation. This support is provided primarily by the Company in the training and launch phase;

Indeed, given the very limited number of human grafts, the number of truly active heart transplant centers - that is to say, which exploit their approval and perform a sufficient volume of transplants to keep teams available and trained

  • is very low, of the order of less than ten in each large country. For example, fewer than 10 centers in France and Germany perform more than 20 transplants per year.

The Company therefore considers that, to cover this target made up solely of centers of excellence, a direct sales force is the most appropriate response in the first phases of commercial development (3 to 5 years after commercial launch in Europe). In the longer term, when the Company has a larger clinical and medico-economic data base and has confirmed the adoption by the implantation cen- ters, an expansion of the number of centers may be gradually implemented.

Regarding the order in which the different European countries will be approached, it will depend on the prevalence of cardiovascular diseases, the size of the centers, and the national systems for covering the cost of the device. To date, taking into account these elements, the first market targeted by CARMAT for the marketing of its prosthe- sis after obtaining the CE marking, should be Germany.

  • a concentric approach strategy to the market involving focusing initially on the center of the target, i.e. the active heart transplantation centers (at least 20 car- diac transplants per year) followed by the less active centers, then the centres with teams dedicated to heart failure (surgery and cardiology) but who are not appro- ved for transplantation and finally, if the local regula- tions permit, all cardiac surgery centers.

The sales force will therefore initially consist of very clinical profiles to ensure the training and adoption of therapy by the medical and surgical community.

This approach should allow progressive investments.

With regard to the pricing policy, the price targets for the CARMAT bioprosthetic artificial heart are consistent with current reimbursement practices for available devices. For example, an implantable device for left mono-ventricular assistance is today reimbursed in Europe between €60,000 and €110,000 excluding taxes (approximately €90,000 excluding taxes in France)49. Since the CARMAT heart treats both parts of the heart, and being made up of a system that includes an implantable part, but also external parts and associated pre- or post-operative ser-

49 Liste des Produits et Prestations remboursables - LPP (ameli. fr) : le prix unitaire réglementé (arrêté du 29/11/2012) du HeartMate II® monoventriculaire est de 87 565 euros.

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vices, the pricing variables are numerous and could make it possible to adapt to the volume and reimbursement conditions specific to each center or each market, while maintaining overall price consistency at European level.

The reimbursement procedures are multiple and different for each country. The Company will therefore associate itself as necessary with local reimbursement experts in order to optimize and accelerate the management of its device. It also assembles the medico-economic data necessary to support the reimbursement and care procedures.

The Company considers that the absence of reimbursement would not be synonymous with the total absence of sales and income, in particular insofar as hospitals in certain countries have their own budgets to finance

innovation, but would not allow the development of sales in line with its financial objectives.

Finally, it should be noted that Stéphane Piat, who joined CARMAT in September 2016 as Managing Director, has considerable experience in the field of the marketing of medical devices, in particular within Johnson & Johnson Cordis and Abbott.

In the united-states

The development of a commercial approach to the Ame- rican market is premature at this stage. However, at this stage, CARMAT intends to apply the same fundamentals as for Europe both in terms of commercial structure and development, reimbursement and prices.

1.5.3 industrial strategy

choice of integration model

The Company designs or specifies all of the elements making up the CARMAT artificial heart, including its external elements as well as all the ancillary tools, packaging, systems and methods intended for the validation (test benches) and production of components, sub-assemblies and systems (clean room). It has also developed strong intellectual property rights concerning all of these ele- ments. Nevertheless, considering the very high number of specialties and expertise involved in each component and sub-assembly of the system, it was impossible to develop and to produce them all internally.

The Company has therefore adopted a model of integra- tion: it designs and specifies, but entrusts the manufacturing of most of the elements to specialized subcontractors, recognized in their domain of activity and selected following rigorous consultation - elements which it then integrates on its production site.

CARMAT integrates the components and sub-assemblies provided by manufacturers of very different sizes, methods and areas of expertise. Thus the Company has hundreds of manufacturers of elements or service providers linked to the CARMAT system.

The challenge for a company such as CARMAT involves federating these companies with different origins and methods (some are large sub-contracting groups in the space industry and others are very small specialist com- panies) with common strict processes as are required by the medical technologies field and regulatory authorities. This coordination relates to technical aspects, logistics and in particular, quality. Great efforts have been made by the Company to validate and qualify these suppliers, so

that each one of them conforms to the very high level of quality standards required by the active implantable medical device domain.

CARMAT's mode of operation, its methods, and its integration process are therefore identical to those of a large group in the management of a project as complex as that of the bioprosthetic artificial heart.

In parallel, the Company actively continues a strategy of developing a secondary source of supplies, in particular the transformation of critical raw materials or the supply of key components. To initiate a second source involves the selection of a new supplier, help in producing the first parts, then qualifying them while ensuring that each part comes from a source that is strictly identical to those coming from another source, including the documentation which comes with them in particular to satisfy the imperatives of quality and traceability. It is important work but vital to reduce the dependency of the Company with regards to their suppliers and also so that CARMAT can have materials and components in sufficient volumes, and at the level of quality required, to meet its needs both in the development phase and in the marketing phase of its prosthesis.

internalizeD production and production capabilities

In contrast, the Company has kept and retained the production of the biosynthetic elements of the prosthesis (ventricular biomembrane, ventricular coverings and atrial connection interfaces) internal, protected by numerous patents and by industrial secrets.

2017 year was marked by the construction of a new dedicated site to manufacture up to 500 units per year, site that was opened and certified in 2018. This site, with an area of ​1,600 m², located in Bois d'Arcy in the immediate

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suburbs of Paris, has a 270 m² clean room complying with ISO 7 standards. The manufacture, integration and sterilization of prostheses are thus carried out in a controlled environment, by specialized and highly qualified person- nel. The entire production of prostheses is now from this site.

The manufacturing, particularly on a large scale, of a device as complex as the CARMAT core remains a

challenge. On the industrial level, in addition to its actions of securing supplies, the Company therefore constantly pursues the improvement of its information systems, and the adaptation of its production processes with an objective of reliability and better replicability, and in - fine qua- lity. These improvements also aim to increase production capacities, in particular with a view to marketing the prosthesis. In 2019, CARMAT successfully carried out more than 50 changes to its production processes.

1.5.4 Innovation and R&D management

application of skills

CARMAT benefits thanks to its history on the bioprosthetic artificial heart project and thanks to its teams, an exceptional and unique double know-how stemming from more than 15 years of development and collaboration between the medical world and the world of aeronautics and space, in the implementation of biomaterials and advanced technologies applied to the field of artificial bioprosthetic heart.

In addition, contributions specific to the medical world and to the world of aeronautics and space, the Company also knew how to bring together skills that had never used to collaborate together on such a complex project and acquire each of the know-how specific to these fields.

Emboldened by this unique capacity for creating synergies between skills from industry and from the medical world, CARMAT could eventually, beyond the field of

bioprosthetic artificial heart, tackle in the future the development of new applications of its know-how in the cardiovascular field. Original simple devices derived from research already carried out by CARMAT and the patents that it holds, in particular with regard to hemocompatible biomaterials, could also be developed. Products derived from patents which have already been submitted - particularly in the field of digital simulation and ancillary implantation materials - may also result in commercial marketing or sale of rights. Original services could also be commercialized.

However, at this stage, the Company does not plan to devote resources to these potential applications, and remains focused on finalizing the development and improving and improving the reliability of its artificial heart with a view to its future commercialization. On the other hand, it pursues an aggressive policy of protection of its intellectual property and ensures a permanent technological watch of the technologies and methods corresponding to its fields of activity.

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intellectual property

Patents and other intellectual property rights are of fundamental importance in the medical devices sector. CAR- MAT regularly files patent applications to protect its innovations.

- Patents:

CARMAT's portfolio of patents is made up of 11 patents held in the name of the Company, classified in two catego- ries: firstly, patents associated with the architecture of the bioprosthetic artificial heart project and secondly, patents linked to the hemocompatible materials and sub-assemblies of the prosthesis.

Details of these patents are set out below:

Title

Geographical area

Submission /

Date of

Status

publication no.

Submission

FR0605333

Granted on September 05,

France

June 15, 2006

2008

FR2902345

Expiring on June 15, 2026

« One-piece heart

EP07290725.6

Granted on July 15, 2009

prosthesis implantable in

Europe

June 11, 2007

an anatomical position »

EP1867352

Expiring on June 11, 2027

International

PCT/FR2007/000962

June 11, 2007

Published on December 21,

WO2007/144497

2007

Granted on January 22,

France

FR200800184

January 14, 2008

2010

FR2926223

Expiring on January 14,

« Implantable one-piece

2028

EP09290009.1

Granted on January 12, 2011

heart prosthesis »

Europe

January 07, 2009

Expiring on January 07,

EP2078533

2029

International

PCT/FR2009/000008

January 07, 2009

Published on September 17,

WO2009/112662

2009

Granted on January 22,

France

FR0511430

November 10, 2005

2010

FR2892939

Expiring on November 10,

« Composite hemocom-

2025

patible material and the

EP06291657.2

Granted September 23,

process through which

Europe

October 25, 2006

2009

this is obtained »

EP178515

Expiring October 25, 2026

International

PCT/FR2006/002471

November 07, 2006

Published on May 18, 2007

WO2007/054637

FR0604206

Granted on January 01,

France

May 12, 2006

2010

FR2900988

Expiring on May 12, 2026

« Reduced radial volume

EP7290571.4

Granted on January 28,

rotatory volumetric

Europe

May 07, 2007

2009

pump »

EP1855005

Expiring on May 07, 2027

International

PCT/FR2007/000778

May 07, 2007

Published on November 29,

WO2007/135261

2007

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description of activities

Title

Geographical area

Submission /

Date of

Status

publication no.

Submission

FR0605331

Granted on September 05,

France

June 15, 2006

2008

FR2902343

« Rapid connection

Expiring on June 15, 2026

device between a totally

EP07290723.1

Granted on September 24,

implantable cardiac

Europe

June 11, 2007

2008

prosthesis and natural

EP1867350

Expiring on June 11, 2027

atria »

International

PCT/FR2007/000959

June 11, 2007

Published December 21,

WO2007/144495

2007

FR0605332

Granted on September 05,

France

June 15, 2006

2008

FR2902344

« Connection device

Expiring on June 15, 2026

Granted on September 24,

between a cardiac

EP07290724.9

prosthesis and natural

Europe

June 11, 2007

2008

EP1867351

atria »

Expiring on June 11, 2027

International

PCT/FR2007/000960

June 11, 2007

Published on December 21,

WO2007/144496

2007

France

FR0703339

May 10, 2007

Granted on June 04, 2010

« Process for producing

FR2915903

Expiring on May 10, 2027

a hemocompatible item

Europe

EP08290405.3

April 28, 2008

Granted on May 06, 2015

with a complex configu-

EP1992369

Expiring on April 28, 2028

ration and item thereby

PCT/FR2008/000607

obtained »

International

April 28, 2008

Published on December 04,

WO2008/145870

2008

France

FR1001724

April 22, 2010

Granted on July 13, 2012

FR2959134

Expiring on April 22, 2030

« Process for obtaining

EP11161291.7

Granted on September 12,

a composite hemocom-

Europe

April 06, 2011

2012

patible material and

EP2380608

Expiring on April 06, 2031

material obtained »

International

PCT/FR2011/050768

April 06, 2011

Published on October 27,

WO2011/131887

2011

France

FR1152364

March 22, 2011

Granted on July 04, 2014

FR2972919

Expiring on March 22, 2031

« Process to ensure the

EP12158011.2

Granted on November 02,

connection of an anato-

Europe

March 05, 2012

2016

EP2502577

mical duct »

Expiring on March 05, 2032

International

PCT/FR2012/050449

March 05, 2012

Published on September

WO2012/127145

27, 2012

France

FR1500457

March 10, 2015

Granted on March 24, 2017

Expiring on March 10, 2035

« Tissue endoprosthesis

Published on September

and the process through

Europe

EP16159051.8

March 07, 2016

14, 2016

which this is produced »

International

PCT/FR2016/050525

March 07, 2016

Published on September

WO2016/142617

15, 2016

France

FR1756847

July 19, 2017

Granted on July 26, 2019

« Flexible barrier

Expiring on July 19, 2037

membrane and method

Published on January 23,

of manufacturing

Europe

EP18179971.9

June 26, 2018

2019

the flexible barrier

membrane »

International

PCT/FR2018/051562

June 26, 2018

Published on March 31,

2019

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- Exclusive licence agreements:

Exclusive licence contract with the Pierre et Marie Curie University

In the terms of an exclusive licence contract dated 17 June 1993, modified by amendment no. 1 of June 27, 1995 and by amendment no. 2 of November 12, 1997, the Pierre et Marie Curie University gave Matra Défense the rights to use patent no. 8800381 to plan studies and further development with a view to creating prototype artificial hearts implantable into human beings.

Although initially it was Matra Défense which used the intellectual property rights thus granted, the benefit of this license was subsequently assumed by CARMAT, to which the Université Pierre et Marie Curie consented by way of an agreement duly signed by the Université Pierre et Marie Curie, Matra Défense, the Scientific Research Association of the Alain Carpentier Foundation and CARMAT. Under this agreement (i) the Université Pierre et Marie Curie expressly waived any benefit from all intellectual property rights linked to or resulting directly or indirectly from the work on the bioprosthetic artificial heart project

and acknowledged that CARMAT was the sole owner of all the intellectual property rights that could have been attributed to the Université Pierre et Marie Curie; and (ii) in return, the Scientific Research Association of the Alain Carpentier Foundation granted at no cost, in its name and for its account and in the interest of Matra Défense, 400 CARMAT shares (equivalent to 10,000 CARMAT shares following the 25:1 stock split) to the benefit of the Université Pierre et Marie Curie.

Patent No. 8800381 has now expired since 2008. Howe- ver, the exclusive license agreement stipulates that it will be valid for five years from the date of the first marketing of the product implementing the patent claims for the European countries as well as other countries and will be tacitly renewable for two successive five-year periods, unless one or the other party cancels one year before each deadline.

- Trade marks:

The Company has registered the « CARMAT » trademark in the following countries or geographical zones

Registration

Statut

Date filed

Renewal date

Territories

Classes

number

023184827

Recorded

Sept. 23, 2002

Sept. 23, 2022

France

9, 10, 42

007374821

Recorded

Oct. 29, 2008

Oct. 29, 2028

Community

10, 42

(European Union)

International

1022720

Recorded

June 19, 2009

June 19, 2019

Designations: China,

9, 10, 42

Japon, Switzerland,

Russia

3663230

Recorded

January 07, 2009

August 04, 2019

United States

10, 42

(USA)

1442665

Recorded

June 25, 2009

Sept. 27, 2026

Canada

10, 42

200911637

Recorded

June 24, 2009

June 24, 2019

South Africa

10

200911637

Recorded

June 24, 2009

June 24, 2019

South Africa

42

1838058

Recorded

July 09, 2009

July 09, 2019

India

10, 42

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- Domain names:

The Company has filed the following domain names:

Domain name

Date reserved

Renewal date

aeson.eu

August 22, 2019

August 22, 2024

aeson.fr

August 22, 2019

August 22, 2024

aeson.uk

August 27, 2019

August 27, 2024

aeson-phrl.com

August 26, 2019

August 26, 2024

carmatsas.com

October 29, 2008

October 29, 2028

carmatsas.fr

October 29, 2008

October 29, 2028

carmatsas.eu

October 29, 2008

October 31, 2028

carmat.tel

February 20, 2009

March 22, 2019

carmatsa.fr

April 29, 2010

April 29, 2021

carmatsa.com

April 29, 2010

April 30, 2021

carmatsa.eu

April 29, 2010

April 29, 2021

1.5.5 PROVISIONAL project schedule

CARMAT made very significant progress in 2019, including:

  • In terms of access to the European market:
  • the submission of its CE marking technical file in July;
  • confirmation in November of the positive interim results of its pivotal clinical study, based on the first 11 implanted patients; with in particular 73% of the patients having reached the primary objective of the study, and the confir- mation of the very good profile of the device as regards safety (cf. details of the results in section 1.4.3 of this uni- versal registration document).
  • In terms of market access in the United States: the authorization (« conditional approval ») received in Sep- tember from the FDA (Food & Drug Administration) to start a clinical feasibility study (EFS - early feasibility study) in the United States.
  • On an industrial level: Finalization of the transfer of all production from the old Vélizy site to that of Bois d'Arcy, and the implementation of more than 50 process changes, intended to improve reliability and the qua- lity of production, as well as to facilitate the ramp-up.
  • In terms of transforming CARMAT into an industrial and commercial company: strengthening the Com- pany's information systems, continuing to prepare for the commercial launch, and strengthening the team, particularly in the areas of production and information systems.
  • In terms of financing: a fundraising of €60 million and the drawing of the first tranche (€10 million) of the loan granted in December 2018, under conditions, by the European Investment Bank .

In view of these advances, the CARMAT project calendar is updated as follows.

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The reader is invited to refer to chapter 2 (« Risk factors ») of this universal registration document, for an informed assessment of this schedule, as well as to the Company's regular press releases on the progress of the project.

SCOPE OF ACTIVITY

2020

2021

2022

EUROPEAN

Finalization of the pivotal study

Continued commercial

deve-

MARKET

Marketing in Europe

Obtaining CE Marking

lopment in Europe

ACCESS

US MARKET

Start of transplantations in the

Start of the pivotal study in

United States as part of the

Finalization of the EFS study

ACCESS

feasibility study (EFS)

the United States

Continuous improvement of

production processes

INDUSTRIAL

Continuation of the actions of

securing critical supplies

Production ramp-up

MARKETING &

COMMERCIAL

Preparation for commercial launch

Commercial launch in Europe

Product final commercial

Continuous improvement

PRODUCT

configuration

of the product

SUPPORT

Adaptation of the

organization and strengthening of information systems

Implementation of sales

FUNCTIONS

administration and sales logistics

FINANCING

Continuation of the actions of

financing of the Company

Source CARMAT - Provisional project schedule

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risks factors

risks factors

CARMAT

49

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risks factors

Caution:

Investors are invited to take into consideration all the information contained in this Universal Registration Docu- ment, including the risk factors described in this Chapter.

When preparing this registration document, the Company carried out a review of the risks which might have a significant unfavorable impact on its activity, its financial situa- tion, its performance, its development or its prospects,

and it considers that there are no other significant risks than those presented.

However, investors' attention is drawn to the fact that other risks which are unknown or whose materialization is not considered, at the date of filing this registration docu- ment, as liable to have a significant unfavorable impact on its activity, its financial situation, its performance, its development or its prospects, might or may exist.

2.1 Methodological approach

2.1.1 preamble

As part of the new Prospectus 3 regulations applicable from July 21, 2019, CARMAT has redesigned this Risk

Factors chapter, in order to simplify the presentation of information relating to risks and to continue to improve its readability.

2.1.2 Risks identification and classification

During 2019, the Company identified and ranked its risks. The result of this analysis was presented to the Audit Committee on February 5, 2020 and is reflected in this universal registration document.

Methodology and risk assessment:

The risks were identified with the assistance of all the members of the management committee. The risks fall into 5 categories:

  • Financial risks;
  • Industrial risks (supply chain);
  • Market access risks;
  • Human, organizational and non-compliance to the regu- latory environment risks;
  • IT, data and transaction risks.

The level of criticality of a risk is assessed on the basis of two criteria:

  • The impact, estimated on a scale 01 from 1 (not signifi- cant) to 5 (critical);
  • The probability of occurrence, estimated on a scale 02

01 Impact scale: 1 = not significant, 2 = minor, 3 = moderate, 4 = major and 5 = critical.

  1. Probability scale: 1 = almost zero probability, 2 = possible, 3 = probable and
  1. = very probable.

from 1 (almost zero probability) to 4 (very likely).

The combination of these two criteria makes it possible to give a score to each risk and thus to classify the risks into

4 levels of criticality 03 (criticality = impact x probability): Critical, Important, Moderate, Minor.

It is specified that the level of criticality is a «net» level, that is to say after taking into account the measures implemented by the Company, to prevent and mitigate the risk.

At a result of this analysis exercise, 12 risks were considered significant and specific by CARMAT, and are summarized in section 2.2.

CARMAT also assessed the trend for each risk. The trend can be positive, negative or neutral, depending on whether CARMAT considers that the risk level has increased, decreased, or has remained more or less the same, between fiscal year 2019 and fiscal year 2018.

03 A risk is considered critical if its score is equal to or higher than 16, as important if its score is between 10 and 15, as moderate if its score is between 7 and 9, and as minor if its score is between 0 and 6.

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2.2 summary of significant and specific risks

The table below summarizes the significant and specific risks of the Company. They are presented by category. Within each category, the most significant risk is mentioned first, if applicable.

For each risk are specified: its title, its probability and potential impact levels, its criticality (resulting from the two previous elements) and its trend.

Each of the risks is presented in more detail in section 2.3.

Probabi-

Potential

Criticality

Trend *

lity

impact

Critical

Important

Moderate

Minor

risk

risk

risk

risk

Financial risks

Financing risk

2

5

Important

+

risk

Risk of economic and financial

2

5

Important

=

unsustainability

risk

Industrial risks (supply chain)

Materials and components

4

3

Important

=

supply risk

risk

Risk related to production quality

2

5

Important

+

risk

Risk related to production volumes

3

3

Moderate

=

risk

Market access risks

Risk associated with obtaining

2

5

Important

=

CE marking in Europe

risk

Risk associated with obtaining

2

5

Important

+

PMA in the United States

risk

Risk related to reimbursement

2

5

Important

=

on European markets

risk

Risk related to reimbursement

2

5

Important

=

on the American market

risk

Human, organizational and non-compliance to the regulatory environment risks

Organizational and non-compliance to the

3

3

Moderate

=

regulatory environment risks

risk

Human resources risks

3

2

Minor

=

risk

IT, data and transaction risks

IT, data and transaction risks

2

4

Moderate

=

risk

* the + sign indicates a positive trend, i.e. a decrease in risk.

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2.3 Detailed presentation of significantand specific risks

2.3.1 Financing risk

Financial risks

Description of the risk

Risk that the Company does not have the financial

Financing risk resources required to carry out its development project at the desired pace or to its point of self-financing.

Potential impacts

Need to slow down or temporarily interrupt all or part of the activities of the Company.

At the final stage, need to end the activities of the Company.

Taking into account, on the one hand, the financial resources at its disposal (see section 3.1.1 of this docu- ment), and in particular the available cash position of € 55.5 million as of December 31, 2019, the fundraising of € 60 million carried out in September 2019, the balance of € 20 million of the loan granted under conditions by the EIB in December 2018, the degree of progress of its project, and all the information at its disposal, the Company estimates that at this stage, the probability that she will not be able to find the financing needed to complete her project is relatively low, but this possibility cannot be excluded.

Indeed, the financial resources available (as described in Section 3.1.1) allow the Company to finance itself until the third quarter of 2021; excluding the Kepler Cheuvreux equity line contracted in September 2018;

and the Company considers that by this deadline, the conditions, in particular in terms of the progress of the project, will be met to raise new funds, provided that unforeseen and significant events have not occurred.

The Company is constantly pursuing an active investor relations policy, and seeking new investors both in France and abroad and believes it can count on the support of certain existing shareholders for its next fundraising.

The Company has also carried out a specific review of its liquidity risk and considers that it is able to meet its maturities over a period exceeding 12 months.

2.3.2Risk of economic and

FINANCIAL unsustainability

Financial risks

Description of the risk

Potential impacts

Risk that the Company will not succeed (or will succeed later than expected) to be profitable and / or reach its point of self-financing. This could in particular be due to lower revenues than forecasted due to lower than expec-

Risk of economic and ted sales volumes, lower selling prices than expected, financial unsustainability failure of the system to cover the various reimbursement

systems, etc. This could also be due to costs or necessary investments higher than expected (research and development costs, cost of clinical trials, cost of production of the prosthesis, other operational costs, etc.).

Negative impact on the market valuation of the Company. Need to slow down or temporarily interrupt the activities of the Company. Need to find additional funding (fundraising, loans, etc.).

At the final stage, need to end the activities of the Company.

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CARMAT's ability to deliver positive cash flow and positive net income over time requires reaching a certain level of sales, controlling expenditure and investments, as well as controlling the production cost of the device. Although the Company considers its assumptions and estimates to be reasonable, it cannot be guaranteed that all of its objectives will be achieved within the expected timeframe.

The Company is still at clinical stage and has not yet obtained authorization to market its device in Europe and in the United States (see Sections 2.3.6 and 2.3.7). The device represents an expensive therapy, and there is no guarantee that it will be reimbursed at the levels expected by the Company (see Sections 2.3.8 and 2.3.9).

Furthermore, since the CARMAT heart is a unique and innovative therapy, there is no guarantee that the adoption by healthcare professionals and patients will be in line with CARMAT forecasts.

Finally, the profitability of CARMAT requires that it manages to produce its device at a competitive cost despite the complexity of the product and the level of quality required; and it is possible that CARMAT may have to face expenses and investments not anticipated to date, for example in the event that the authorities ask for additional clinical studies. This risk is further accentuated by the fact that CARMAT is only targeting the marketing of one product at this stage (namely its artificial heart) and is therefore dependent on its success.

2.3.3materials and components supply Risk

Industrial risks

Description of the risk

Potential impacts

(supply chain)

Materials and components

supply risk

Risk that the Company will not be able to obtain from its suppliers, in sufficient quantities / within the required time / to required quality standards, the various materials or components necessary for the production of prostheses. This can be linked in particular to the fragility of certain suppliers and / or to the limited capacity of certain suppliers, and / or to the fact that CARMAT is in single source on certain components or materials, and / or the obsolescence of sourced products. This may also be due to an insufficient quality of the CARMAT forecast.

CARMAT's inability to produce prostheses in sufficient quantities, which could lead to a delay or an interruption in its development, and

  • or an inability to meet the needs of the mar- ket; and therefore a negative financial impact.

As indicated in section 1.5.3 of this document, the Com-

In order to secure its supplies, CARMAT regularly conducts

pany depends for the manufacture of its device on a large

a review of its supplier portfolio and an assessment of

number of suppliers and subcontractors, of extremely

its needs in materials and components. In this context,

diverse sizes, some being more solid than others, and

a policy of « double-sourcing », modification of sourcing

some having a capacity to ramp-up quicker than others.

and / or capacity building at critical suppliers, is gradually

It cannot be excluded that certain components or mate-

implemented. However, despite the implementation of this

rials must be substituted or modified to answer questions

program, the risk of temporary insufficient supply of cer-

of obsolescence, or in the context of continuous improve-

tain components or materials remains a significant risk

ment of the artificial heart. In addition, the validation of a

for CARMAT, especially when the volume of prostheses

new supplier or subcontractor is a long and costly opera-

necessary to meet the needs of clinical trials and the com-

tion; and the quality requirements imposed by CARMAT

mercial phase is growing.

are high.

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2.3.4 Risk related to production quality

Industrial risks

Description of the risk

Potential impacts

(supply chain)

Risk that the Company will not be able to routinely

produce prostheses that meet the required quality

Risk related to

standards, in particular due to manual or sub-optimal

production quality

production processes and procedures, or due to the lack

of competent resources, or due to an inadequate infor-

mation system or organization.

CARMAT's inability to produce prostheses that meet the required quality criteria, which may cause a delay or an interruption in its develop- ment, and / or an inability to respond to market needs; and therefore a negative financial impact. Potentially, the patient's life is at stake in the event of an unexpected failure of an implanted prosthesis, with consequently a potential financial risk associated in the event of CARMAT being called into question.

CARMAT complies with the highest quality requirements and has set up a quality management system (QMS) certified ISO 13485-9001 in July 2011. The certification has been successfully renewed regularly since, and for the last time in July 2017. The Company considers, in particular on the basis of its internal audit results and on the basis of the audits carried out by the notified body DEKRA, that this system enables it in particular to quickly identify the quality defects which must be, and implement appropriate preventive and corrective actions.

However, and taking into account in particular the complexity of its artificial heart, the large number (several hundred) of materials and components used in its manu- facture, the number of operations necessary for the manufacture of the heart, and the very high degree of precision required, it cannot be excluded on the one hand that the Company has to face quality challenges likely to temporarily slow down its production, and on the other hand to deal exceptionally with a product incident due to a defect quality.

2.3.5 Risk related to production volumes

Industrial risks

Description of the risk

Potential impacts

(supply chain)

Risk related to

production volumes

Risk that the Company will not be able to produce a sufficient number of prostheses to meet its needs (in the pre-marketing phase or in the post-marketing phase), in particular due to manual or sub-optimal production processes and procedures, and / or the lack of production capacities and resources, and / or an inadequate information system; and also in the event of unavailability of the sole production site (due to a disaster for example).

CARMAT's inability to produce prostheses in sufficient quantities, which could lead to a delay or an interruption in its development, and / or an inability to meet the needs of the market; and therefore a negative financial impact.

In the MedTech segment in general, and more particu-

The Company has already made, in particular in 2019,

larly for a product as complex as the artificial heart deve-

several dozen of modifications to its production pro-

loped by CARMAT, the production of large series remains

cesses, and will continue its actions of continuous impro-

a challenge. Although the Company has an industrial tool

vement and automation in the coming years so as to make

(Bois d'Arcy production site) allowing it to produce seve-

production operations more reliable and to facilitate

ral hundred of devices per year, the production process

ramp-up.

remains complex, and is based in part on very high preci-

sion manual operations.

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However, the Company considers it possible that the rate

prevent demand from exceeding its production capacities,

of ramp-up of its production may not be high enough to

particularly in the short term.

2.3.6Risk associated with obtaining CE marking in europe

Market access

Description of the risk

Potential impacts

risks

Risk that the Company will not obtain (or obtain later than expected) the CE marking, i.e. authorization to market its prosthesis in Europe. Risk that the indications

Risk associated with obtaining obtained are less broad than those anticipated. This may

CE marking in Europe in particular be due to clinical data deemed insufficient, and / or to a technical file and / or to audits deemed insufficiently satisfactory, and / or to changes in the regulatory framework.

Inability for CARMAT to market its prosthesis in Europe and in other countries recognizing the CE marking (or delayed marketing compared to forecasts), resulting in the absence of sales (or delayed or lower sales compared to forecasts) in these territories.

In order to be able to market its artificial heart in Europe, CARMAT must first obtain the « CE marking » (European declaration of conformity - CE marking), issued by a notified body. The process to obtain this CE marking is described in Section 1.5.1 of this document.

The Company considers that it has made considerable progress with this process, and in particular announced that it had submitted its technical file to the notified body DEKRA, in July 2019. Taking into account, in particular, these advances and the quality of its clinical results (see section 1.4.2), CARMAT considers reasonable to consider obtaining the CE mark for its artificial heart by the end of 2020.

However, the artificial heart being a unique device, and the decision to issue the CE marking being in the hands of the notified body, and therefore not controlled by the Company, CARMAT cannot guarantee that the CE marking will be obtained within this timeframe, or will even be ulti- matly obtained.

In addition, the entry into force in May 2020 of the MDR (Medical Device Regulation), which replaces the MDD (Medical Device Directive) can potentially delay obtaining this marking.

2.3.7 Risk associated with obtaining PMA in the United States

Market access

Description of the risk

Potential impacts

risks

Risk that the Company will not obtain (or obtain later than expected) the PMA, i.e. authorization to market its

Risk associated with obtaining prosthesis in the United States. This may in particular

PMA in the United States be linked to clinical data deemed insufficient, and / or to a technical file and / or audits deemed insufficiently satisfactory.

Inability for CARMAT to market its prosthesis in the United States (or delayed marketing compared to forecasts) resulting in the absence of sales (or delayed or lower sales compared to forecasts) in this territory.

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risks factors

In order to be able to market its artificial heart in the United States, CARMAT must first obtain a PMA (Pre-Market Approval), issued by the American health authority (FDA: Food & Drug Administration). The process to obtain the PMA is described in Section 1.5.1 of this document.

In September 2019, the Company announced that it had obtained the « conditional approval » to start an EFS (Early Feasibility Study) in the United States, which is the first step in the process of obtaining a PMA. Given, in

particular, this progress, the quality of its clinical results (see section 1.4.2), and its discussions with the FDA, CAR- MAT considers it reasonable to consider, within a few years, obtaining PMA in the United States.

However, as the decision to issue the PMA is in the hands of the FDA, and the process for obtaining it is at any early stage, CARMAT cannot guarantee that the PMA will be obtained within this period, or even in the long term.

2.3.8Risk related to THE reimbursement OF THE

prosthesis on european markets

Market access

risks

Risk related to the reimburse-

ment of the prosthesis on

European markets

Description of the risk

Risk that despite having obtained the CE marking, CAR- MAT will not obtain reimbursement for its prosthesis in one or more of the targeted European markets, or even that the level of reimbursement obtained will be lower than forecasted by the Company.

Potential impacts

Prosthesis sales levels may be much lower than forecast on the markets considered, with a potential impact on the economic viability of the Company.

The Company's ability to generate turnover with its arti-

Given various parameters, including the quality of its cli-

ficial heart depends in part on the conditions of reimbur-

nical results (see section 1.4.2) and the reimbursement of

sement in the countries where it intends to market its

existing devices and therapies (see section 1.5.2), CAR-

products, since many patients will not be able to finance

MAT considers it reasonable to obtain reimbursement

by themself this relatively expensive therapy.

levels in line with its hypotheses, in the European coun-

tries targeted for the marketing of its prosthesis (it being

The CARMAT artificial heart will be, in terms of price, at

recalled that Europe is the first geographic area in which

the top of the range of all medical devices in Cardiology.

CARMAT intends to market its prosthesis, and will remain

The Company's ability to reach acceptable levels of reim-

so for a few years).

bursement from government authorities, private health

insurers and any other organization will therefore have an

However, the Company cannot be sure of obtaining

impact on its ability to successfully market its products.

and maintaining optimal reimbursement in all the Euro-

In Europe, the processes for obtaining reimbursement

pean countries concerned, in particular because there is

and support, as well as their levels are different in each

constant economic, regulatory and political pressure to

country.

limit healthcare costs.

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2.3.9Risk related to the reimbursement of the

prosthesis on the American market

Market access

Description of the risk

Potential impacts

risks

Risk related to the reimburse-

ment of the prosthesis on

the American market

Risk that despite having obtained the PMA from the FDA, CARMAT will not obtain reimbursement for its prosthesis in the United States, or that the level of reimbursement obtained is lower to the forecasts of the Company.

Prosthesis sales levels may be much lower than forecast on the American market, with a potential impact on the economic viability of the Company.

The Company's ability to generate turnover with its artificial heart depends in part on the conditions of reimbursement in the countries where it intends to market its products, since many patients will not be able to finance by themself this relatively expensive therapy.

The CARMAT artificial heart will be, in terms of price, at the top of the range of all medical devices in Cardiology. The Company's ability to reach acceptable levels of reimbursement from government authorities, private health insurers and any other organization will therefore have an impact on its ability to successfully market its products.

Given various parameters, including the quality of its clinical results (see section 1.4.2) and the reimbursement of existing devices and therapies, CARMAT considers it reasonable to obtain reimbursement and management levels in accordance with its hypotheses in the United States, which to date represents the largest target market for the marketing of its prosthesis.

However, the Company cannot be sure of obtaining and maintaining an optimal reimbursement in this country, in which CARMAT intends to start marketing its prosthesis in a few years.

2.3.10Organizational and non-compliance to

the regulatory environment risks

Human, organizational

and non-compliance to

Description of the risk

Potential impacts

the regulatory environ-

ment risks

Risk that the Company will fail to set-up or maintain an

Organizational and non-com- organization, processes and systems (including informa-

pliance to the regulatory tion systems) sufficiently adapted and robust to support

environment risks its objectives and growth, and meet legal and regulatory requirements.

CARMAT's difficulty in achieving some of its objectives on time, with a possible negative financial impact. Failure to meet all legal and regulatory obligations, which may result in the delay in achieving certain objectives (for example obtaining CE marking or PMA in the United States, or even impossibility for the Company to be listed on the desired market), and / or financial penalties.

The Company plans to grow significantly, and is gradually expanding its activities, initially limited to research and development and clinical trials, to production, marketing and marketing of its artificial heart. It is also increasing its geographic presence and intends to continue to do so both in terms of clinical trials and in terms of marketing.

It must therefore constantly adapt its structure, organi- zation, procedures and processes, as well as its systems, which is a challenge and can potentially mobilize significant resources. At the same time, the Company is subject to strong operational pressure, linked to the delivery of its objectives, and to a binding and constantly evolving legal and regulatory framework (regulatory obligations linked to obtaining CE marking and PMA in the United States, regulatory obligations related to conducting clinical trials,

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quality-related rules, obligations related to its status of

calls on external consultants and specialists to assist it

listed company, GPRD regulations, so-called « Transpa-

on those matters and implement appropriate measures.

rency » law in France, etc.).

However, it cannot be excluded that CARMAT, on an ad

hoc basis, will experience organizational defects and / or

The Company strives to meet all of these imperatives by

does not comply with all of its legal and regulatory obli-

implementing the appropriate resources and systems. It

gations, which could have an unfavorable effect on the

implements constant legal and regulatory monitoring and

achievement of its operational and financial objectives.

2.3.11risks

Human resources

Human, organizational

and non-compliance to

Description of the risk

Potential impacts

the regulatory environ-

ment risks

Risk that the Company will fail to hire or retain the critical human resources required to achieve its objectives. This can in particular result from the departure of people

Human resources risks deemed to be key or difficult to replace, and / or the difficulty of the Company in acquiring certain skills or levels of experience due to the characteristics of the Company (for example, 'start-up' considered potentially risky).

CARMAT's difficulty in achieving some of its objectives on time, with a possible negative financial impact.

CARMAT's success is largely based on the quality of its management and its teams, which means being able to attract and retain the appropriate talent and human resources. CARMAT believes that it takes the necessary actions (recruitment policy, salary policy, etc.) to be and remain an attractive employer. The Company also uses, as required and on a regular basis, of external resources (consultants in particular).

However, CARMAT competes in the acquisition and retention of its human resources, with a number of other com- panies, some with more means or potentially certain assets (career development possibilities or work environment for example) than cannot guarantee CARMAT. In addition, certain skills, particularly technical (in electronics and IT for example) are in tension on the job market.

Finally, given the size of the Company, certain skills are based on a very limited number of employees, sometimes even one.

In this context, it is possible that the Company may temporarily have issues on certain positions to attract or retain the human resources necessary to achieve its objectives.

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2.3.12IT, data and transaction risks

IT, data and

Description of the risk

Potential impacts

transaction risks

Risk of vulnerability of the information system to com-

IT, data and

puter attacks, risk of loss or theft of sensitive data, risk

transaction risks

of unauthorized transactions or operations (by people

internal or external to the Company).

Direct financial losses (in the case of fraud for example) or indirect (in the case of unauthorized use of sensitive research or production data). Potentially negative consequences on the reputation of the Company.

The Company is highly dependent on its information system to carry out its activities, and manages a large amount of data (data relating to its research and clinical trials, data relating to its intellectual property, financial data, etc.), some particularly sensitive, which are stored physically and / or electronically.

Access to the IT resources of the Company is given, depending on their needs, to employees, but also where appropriate, to external service providers or consultants working for the Company, some of them remotely (for exa- mple, foreign centers in which clinical trials are carried out).

The loss or theft of sensitive and / or confidential information for unauthorized purposes, the carrying out of unauthorized transactions, or even the corruption of information or systems rendering them unfit for use, temporarily or definitive, are all events likely to cause operational (for example temporary production stoppage) and financial (for example in the event of a fraudulent transaction) damage to CARMAT. The impact of such an event could also be accentuated by the media exposure of CARMAT, in particular if patient data were at stake.

The Company implements a security, access and protection policy for its systems and data, such as to limit the above risks.

However, an external computer attack or uncontrolled acts, carried out by internal or external people, cannot be totally excluded.

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3

financial informations

financial

informations

CARMAT

61

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financial informations

3.1

notes on activity in the

2019 reporting period

3.1.1

selected financial

Informations

Income statement (simplified)

12 months

12 months

12 months

(in thousands of euros)

2019

2018

2017

Net revenue

0

0

0

Other revenues

702

722

28

Operating expenses

-43,096

-43,489

-31,063

Operating result

-42,394

-42,766

-31,035

Financial result

-1,787

-945

-472

EARNINGS BEFORE INTEREST AND TAX

-44,181

-43,711

-31,507

Extraordinary result

-104

-2

-56

Research tax credit

1,636

1,984

2,335

PROFIT OR LOSS

-42,649

-41,729

-29,228

Cash flow statement (simplified)

12 months

12 months

12 months

(in thousands of euros)

2019

2018

2017

NET RESULT

-42,649

-41,729

-29,228

Self financing capacity

-40,028

-39,863

-27,227

Cash flow from operations

-40,245

-38,174

-24,279

Cash flow from investment operations

-636

-2,308

-3,709

Cash flow from financing operations

71,085

5,059

57,547

Change in cash and cash equivalents

30,204

-35,421

29,560

opening cash and cash equivalents

25,302

60,723

31,163

closing cash and cash equivalents

55,505

25,302

60,723

Change in the Company's activity in the course of the reporting period

CARMAT recorded no turnover during the year 2019, its artificial heart being still in clinical development.

The operating loss for the year amounted to €42.4 million, a slight improvement compared to the previous year (ope- rating loss of €42.8 million in 2018).

During 2019, CARMAT devoted the main part of its operating resources to:

  • studies and tests carried out as part of the process of obtaining CE marking on the one hand, and obtaining authorization to start a clinical study in the United States (EFS - early feasibility study) on the other hand ;
  • the improvement of the reliability of its production pro- cesses and the preparation of the ramp-up in the Bois d'Arcy production site;
  • the further transformation of the Company into an indus- trial and commercial company.

This translates into operating expenses of €43.1 million, slightly down by €0.4 million compared to the previous year, CARMAT having made a major effort to rationalize its expenses, especially in the second half of the year.

The financial result (€ -1.8 million), down by €0.8 million compared to 2018 is explained by the increase in loan inte- rest, the Company having proceeded at the end of January 2019 to draw the first tranche (i.e. €10 million) of the €30 million loan granted under conditions by the European Investment Bank (EIB) in December 2018.

After taking into account the exceptional result (€-0.1 million) and the research tax credit of €1.6 million, the net result for the 2019 financial year translates into a loss of €42.6 million, compared to a loss of €41.7 million in 2018.

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financial informations

Industrialization and production

Access to the United States market:

During the first half of 2019, CARMAT finalized the trans-

Following the filing done in 2018, CARMAT received in Sep-

fer of all its production activities to its new industrial site

tember 2019, in accordance with its roadmap, the autho-

in Bois d´Arcy.

rization (« conditional approval ») from the FDA (Food &

Drug Administration in the United States) to start an early

Following the analysis of the information gathered from

feasibility study (EFS) in the United States. The implan-

the experience accumulated during cohort 1 of the pivo-

tation of the first patient, as part of this study, is planned

tal clinical study, and the data recorded on test benches,

for 2020.

CARMAT proceeded to review its production processes,

with aim to strengthen the reliability of his prosthesis. This

The authorization to start this clinical trial in the United

analysis and the implementation of the changes decided

States is the first step in the process which could ultima-

following this review were accompanied by a shutdown

tely allow CARMAT to obtain authorization to market its

of production from October 2018 to May 2019. Production

prosthesis in the United States.

resumed on the site in May 2019.

Transformation into an industrial and commercial

From now on, all the prostheses produced will come enti-

company

rely from the Bois d'Arcy production site, and the Com-

pany will focus both on continuous improvement of its

In view of the commercial launch of its prosthesis in

processes, on securing its supplies and on ramping up its

Europe (CE marking) and the necessary ramp-up of its pro-

production with a view to marketing its artificial heart.

duction, CARMAT also continued in 2019 the adaptation

Clinical development and market access

of its organization and its information systems, and the

preparation of the commercial launch, while expanding its

teams as necessary.

Access to the European market:

Thus were recruited in 2019, a new Industrial Director,

Following the resumption of production at the Bois d'Arcy

Alexandre Eléonore, who joined the CARMAT management

site in May 2019, and the authorizations received during

committee in November; and a Director of IT Systems.

the third and fourth quarters to resume recruitments as

Governance

part of the pivotal study in Denmark, the Czech Republic

and Kazakhstan, CARMAT announced in December 2019

that it had implanted a twelfth patient in the context of this

Professor Alain Carpentier left his duties as Director of

study (10 for the first cohort of 10 patients, and 2 for the

CARMAT at the end of the General Meeting held on March

second cohort of 10 patients).

28, 2019. He was appointed Honorary President of the

Company, and as such continues to be involved in the life

The positive results of the first cohort of the pivotal clini-

of the Company and to attend meetings of the Board of

cal study, presented in January 2019, were confirmed and

Directors, without however taking part in the votes.

reinforced with the presentation in November 2019 of the

results of the study on the first 11 implanted patients.

In June 2019, Mr. Karl Hennessee, Senior Vice-President

of Airbus, replaced Ms. Anne-Pascale Guédon, as perma-

73% of these patients achieved the primary objective of

nent representative of Matra-Défense (Airbus Group) on

the study corresponding to 6 months of survival with the

the board of directors.

prosthesis or a successful heart transplant within 6 mon-

ths of implantation of the device. The data collected from

STRENGTHENED FINANCIAL STRUCTURE

patients confirm the biocompatibility of the prosthesis and

in particular its very good safety profile, never achieved

As of December 31, 2019, the Company's cash stood at

by other technologies, with in particular the absence of

€55.5 million compared to €25.3 million as of December

stroke, gastrointestinal bleeding and related infection to

31, 2018.

the percutaneous cable.

This significant strengthening of cash flow can be

In parallel, the Company confirmed

having submitted in

explained in particular by:

July 2019 to the notified body DEKRA, its CE marking tech-

- a fundraising of €60 million carried out in September

nical file.

2019 through a private placement;

- the draw, at the end of January 2019, of the first tranche

Obtaining the CE marking is necessary to allow the Com-

of €10 million of the EIB loan;

pany to market its prosthesis in Europe.

- obtaining in June 2019 the last tranche of the €1.5 million

BPI repayable advance;

- the use of the flexible Kepler Cheuvreux equity line for €2 million in 2019;

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financial informations

while the cash flow from operations and investments of the Company was negative by €41 million during the year, the Company not yet generating commercial income.

In addition, CARMAT also has at its disposal:

  • two tranches of EIB loans of €10 million each, which can be drawn down when certain technical stages are reached;
  • a drawdown possibility of €21.9 million until the end of September 2020, on the flexible Kepler Cheuvreux equity line contracted in September 2018.

Combined, and excluding the Kepler Cheuvreux equity line, all of these financial resources allow CARMAT to finance its activities, according to its business plan, until the third quarter of 2021.

In addition, the fundraising carried out in September 2019 enabled the entry into the capital of renowned entrepreneurial shareholders, in particular the family offices of the Gaspard family, owners of the Lyreco group (Corely Belgium SPRL and Bratya SPRL) and Mr. Pierre-Edouard Stérin, founder of Smartbox (BAD 21 SPRL), who have indicated their intention to support CARMAT in the long term. Historical shareholders have also renewed their confidence in the CARMAT project by participating in the fun- draising, in particular the Airbus Group, the family offices of Mr. Pierre Bastid (Lohas) and Dr. Ligresti (Santé Holdings SRL), as well as the Therabel Group.

Given these elements, the Company is confident in its ability to carry out the clinical development of its prosthesis and the preparation of the commercial phase.

3.1.2 Investisments made and envisaged

Principal investments made in the last three financial periods

Over the 2019 fiscal year, the Company made €0.7 million in investments, distributed as follows:

  • €701 k in tangible fixed assets,
  • €36 k of intangible assets.

Investments are down compared to the previous two years, which were marked by the establishment of the Bois d´Arcy production site.

In the 2018 fiscal year, the Company had recorded €2.3 million in capital expenditure including €2.2 million in

property, plant and equipment related to the installation of the Bois d´Arcy site and €0.1 million in intangible assets.

In 2017, the Company recorded €3.5 million in capital expenditure, including €2.8 million in fitting out the new production site at Bois d'Arcy.

principal ASSETS underway

Tangible fixed assets in progress at the end of the 2019 fiscal year amount to €0.6 million and will be used for production once activated.

Main investments envisaged

The main investments to come in the short term concern production equipment and tools to further streamline the production process and increase capacity.

3.1.3 PROGRESS MADE AND DIFFICULTIES ENCOUNTERED

DURING THE REPORTING PERIOD

Following the analysis of the information gathered from the experience accumulated during the cohort 1 of the pivotal study, and the data recorded on test benches, CARMAT proceeded to review its production processes, in order to strengthen the reliability of his prosthesis.

This analysis and the implementation of the changes decided following this review were accompanied by a shutdown of production from October 2018 to May 2019. Production resumed on the site in May 2019. From now on, all the prostheses produced come entirely from the Bois d'Arcy production site.

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3.1.4 ANTICIPATED DEVELOPMENTS, OUTLOOK

AND SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

CARMAT intends to continue to focus its efforts and resources on its strategic priorities:

- Finalization of the pivotal study with the short-term completion of recruitments for the second cohort of patients;

  • Obtaining CE marking in 2020;
  • The start of a feasibility study in the United States (EFS - early feasibility study), following the agreement received from the FDA (Food & Drug Administration) in September 2019;
  • Continuous improvement of its production processes;
  • The transformation of CARMAT into an industrial and commercial company, with a view to the commercial launch of the prosthesis by 2021.

Significant events after the end of the fiSCAL year

On February 5, 2020, CARMAT announced that it had received full approval from the FDA to launch its clinical feasibility study with its artificial heart in the United States and that the study population had been increased to 10 patients.

Main trends since the end of 2019 fiscal year

The Company does not have to report any significant change in its financial situation since December 31, 2019.

Profit forecasts or estimates

The Company does not intend to make any profit forecasts or estimates.

3.1.5 THE PAST FIVE PERIODS

FIVE PERIODS

STATEMENT OF RESULTS FOR

STATEMENT OF RESULTS FOR THE PAST

(in euros)

Dec. 31, 2019

Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015

Capital at the end of the periodShare capital

Number of existing ordinary shares

Maximum number of future shares to be created

  • by conversion of bonds
  • by exercise of subscription rights

Opérations and results

Revenue excluding VAT

Profit before tax, profit sharing, depreciation and amortization, and increases in provisions Corporation taxes

Profit sharing for the period

Profit after tax, profit sharing, depreciation and amortization and increases in provisions Distributed profit

Profit per share

Profit after tax and profit sharing, but before depreciation and provisions

Profit after tax, profit sharing, depreciation and amortization, and increases to provisions Dividend paid per share

Staff

Workforce at year end Wage bill for the period

Value of social benefits paid during the period

504,385.96

371,036.76

360,661.76

241,277.76

183,117.40

12,609,649

9,275,919

9,016,544

6,031,944

4,577,935

-

-

-

-

-

1,314,700

1,246,750

943,025

852,140

466,610

0

0

0

0

0

-43,339,319

-42,784,848

-30,020,856

-25,378,370

-20,229,406

1,636,019

1,983,916

2,334,690

2,817,116

3,148,534

-

-

-

-

-

-42,648,672

-41,729,066

-29,227,910

-22,980,178

-17,545,761

-

-

-

-

-

-3.31

-4.40

-3.07

-3.74

-3.73

-3.38

-4.50

-3.25

-3.81

-3.83

-

-

-

-

-

107

90

70

56

48

8,364,741

6,819,510

5,220,243

4,371,200

4,069,741

4,453,860

3,906,890

2,163,452

1,803,184

1,611,888

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financial informations

3.1.6 Proposed appropriation of the result

We propose approval of the annual financial statements (balance sheet, income statement and annex) as presented.

These financial statements show a net loss of €42,648,672.

We propose appropriation of this loss to Losses carried forward, taking the balance of that item from €-187,480,075 to €-230,128,747.

3.1.7 PARTICULARS OF DIVIDENDS

In accordance with the provisions of Article 243 of the General Tax Code, it is recalled that no distribution of dividends has taken place for the last three fiscal years.

There are no plans to adopt a policy of paying dividends in the short term, taking into account the Company's stage of development.

3.1.8 PROPERTY, PLANT AND EQUIPMENT

The Company carries out its activities on the premises of which it is a tenant at the end of leases concluded at prices and market conditions with companies which have no direct or indirect link with its managers. CARMAT does not own any property.

For the current fiscal year at the date of this universal registration document, the Company considers that it has suitable premises which should enable it to cope with the planned growth and its workforce.

Premises used by the Company as at December 31, 2019:

As a reminder, the transfer of production from the Vélizy site to the Bois d´Arcy site was finalized in 2019.

Environmental issues

As part of the search for non-thrombogenic materials *, CARMAT decided to follow an original path opened by the experience of biological valves of Professor Alain Carpen- tier, using chemically treated animal pericardium to make it inert and biologically stable, to avoid rejection by the human body.

Lessee

Address

Nature of

Surface area

Lease start

Lease expiry

premises

date

date

36, avenue de l'Europe

Immeuble l'Étendard

Business

January 31,

CARMAT SA

Energy III

1,053 m²

February 1, 2009

premises

2027

78140 Vélizy-Villacoublay

FRANCE

36, avenue de l'Europe

Immeuble l'Étendard

Business

September 30,

CARMAT SA

Energy III

595 m²

October 1, 2010

premises

2028

78140 Vélizy-Villacoublay

FRANCE

36, avenue de l'Europe

Immeuble l'Étendard

Business

March 31,

CARMAT SA

Energy III

595 m²

July 1, 2011

premises

2022

78140 Vélizy-Villacoublay

FRANCE

9, rue René Clair

Batiment G

Business

December 7,

December 6,

CARMAT SA

Sis parc Spirit Meliers III

1 558 m²

premises

2017

2027

78390 Bois d'Arcy

FRANCE

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In the design and manufacture of the bioprosthetic artifi-

CARMAT entrusts two specialized subcontractors with

cial heart, the Company is therefore subject to chemical

waste management, including the traceability of the

and biological risks. CARMAT therefore implements pre-

materials treated. In addition, a risk analysis is updated

vention and protection measures for its teams and to effi-

annually. Each risk situation is assessed according to

ciently manage waste in accordance with the regulations

quantified criteria of occurrence and severity, which gives

in force. CARMAT considers that it complies with these

rise to the implementation of appropriate prevention mea-

regulations, taking into account the use, storage, hand-

sures. Specific training is given to those exposed.

ling and disposal of hazardous materials.

particulars of payment

particulars of trade receivables

3.1.9 periods

payment periods

Particulars of supplier payment

Non applicable.

periods

In accordance with the provisions of Articles L.441-6-1 and

D. 441-4 of the French Commercial Code, we bring your

attention to the following details concerning supplier pay-

ment periods:

As at December 31, 2019, trade accounts payable totaled

€2,376,881. A comparison of the figures from the financial

statements is set out below:

(in euros)

December 31, 2019

December 31, 2018

Trade accounts payable and related payables shown under liabilities

5,345,899

7,615,547

Less: amounts receivable from suppliers shown under assets in balance sheet

0

0

Less: accrued charges included under this heading

-2,969,018

-4,334,470

Liabilities related to fixed assets and similar liabilities

0

0

Less: accrued charges included under this heading

0

0

TOTAL

2,376,881

3,281,077

The breakdown of this amount by maturity date is shown

below, based on the payment terms negotiated with

suppliers:

(in euros)

December 31, 2019

December 31, 2018

Due (including amounts receivable from suppliers)

316,519

404,414

Falling due on January 31

2,060,363

2,876,663

Falling due on February 28

0

0

Falling due on or after March 31

0

0

Detail of debts due at the end of the financial year:

Article D.441 I.-1 °: Invoices received not settled on the closing date of the financial year whose term has expired

(in euros)

0 day

1 to 30 days

31 to 60 days

61 to 90 days

> 90 days

Total

(A) Late payment part

Number of invoices concerned

50

Total amount of invoices concerned

170,625

0

0

0

0

0

(includ. VAT)

Percentage of the total amount of

0.50%

0

0

0

0

0

purchases for the year (includ. VAT)

(B) Invoices excluded from (A) relating to disputed

Number of invoices concerned

1 invoice for an amount of €145,894 includ. VAT

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3.1.10 IMPORTANT CONTRACTS

The important contracts to which the Company is a party are as follows:

  • a royalties agreement signed on June 24, 2008 and amended on February 5, 2010, between CARMAT, Pro- fessor Alain Carpentier and Matra Défense (an Air- bus Group subsidiary): please refer to Paragraph 5.6 « Regulated agreements »;
  • an exclusive license agreement with the Pierre and Marie Curie University relating to patent no 8800381: please refer to Paragraph 1.5.4 « Innovation and mana- gement of the R&D »;
  • an agreement with Edwards Lifesciences for an initial period of one year, renewable automatically each year, concluded in the 4th quarter of 2010 between CARMAT and Edwards Lifesciences, world leader in the segment of heart valves and in hemodynamic monitoring, for the use and the supply of Carpentier-Edwards biolo- gical heart valves in the CARMAT bioprosthetic artifi- cial heart project;
  • a 12-year agreement with Invibio Limited concluded in the 3rd quarter of 2012 between CARMAT and Invi- bio Limited for the supply and use of PEEK-OP-TIMA® polymeric material. This material is used by CARMAT for its biocompatibility characteristics, certified long-las- ting implantable, and for its mechanical properties. The structural subsets of the prosthesis are machined from this material ;
  • a framework aid agreement for the CARMAT Indus- trial Strategic Innovation (ISI) project and an agree- ment in support of the CARMAT project entered into on July 24, 2009 for a total sum granted by Bpifrance of €33 million ;
  • a non-dilutive financing agreement concluded in December 2018 with the European Investment Bank for an amount of €30.0 million.

These last two contracts are detailed below:

Framework agreement with

Bpifrance

Initial conditions of the agreement

On July 24, 2009, the Company signed a framework agreement with Bpifrance to secure aid for the CARMAT Strategic Innovation (ISI) project. Under the terms of the agreement, Bpifrance undertook to pay a total amount of €33.0 million, of which €18.5 million as subsidies and €14.5 million as refundable advances, payable upon achievement of the key milestones set out in the agreement.

The Company acts as project leader, thus receiving all of the refundable advances and €17.4 million in subsidies, i.e. €31.9 million, the remaining €1.1 million to be paid to the four partners in the project: Dedienne Santé, PaxiTech, Vignal Artru Industries (Pack'Aero Group) and Iréis (for- merly HEF R&D).

Under the Bpifrance Innovation framework agreement, each of the partners has undertaken to provide the resources necessary to complete the development project for the bioprosthetic artificial heart and its components. In return, Bpifrance will pay its subsidies and repayable advances as certain phases and milestones described below are executed.

Accounting and financial conditions

The subsidies accrue to the Company as of right and so will not be repayable in the event of success of the project.

Accordingly, they are accounted for in the « Subsidies » line of the income statement.

Repayable advances will have to be repaid by CARMAT according to the arrangement set out in the paragraphs below. Repayable advances are therefore accounted for on the liabilities side of the balance sheet under the « Other equity - Conditional advances » line.

The corresponding interest is shown on the liabilities side of the balance sheet under the « Sundry loans and financial debts » line.

By addendum to initial contract, signed in September 16, 2013, the Parties agreed to calculate the amount of the financial returns due by CARMAT based on thresholds of revenue generated by the products and services created by the project (reference products and services).

Threshold S1 (cumulative sales of reference products and services) is set at €38 million.

Threshold S2 (cumulative sales of reference products and services) is set at €2 billion.

If threshold S1 (as defined above) is reached, CARMAT will pay Bpifrance the following flat fees by June 30 of each year following the reference year:

Year 1 by June 30

€184,000

Year 2 by June 30

€368,000

Year 3 by June 30

€1,472,000

Year 4 by June 30

€2,784,000

Year 5 by June 30

€8,316,000

Year 6 by June 30

€11,300,000

The amounts will be reimbursed as indicated above, based on CARMAT's operating income from the project's pro- ducts, in light of the annual income statement.

Should threshold S1 not be reached, CARMAT will not pay Bpifrance the amounts above.

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From year 2 and for the remaining years, in case of a fall in sales exceeding 20% of the updated forecasts (in 2013), as defined in the amendment signed in September 2013, these amounts would be then capped.

In this scenario, CARMAT will generate new forecasts allowing it to draw up a new timetable for the reimbursements to Bpifrance.

Should sales of the reference products and services be in excess of the forecasts, the flat fees defined above will not be affected.

In any case, in the event that no reimbursement is due pursuant to this Article over a period of 10 years from payment of the last subsidy as set out in the agreement providing for a repayable advance, CARMAT will be released from any obligation to pay financial returns. Moreover, this agreement will be terminated ipso jure with no other for- malities, provided that CARMAT has complied with all its obligations. CARMAT will be bound to pay specific fees as defined above, should threshold S1 be reached before this date, and until said date is reached.

If the advance payment has been reimbursed in accordance with the provisions above, CARMAT will pay Bpifrance during the year after the date said reimbursement is completed and provided sales of the reference products and services (excluding taxes) have reached at least €2 billion, 2.5% of the yearly revenue generated the previous year by sales of the Project's products and services.

The corresponding amounts will be payable on any generated sales, subject to a maximum financial return of €50 million at nominal value, if achieved before the end of 8 years.

Amounts received and still to be received at December 31,2019

The Bpifrance agreements provides for the payment of a total of €17.4 million in grants, all of which was received at the end of the 2019 financial year.

It also provides for the payment of a total sum of €14.5 million for repayable advances, all of which were received at the end of 2019 (the last €1.5 million due having been paid in June 2019).

EUROPEAN INVESTMENT BANK (EIB) FINANCING AGREEMENT

The financing agreement signed with the EIB allows CAR- MAT to borrow up to €30 million via three tranches of €10 million each.

Within the context of the positive interim results of the first part of the pivotal study, published by CARMAT on January 15, 2019 the Company carried out the drawdown on the first tranche of the EIB loan, i.e. €10 million, on January 31, 2019.

The drawdowns on the second and third tranches are subject to certain technical and financial milestones, including the successful execution of clinical trials and/or the raising of additional funds.

The amounts borrowed bear an average fixed interest rate of 8% for the first tranche, 8% for the second tranche and 5% for the third tranche. The reimbursement of each tranche will take place at the end of the loan period (bul- let payment), i.e. five years from the date of the drawdown on this specific tranche.

The loan contract provides for certain information and operational commitments (such as limits on authorized debt, approval for external growth operations, etc.). Failure to comply with these conditions would give the EIB the right, if deemed necessary, to demand an early reimbursement of the loan.

The occurrence of certain changes in the shareholding structure or a change in management not approved beforehand by the EIB would also allow the latter, if deemed necessary following discussions with the Company, to demand an early reimbursement of the loan.

The loan is not secured. Any new Group subsidiary becoming material with respect to the financial contract would be personally liable for the Company. To date, CARMAT has no subsidiaries.

Furthermore, the Company has signed a royalty agreement with the EIB that provides for the payment to the latter of additional remuneration depending on the commercial performance of the Company. This agreement is valid for 13 years from the year during which the cumulative sales of CARMAT reach €500,000. The Company can decide to terminate the royalties contract at any time by paying a lump sum (net of any royalties already paid), which depends on the amount borrowed and the year during which the decision is taken.

Upon the occurrence of certain events (in particular should the EIB demand the early repayment of the loan or should a new shareholder reach 33% of the voting rights of CARMAT), the EIB could, if deemed necessary, demand from CARMAT an advance payment of royalties up to a certain percentage of the amount of the loan effectively used (this percentage would range from 100% of the borrowed amount if the event occurs during the first four years of the financial contract to 160% if the event occurs after the eleventh year).

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financial informations

Financial statements as

3.2at december 31, 2019

2019 annual

3.2.1 statements

income statement

Income statement

December 31,

December 31,

2019

2018

(in euros)

France

Export

Total

Total

OPERATING INCOME

Sales of merchandise

Sales of finished

goods

Sales of finished services

NET REVENUE

Production left in stock

Fixed asset production

Subsidies (note 3.2.2.5)

14,000

14,000

Write-backs of amortization/depreciation and provisions, and transfers of expenditure

688,472

708,481

Other revenues

TOTAL OPERATING INCOME (I)

702,472

722,481

OPERATING EXPENSES

Purchases of merchandise

Change in inventory (merchandise)

Purchases of raw materials and other supplies

7,397,143

6,523,753

Change in inventory (raw materials and other supplies)

Other purchases and external expenditure

20,901,665

24,148,661

Taxes, fees and similar payments

365,293

372,399

Wages and salaries

8,364,741

6,819,510

Social security costs

4,453,860

3,906,890

Amortization/depreciation and impairments

- of fixed assets: amortization/depreciation (note 3.2.2.4)

1,163,537

919,829

- of fixed assets: impairments

- of current assets: impairments

Provisions (note 3.2.2.4)

382,592

716,786

Other expenses

67,452

81,059

TOTAL OPERATING EXPENSES (II)

43,096,284

43,488,886

1 - OPERATING RESULT (I - II)

-42,393,812

-42,766,405

SHARES IN RESULTS OF JOINT OPERATIONS

Profits allocated or loss transferred (III)

Loss or profit transferred (IV)

FINANCIAL INCOME

Financial income from equity interests

Income from other securities and fixed asset receivables

Other interest receivable and similar income

Write-backs of impairments and provisions, transfers of expenditure

Positive exchange differences

40,786

41,149

Net proceeds from sales of marketable securities

TOTAL (V)

40,786

41,149

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Income statement

December 31,

December 31,

2019

2018

(in euros)

France

Export

Total

Total

FINANCIAL EXPENSES

Amortization/depreciation, impairments and provisions

Interest expenses and similar charges

1,782,149

937,512

Negative exchange differences

45,572

48,425

Net expenses from sales of marketable securities

TOTAL (VI)

1,827,721

985,937

2 - FINANCIAL RESULT (V-VI)

-1,786,935

-944,788

3 - EARNINGS BEFORE INTEREST AND TAX (I-II+III-IV+V-VI)

-44,180,747

-43,711,193

EXTRAORDINARY INCOME (NOTE 3.2.2.5)

Extraordinary income from management operations

Extraordinary income from capital operations

46,794

60,198

Write-backs of impairments and provisions, transfers of expenditure

TOTAL (VII)

46,794

60,198

EXTRAORDINARY EXPENSES (NOTE 3.2.2.5)

Extraordinary expenses from management operations

2,513

3,424

Extraordinary expenses from capital operations

60,767

58,564

Amortization/depreciation, impairments and provisions

87,458

TOTAL (VIII)

150,738

61,987

4 - EXTRAORDINARY RESULT (VII-VIII)

-103,944

-1,789

Employee profit-sharing (IX)

Income taxes (X) (note 3.2.2.5)

-1,636,019

-1,983,916

TOTAL INCOME (I+III+V+VII)

790,052

823,829

TOTAL EXPENSES (II+IV+VI+VIII+IX+X)

43,438,724

42,552,895

5 - LOSS (total income - total expenses)

-42,648,672

-41,729,066

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financial informations

Balance sheet

December 31,

December 31,

Assets

2019

2018

(in euros)

Amortiza-

Gross

tion and

Net

Net

depreciation

UNCALLED SHARE CAPITAL (TOTAL I)

Fixed assets

Intangible fixed assets (note 3.2.2.4)

- Start-up costs

- Development costs

- Licenses, patents and similar rights

2,014,253

1,986,534

27,718

89,777

  • Goodwill *
  • Assets under construction
  • Advances and payments on account Property, plant and equipment (note 3.2.2.4)
  • Land
  • Buildings

- Technical plant, equipment and tooling

9,670,507

6,590,283

3,080,224

2,327,214

- Other property, plant and equipment

2,810,222

1,394,484

1,415,737

1,629,202

- Assets under construction

614,209

614,209

1,606,508

  • Advances and payments on account Financial assets ** (note 3.2.2.4)
  • Holdings accounted for on an equity basis
  • Other holdings
  • Other equity investments
  • Loans

- Other financial assets

473,503

473,503

485,877

TOTAL II

15,582,693

9,971,301

5,611,392

6,138,578

Current assets

Stocks and work in progress

- Raw materials, supplies

- Work in progress - goods

- Work in progress - services

- Semi-finished and finished products

- Merchandise

Advances and prepayments on orders

494,132

494,132

375,721

Debtors ***

- Trade accounts receivable

- Other accounts receivable (note 3.2.2.4)

2,943,016

2,943,016

4,579,872

- Subscribed capital - called, not paid up

Marketable securities

Cash instruments

Cash

55,505,492

55,505,492

25,301,658

Deferred charges *** (note 3.2.2.4)

121,610

121,610

433,318

TOTAL III

59,064,250

59,064,250

30,690,569

ADJUSTMENT ACCOUNTS

Bond issuance costs to be amortized (IV)

Bond redemption premiums (V)

Unrealized foreign exchange losses (VI)

GRAND TOTAL (I+II+III+IV+V+VI)

74,646,944

9,971,301

64,675,643

36,829,147

*

including lease rights.

**

of which less than one year.

127,386

141,359

  • of which more than one year.

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financial informations

Liabilities

December 31,

December 31,

2019

2018

(in euros)

EQUITY (notes 3.2.2.3 and 3.2.2.4)

Capital (of which, paid in: 504,386)

504,386

371,037

Issue, merger and acquisition premiums

254,053,133

194,560,697

Excess of restated assets

Reserves

- Legal reserve

- Statutory or contractual reserves

- Regulatory reserves

- Other reserves

38,476

29,840

Losses brought forward

-187,480,075

-145,751,009

Result for the period (profit or loss)

-42,648,672

-41,729,066

Capital grants

Regulatory provisions

TOTAL 1

24,467,248

7,481,498

OTHER EQUITY

Proceeds of issues of participating stock

Conditional advances (note 3.2.2.6)

14,507,309

13,056,577

TOTAL II

14,507,309

13,056,577

PROVISIONS

Provisions for risks

Provisions for charges (notes 3.2.2.4 and 3.2.2.5)

685,560

991,440

TOTAL III

685,560

991,440

DEBTS *

Financial debts

- Convertible bonds

- Other bonds

- Loans from credit institutions

10,733,333

- Bank overdrafts

- Sundry loans and financial debts (note 3.2.2.4)

5,681,519

4,651,634

Advances and payments on account received for current orders

Accounts payable (note 3.2.2.4)

- Trade accounts payable and related payables

5,345,899

7,615,547

- Tax and social liabilities

3,254,774

2,985,907

Liabilities secured to property and related liabilities

Other debts

46,544

ADJUSTMENT ACCOUNTS

Deferred income *

TOTAL IV

25,015,525

15,299,631

Unrealized foreign exchange gains

TOTAL V

-

-

GRAND TOTAL (I+II+III+IV+V)

64,675,643

36,829,147

*

debts and deferred income of less than one year.

8,600,673

10,647,998

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financial informations

cash flow statement

December 31,

December 31,

Cash flow statement

2019

2018

(in euros)

Net result

-42,648,672

-41,729,066

Amortization/depreciation and provisions

1,546,129

1,636,615

Write-backs of amortization/depreciation and provisions

-688,472

-708,481

Gains or losses on asset sales

Investment subsidies transferred to income

Other income and expenses with no impact on cash flow

1,763,219

937,484

SELF-FINANCING CAPACITY

-40,027,796

-39,863,448

Tax and social liabilities

268,867

866,933

Trade accounts payable

-2,269,648

1,790,159

Other debts

-46,544

46,544

Deferred income

Stocks and work in progress

Advances and prepayments on orders

-118,411

-194,015

Other accounts receivable

1,636,856

-754,231

Trade receivables

Deferred charges

311,708

-65,826

CHANGES IN CASH POSITION (CHANGE IN WORKING CAPITAL)

-217,172

1,689,564

CASH FLOW FROM OPERATIONS

-40,244,968

-38,173,884

Acquisition of property, plant and equipment

-613,158

-2,176,599

Acquisition of intangible fixed assets

-35,568

-116,780

Acquisition of financial

fixed assets

12,374

-13,335

Proceeds from financial

fixed asset disposals

CASH FLOW FROM INVESTMENT OPERATIONS

-636,352

-2,306,714

Increase in capital

133,349

10,375

ORA/BSA

Issue premium and reserves

59,501,072

5,048,893

Capitalization of current accounts

Loans and conditional advances

11,450,732

CASH FLOW FROM FINANCING OPERATIONS

71,085,154

5,059,268

CHANGE IN CASH AND CASH EQUIVALENTS

30,203,834

-35,421,330

OPENING CASH AND CASH EQUIVALENTS

25,301,658

60,722,988

CLOSING CASH AND CASH EQUIVALENTS

55,505,492

25,301,658

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3.2.2Annex to the financial statements

Annex to the balance sheet for the year ended December 31, 2019, totaling €64,675,643, and to the income statement for the year ended December 31, 2019, presented in list form and showing zero revenue resulting in a loss of €42,648,672.

The financial year commenced on January 1, 2019 and ended on December 31, 2019, a duration of 12 months which is identical to that of the comparative period.

The notes and tables presented in the following are an integral part of the financial statements for the period ended on December 31, 2019 as approved by the board of directors on February 10, 2020. They are presented in euros unless otherwise stated.

3.2.2.1 Features of the fiscal year

The Company's activity is devoted to the development of an artificial heart that responds to the challenges of terminal heart failure. The product is currently in the pivotal study phase.

During the year, the Company raised funds decided by the Board of Directors on September 18, 2019 on delegation of authority from the combined general meeting of March 28, 2019. This transaction resulted in a capital increase of €126,316, with a gross issue premium of €59,873,689, for a total amount of issue proceeds of €60,000,005.

This capital increase led to the creation of 3,157,895 new ordinary shares, with a nominal value of €0.04. Taking into account the costs related to the capital increase, in the amount of €3,044,708, which are deducted from the share premium in application of the preferential accounting method, the net amount of the share premium of this capital increase is €56,828,981 (or €56,955,297 including the capital increase).

As part of the equity line contract concluded with Kepler Cheuvreux in September 2018, fourteen subscriptions were made between January and December for a total of 105,000 BSA, allowing the capital to be increased by €4,200, by issue of 105,000 ordinary shares with a par value of €0.04, issued at an average unit price of €21.46, with an issue premium of a gross amount of €2,269,980. Taking into account the costs related to the capital increase, amounting to €43,035, which are deducted from the share premium in accordance with the preferential accounting method, the net amount of the share premium for this capital increase is €2,226,945 (or €2,231,145

including the capital increase).

Fifteen BCE exercises were carried out between January and December for a total of 1,245 BCE 2009-2, making it possible to increase the capital by an amount of €1,245, by issuing 31,125 ordinary shares with a par value of €0.04, issued at a unit price of €8.00, or with an issue premium of €7.96 per share.

A exercise of 904 BSA was carried out on June 10, 2019, making it possible to increase the capital by an amount of €904, by issuing 22,600 ordinary shares with a nominal value of €0.04, issued at a unit price of €8.00, or with an issue premium of €7.96 per share.

Three capital increases totaling €684.40 were noted between January and December, as a result of the final allocation of 17,110 AGAP which had provisionally been allocated in 2018.

All of the capital increases carried out during the fiscal year made it possible to increase the share capital by an amount of €133,349, by creating 3,333,730 new ordinary shares. The share capital of the company was thus increased from €371,037 to €504,386. The total amount of issue premiums was increased from €194,560,697 to €254,053,133.

The Company proceeded at the end of January 2019 to draw the first tranche of €10 million from the loan granted under conditions by the EIB (European Investment Bank) in December 2018. This loan for a total amount of €30 million consists of three tranches of €10 million, two of which therefore remain to be drawn provided that the technical and financial conditions provided for are met.

The Company received, on June 28, 2019, a total amount of €1,450,732.07 from BPI France, as a repayable advance, recognized on the « Conditional advances » line of liabilities on the balance sheet.

The Company maintains the option for the Research Tax Credit for the year 2019. The first option was exercised for the calendar year 2009 and renewed each year until 2019. The Research Tax Credit relating to the year 2019 has been recorded for €1,636,019 on the « Income tax » line in the

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income statement (details in note 3.2.2.5 of this appen- dix) and appears on the « other receivables » line of the balance sheet.

The status of the project and the significant activities of the Company are detailed in section 3.1 « Notes on activity in the 2019 reporting period » of this document.

3.2.2.2 Significant events after the end of the reporting period

No event occurring after the end of the financial year is liable to alter the presentation or the valuation of the accounts as decided by the Board of Directors.

3.2.2.3 Accounting rules and methods

The valuation methods for this period have not been changed from those used in the previous financial year.

General principles and conventions

The accounts for the period have been prepared and presented in accordance with the accounting regulations and the principles laid down in Articles 120-1 et seq. of the General Chart of Accounts.

The basic valuation method for the items shown in the accounts is that of historical cost.

The accounting conventions have been applied in accordance with the provisions of the French Commercial Code, the Accounting Decree of November 29, 1983 and the CRC regulations concerning the redrafting of the General Accounting Plan applicable as at the end of the period.

The general accounting conventions have been applied in accordance with the prudent person rule, on the basis of the following assumptions:

  • the business is a going concern;
  • the accounting methods are consistent from one year to the next;
  • there is a clear cut-off between accounting periods.

The board of directors has assumed that the business is a going concern, having taken the following points in particular into account:

  • the level of cash and cash equivalents available as of December 31, 2019, for a total amount of €55.5 million;
  • the possibility of using the flexible equity financing set up in September 2018 with Kepler Cheuvreux, whose balance at December 31, 2019 is equal to €21.9 million;
  • the obtaining non-dilutive financing from the Euro- pean Investment Bank (EIB) granted under conditions on December 17, 2018, and of which the amount remaining to be drawn on December 31, 2019 amounts to €20.0 million.

The Company's clinical, industrial and commercial deve- lopment, even beyond obtaining the CE marking, will generate additional financial needs: financing of current operations, continuation of R&D efforts, commercial launch, clinical studies to United States, the working capital requirement linked to the development of sales and investments (especially in production). The Company believes, to date, that these additional needs could exceed €100 million. Fundraising will therefore be necessary beyond the use of the available balance of the Kepler equity financing lines and the EIB loan.

Supplementary information

  • Applied research and development costs

Research and development costs are accounted for as expenses in the year in which they are incurred.

  • Intangible fixed assets

Patents, licenses and other intangible fixed assets have been valued at their cost of acquisition, excluding the expenses incurred in acquiring them.

The methods and periods of amortization used are as follows:

Category

Mode

Term

Straight line

1 to 3 years

Licenses and software

Patents

Straight line

15 years

  • Property, plant and equipment

The gross value of property, plant and equipment corresponds to their initial book value, inclusive of any expenditure required to render the items usable but excluding costs incurred in their acquisition.

The methods and periods of depreciation used are as follows:

Category

Mode

Term

Straight line

9 to 10 years

Fixtures and fittings

Technical plant

Straight line

3 to 10 years

Equipment and tooling

Straight line

2 to 6 years

Furniture

Straight line

8 years

IT equipment

Straight line

3 years

  • Financial assets

OTHER SECURITIES CLASSIFIED AS FIXED ASSETS

In 2010, the Company entered into a liquidity contract, the purpose of which is to improve the liquidity of transactions and regularize the CARMAT share price, without impeding the normal operation of the market and without misleading

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third parties. To this end the Company made an amount of €300,000 available.

On May 19, 2016, the Company transferred the liquidity contract to Gilbert Dupont for a period of 12 months, renewable by tacit agreement.

Treasury shares acquired through the implementation of this liquidity agreement are recorded under financial assets at their purchase price. If necessary, a depreciation is made for impairments based on the average official stock market price for the final month prior to the end of the reporting period.

OTHER FINANCIAL ASSETS

These comprise:

  • guarantee deposits paid, which are shown at face value; and
  • the unused balance of sums made available under the liquidity agreement for the acquisition of own shares.
  • Receivables and liabilities

Receivables and payables are shown at face value. If necessary, impairments are recorded against receivables to take account of difficulties with recovery that are likely to occur. Any provisions for impairments are determined by comparison between the acquisition value and the likely realization value.

Receivables and payables in foreign currencies are converted into euros on the basis of the exchange rate at the date of the invoice.

  • Stocks

The equipment in stock is not valued at the end of the financial year as these are intended to be integrated into the prostheses used for the pivotal study, their net realizable value is therefore nil.

  • Cash in euros

Cash on hand or at bank is recorded at face value.

  • Cash in foreign currencies
  • Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents are defined as being the sum of the

  • Cash instruments » and « Cash on hand » items under the assets, less the current bank overdraft liability item, to the extent that cash instruments are available in the very short term and do not present a risk of a loss in value in the event of a change in interest rate. An analysis of cash according to this definition is provided at the foot of the cash flow statement.
  • Repayable advances made by public bodies

Advances received from public bodies to finance the research activities of the Company and which are subject to repayment are shown under liabilities under « Other equity - Conditional advances ». The corresponding interest is shown in balance sheet liabilities under Sundry loans and financial debts.

  • Operating subsidies

Subsidies are recorded as soon as the corresponding receivable becomes certain, taking account of the conditions set at the time the subsidy was granted. Subsidies are recorded under income taking account, if necessary, of the corresponding rate of expenditure in order to adhere to the principle of matching of expenses with revenue.

  • Retirement indemnities

Future payments for benefits to members of staff are valued according to an actuarial method based on assumptions concerning changes in salaries, retirement age and mortality; the resulting valuations are then discounted to their present value. These commitments are the subject of provisions in the balance sheet liabilities.

  • Sub-contractingexpenses

The progress of third-partysub-contract agreements for certain research services is assessed at the end of each reporting period in order to allow the cost of services already rendered to be recorded under accrued charges.

  • Share issue costs

Cash in foreign currencies is converted to euros at the exchange rate ruling on the balance sheet date. Gains and losses on conversion are recognized immediately in the profit or loss for the period as exchange gains and losses.

  • Cash instruments

In application of the reference method (ANC 2018-01), share issue costs are recorded in the balance sheet as deductions from the issue premium.

These comprise time deposit accounts, shown under assets at their acquisition cost, plus accrued interest at the closing date of the reporting period.

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3.2.2.4 Supplementary information on the balance sheet

  • Schedule of fixed assets

(in euros)

Gross value at

Additions

Line to line

start of period

Acquisitions

transfers

Licenses, patents and similar rights *

1,978,684

35,568

Assets under construction

TOTAL

1,978,684

35,568

Technical plant, equipment and industrial tooling **

8,068,236

1,199,230

490,499

General plant, sundry fixtures and fittings

2,430,861

Office and IT equipment, furniture

376,175

3,185

Assets under construction

1,606,508

245,684

TOTAL

12,481,781

1,202,415

736,183

Other financial fixed assets ***

485,876

2,515,417

TOTAL

485,876

2,515,417

GRAND TOTAL

14,946,342

1,237,983

3,251,600

(in euros)

Reductions

Gross value

Revaluation of

Line to line

Disposals

at end of

original value at

period

end of period

transfers

Licenses, patents and similar rights *

2,014,252

Assets under construction

TOTAL

2,014,252

Technical plant, equipment and industrial tooling **

87,458

9,670,508

General plant, sundry fixtures and fittings

2,430,861

Office and IT equipment, furniture

379,360

Assets under construction

1,237,983

614,209

TOTAL

1,237,983

87,458

13,094,938

Other financial fixed assets ***

2,527,791

473,503

TOTAL

2,527,791

473,503

GRAND TOTAL

1,237,983

2,615,248

15,582,693

  • This item includes a sum of €411,284, accounted for as the share of the contribution in kind made on September 30, 2008, with a total value of €960,000, relating to the contribution of patents.
  • This item includes the commissioning of the clean room at a total cost of €943,582. The item also includes a sum of €548,716 representing the proportion of the contribution in kind of €960,000 made on September 30, 2008 that related to the contribution of equipment and tooling.
  • This item includes the 4,170 own shares held in connection with the liquidity contract, valued at €74,201, and (i) the liquidities not invested in own shares as at the end of the period under the liquidity contract of €53,185 and (ii) guarantee deposits of €346,117, mainly comprising deposits under premises lease contracts.

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  • Schedule of depreciation and amortization

Statements and movements for the period

Value at start

Allowances

Reductions

Value at end

(in euros)

of period

for the period

Write-backs

of period

Licenses, patents and similar rights

1,888,907

97,627

1,986,534

TOTAL

1,888,907

97,627

1,986,534

Technical plant, equipment and industrial tooling

5,741,430

849,261

6,590,691

General plant, sundry fixtures and fittings

855,287

200,839

1,056,126

Office and IT equipment, furniture

322,140

15,811

337,950

TOTAL

6,918,857

1,065,910

7,984,767

GRAND TOTAL

8,807,764

1,163,537

9,971,301

Schedule of provisions

Provisions

Value

Increases

Reductions

Reductions

Value at end

at start

Amounts

Amounts not

(in euros)

of period

Allowances

used

used

of period

Sundry risks

Pensions and similar commitments *

302,968

110,938

413,906

Social charges on free preferential shares **

688,472

271,654

688,472

271,654

TOTAL

991,440

382,592

688,472

685,560

Impairment of other equity investments

TOTAL

0

0

0

0

GRAND TOTAL

991,440

382,592

688,472

685,560

Including operational allowances and write-backs

382,592

688,472

Including financial allowances and write-backs

  • See note 3.2.2.6
  • See note at the end of section 3.2.2.4
    • Schedule of maturities of receivables and liabilities

Schedule of receivables

Gross amount

Up to 1 year

More than

(in euros)

1 year

Staff and related accounts

5,132

5,132

Social security and other social bodies

32,380

32,380

Income taxes *

1,715,376

1,715,376

Value added tax

1,110,898

1,110,898

Sundry debtors

78,730

78,730

TOTAL

2,943,016

2,943,016

*

The receivable corresponds to:

  • the CIR for the year 2019 for an amount of €1,636,019;
  • the balance on the CIR for the year 2018 for an amount of 79,357 euros (collective deduction of 4% collected by Predirec as part of the CIR 2018 mobilization)

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Schedule of liabilities

Gross

Up to 1 year

1 to 5 years

More than

(in euros)

amount

5 years

Loans from credit institutions *

10,733,333

10,733,333

Sundry loans and financial debts **

5,681,519

5,681,519

Accounts payable

5,345,899

5,345,899

Staff and related accounts

1,707,234

1,707,234

Social security and other social organizations

1,412,384

1,412,384

Value added tax

31,717

31,717

Other taxes, charges and similar

102,939

102,939

TOTAL

25,015,525

8,600,673

16,414,852

  • Loan from the European Investment Bank (EIB): the EIB loan contract provides for certain information and operational commitments (such as limitations on authorized debt, authorized external growth operations, transfers of assets etc), the non-compliance of which would allow the EIB, if it deemed it necessary, to declare the early payment of the credit. The occurrence of certain changes in shareholders and in a change of management not approved in advance by the EIB, would also allow the EIB if it deemed it necessary and after discussion with the Company, to declare the early payment of the credit. To date, CARMAT complies with all of the commitments required by the EIB.
  • This amount corresponds to the accrued interest expected at year-end on the repayable advances from Bpifrance (details in 3.2.2.6).

Capital

Composition of the share capital

Categories of

Nominal

Number of shares

value in

shares

Opening

Created

Redeemed

Closing

euros

Ordinary shares

0.04

9,275,919

3,316,620

12,592,539

Preferential shares

0.04

17,110

17,110

TOTAL

9,275,919

3,333,730

12,609,649

The capital increase, following the fundraising car-

The capital increase, through the exercise of BSA, which

ried out in September 2019, resulted in the creation of

took place during the 2019 fiscal year, resulted in the crea-

3,157,895 ordinary shares, with a par value of €0.04.

tion of 22,600 ordinary shares, with a par value of €0.04.

The capital increase, through the exercise of BSA

The capital increase, resulting from definitive allocations

on the part of Kepler Cheuvreux, which took place

of free preferential shares (AGAP), which took place during

during the 2019 fiscal year, resulted in the creation of

the 2019 fiscal year, resulted in the creation of 17,110 pre-

105,000 ordinary shares, with a par value of €0.04.

ferential shares, with a par value of €0.04.

The capital increase, through the exercice of BCE during

the 2019 fiscal year, resulted in the creation of 31,125 ordi-

nary shares, with a par value of €0.04.

Changes in equity

EQUITY AT THE START OF THE PERIOD

7,481,498

Capital increase following the fundraising carried out

56,955,297

Increase in capital through exercising of BCE warrants

249,000

Increase in capital through exercising of BSA warrants

180,800

BSA subscription

18,180

Increase in capital through exercising of Kepler BSA warrants

2,231,145

Result for the period

-42,648,672

EQUITY AT THE END OF THE PERIOD

24,467,248

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Stock-options

2018 stock-options

On the authorization of the combined general meeting of April 27, 2018, the board of directors decided, on December 3, 2018, to grant 46,000 options to subscribe for common shares, distributed as follows: 23,000 Options A and 23,000 Options B. These options entitle holders to subscribe to 46,000 new shares, representing the achievement of attendance and / or performance criteria, representing 0.37% of the existing capital as of December 31, 2019, at unit price of €20.35, issue premium included.

2019 stock-options

On the authorization of the combined general meeting of March 28, 2019, the board of directors decided, on April 1, 2019, to grant 46,000 options to subscribe for common shares. These options entitle holders to subscribe to 46,000 new shares, representing the achievement of attendance and / or performance criteria, representing 0.37% of the existing capital as of December 31, 2019, at unit price of €22.70, issue premium included.

Preferential shares («AGAP»)

2017 plan:

On the authorization of the combined general meeting of April 27, 2017, the board of directors' meeting decided, on May 15, 2017, to allocate provisionally 5,250 preferential shares, distributed as follows: 270 AGAP 2017-01, 1,800 AGAP 2017-02, 3,180 AGAP 2017-03, and on Sep- tember 25, 2017, to allocate provisionally 560 preferential shares, distributed as follows: 50 AGAP 2017- 01, 200 AGAP 2017-02, 310 AGAP 2017-03.

These preferential shares may be converted based on the achievement of the performance criteria into a maximum of 421,000 ordinary shares: 32,000 ordinary shares under AGAP 2017-01, 40,000 ordinary shares under AGAP 2017- 02, and 349,000 ordinary shares under AGAP 2017-03.

2018 plan:

On the authorization of the combined general meeting of April 5, 2018, the board of directors'meeting decided, on April 16, 2018, to allocate provisionaly 12,080 preferential shares, distributed as follows: 580 AGAP 2018-01 and 11,500 AGAP 2018-02; then on September 27, 2018, to allocate provisionaly 370 preferential shares (AGAP 2018-03); then on February 11, 2019, to allocate provisionaly 370 preferential shares (AGAP 2018-03).

of 301,500 01 ordinary shares: 58,000 ordinary shares under AGAP 2018-01, 169,500 ordinary shares under AGAP 2018-02, and 74,000 ordinary shares under AGAP 2018-03.

2019 plan:

On the authorization of the combined general meeting of March 28, 2019, the board of directors'meeting decided, on April 1, 2019, to allocate provisionaly 11,900 preferential shares, distributed as follows: 4,760 AGAP 2019-01, 4,760 AGAP 2019-02 and 2,380 AGAP 2019-03; then on September 23, 2019, to allocate provisionaly 4,700 preferential shares, distributed as follows: 2,240 AGAP 2019- 01, 2,240 AGAP 2019-02 and 220 AGAP 2019-03; then on December 2, 2019, to allocate provisionaly 3,000 preferential shares, distributed as follows: 1,000 AGAP 2019-01, 1,000 AGAP 2019-02 and 1,000 AGAP 2019-03;

These preferential shares may be converted based on the achievement of the performance criteria into a maximum of 193,000 02 ordinary shares: 78,800 ordinary shares under AGAP 2019-01, 78,800 ordinary shares under AGAP 2019-02, and 35,400 ordinary shares under AGAP 2018-03.

Stock warrants

BSA 2009-1

At the general meeting and the meeting of the board of directors of July 8, 2009 and following the board of direc- tors' meeting of September 8, 2011, 3,096 BSA 2009-1 warrants were issued; of these 556 were canceled following the resignation of one of the directors and 2,540 have been exercised.

BSA KEPLER CHEUVREUX

In accordance with the board of directors' decision of December 9, 2014, as authorized by the combined general meeting of April 2, 2014, then in accordance with the board of directors' decision of December 12, 2016, as authorized by the combined general meeting of June 28, 2016, a total number of 900,000 BSA warrants were issued, 742,600 of which had been exercised as at July 20, 2018, expiry date of the contract. The 157,400 BSA warrants not exercised on the same date became lapsed.

By decision of the board of directors on September 27, 2018, as authorized by the combined general meeting of April 5, 2018, 400,000 BSA warrants were issued, of which 139,000 BSA warrants were exercised on December 31, 2019.

These preferential shares may be converted based on the achievement of the performance criteria into a maximum

01 these figures take into account on the one hand the departure of an AGAP 2018-02 beneficiary and on the other hand the non- achivement of a performance criterion attached to AGAP 2018-02.

02 these figures take into account the departure of an AGAP 2019- 01, 2019-02 and 2019-03 beneficiary.

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The 261,000 BSA warrants not exercised on the same date confer subscription right to 261,000 new shares, representing 2.07% of the existing capital as at 31 December 2019, at unit price defined contractually between CARMAT and the Kepler Cheuvreux, the holder of the BSA warrants, as being equal to the average share price at the time of the drawdown, less a discount of not more than 6%.

BSA 2017

By decision of the board of directors dated May 15, 2017, 12,000 warrants were issued pursuant to a delegation of authority granted by the combined general meeting of April 27, 2017, none of which had been exercised as at December 31, 2019. 12,000 warrants not exercised on the same date entitle them to subscribe for 12,000 new shares, representing 0.10% of the existing capital as at December 31, 2019, at unit price of €30.10.

SUMMARY TABLE OF BSA WARRANTS

BSA 2018

By decision of the board of directors dated June 11, 2018, 10,000 warrants were issued pursuant to a delegation of authority granted by the combined general meeting of April 5, 2018, none of which had been exercised as at December 31, 2019. 10,000 warrants not exercised on the same date entitle them to subscribe for 10,000 new shares, representing 0.08% of the existing capital as at December 31, 2019, at unit price of €20.93.

BSA 2019

By decision of the board of directors dated June 24, 2019, 6,000 warrants were issued pursuant to a delegation of authority granted by the combined general meeting of March 28, 2019, none of which had been exercised as at December 31, 2019. 6,000 warrants not exercised on the same date entitle them to subscribe for 6,000 new shares, representing 0.05% of the existing capital as at December 31, 2019, at unit price of €20.21.

Issued

Subscri-

Lapsed

Reserve

Exercised

Balance

Lapsing on

bed

BSA 2009-1

3,096

3,096

556

0

2,540

0

July 8, 2019

GM of July 8, 2009

BSA Kepler Chevreux

900,000

900,000

157,400

0

742,600

0

July 20, 2018

(old tranches)

BSA Kepler Cheuvreux

400,000

400,000

0

0

139,000

261,000

Sep. 26, 2020

(new tranches)

BSA 2017

12,000

12,000

0

0

0

12,000

May 15, 2027

BSA 2018

10,000

10,000

0

0

0

10,000

June 11, 2028

BSA 2019

6,000

6,000

0

0

0

6,000

June 24, 2029

Start-up company stock warrants (BCE)

BCE 2009-1

At the general meeting and the meeting of the board of directors of July 8, 2009 and following the board of direc- tors' meeting of September 8, 2011, 3,108 fully assigned and subscribed BCE-2009-1 warrants were issued, exercised.

BCE 2009-2

At the general meeting and the meeting of the board of directors of July 8, 2009 and following the board of direc- tors' meeting of September 8, 2011, 7,566 fully assigned and subscribed BCE-2009-2 warrants were issued, 4,475 of which have been exercised and 3,091 of which have lapsed and been canceled.

BCE 2012-1

In accordance with the board of directors' decision of June 27, 2012, as authorized by the combined general meeting of April 26, 2012, 56,500 fully assigned and subscribed BCE-2012-1 warrants were issued, of which 45,000 have lapsed and been canceled. The 11,500 BCE-2012-1 warrants subscribed and not exercised as at December 31, 2019 confer subscription rights to 11,500 new shares, representing 0.10% of the existing capital as at December 31, 2019, at unit price of €108.483.

BCE 2012-2

In accordance with the board of directors' decision of November 8, 2012, as authorized by the combined general meeting of April 26, 2012, 6,700 fully assigned and subscribed BCE-2012-2 warrants have been issued. The

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6,700 BCE-2012-2 warrants subscribed and not exercised as at December 31, 2019 confer subscription rights to 6,700 new shares, representing 0.06% of the existing capital as at December 31, 2019, at unit price of €122.003.

SUMMARY TABLE OF BCE WARRANTS

Issued

Subscri-

Lapsed

Exercized

Balance

Lapsing

bed

on

BCE 2009-1

3,108

3,108

0

3,108

0

Sept. 9, 2019

GM of July 8, 2009

BCE 2009-2

7,566

7,566

3,091

4,475

0

July 8, 2019

GM of July 8, 2009

BCE 2012-1

56,500

56,500

45,000

0

11,500

June 27, 2022

GM of April 26, 2012

BCE 2012-2

6,700

6,700

0

0

6,700

Nov. 8, 2022

GM of April 26, 2012

  • Other balance sheet details Conditional advances

The conditional advances item comprises repayable advances received from Bpifrance, the total amount of which was €14,507,309 as at the end of the financial year. Note 3.2.2.6 below specifies the repayment conditions of these advances.

They are interest-bearing at the contracted rate of 5.59%. The interest accrued, calculated using the capitalization method, stood at €5,681,519 at the year end and appears in liabilities under Sundry loans and financial debts.

Accrued income

Value of accrued income included in

Value

the following balance sheet items

Other debtors

76,111

Total

76,111

Accrued charges

Deferred income and charges

Deferred

Value

charges

Operating expenses

121,610

Total

121,610

Deferred charges comprises the share of subscriptions, software license royalties and insurance premiums for the period after December 31, 2019, totaling €121,610.

Deferred

Value

income

Operating income

None

Total

None

Information on related enterprises

The following balance sheet items include sums in connection with related enterprises:

Value of accrued charges included in the following balance sheet items

Loans from credit institutions

Sundry loans and financial debts

Trade accounts payable and related payables Tax and social liabilities

Total

Value

733,333

5,681,519

2,968,394

2,547,493

11,930,739

Trade accounts payable and related payables

145,818

Provision for expenses

Four preferential share allocation plans, as at February 11, 2019; April 1, 2019; September 23, 2019 and December 2,2019, allowed for the provisional allocation of 19,970 preferential shares, which can be converted based on the achievement of the performance criteria to a maximum of 233,000 ordinary shares. The definitive vesting dates for these preferential shares are fixed at February 11, 2020 for 370 preferential shares, at April 1, 2020 for 11,900 preferential shares, at September 23, 2020 for 4,700 preferential shares and at December 2, 2020 for 3,000 preferential shares. At the end of the year, the Company booked a provision for expenses corresponding to the amount of

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the employer contributions of 20% to be due in 2020, on a porata basis of the vesting period and based on the estimate of the value of the ordinary shares that could be converted at the end of the vesting period.

The calculation assumptions made were as follows:

  • Determination of a percentage of achievement of each of the performance criteria;
  • Value of a ordinary share of €19.70;
  • Employer contribution rate of 20%.

3.2.2.5 Supplementary information on the income statement

  • Operating subsidies

The Company received the sum of €14,000 as an operating subsidy from the Association nationale de la recherche et de la technologie (national research and technology asso- ciation) for employment of 1 PhD student.

  • Applied research and development costs

Research and development costs are accounted for under expenses. They amounted to €29,368,163 in 2019, compared to €27,193,406 in the previous year.

  • Research tax credit

The income statement for the year shows a research tax credit amounting to €1,636,019, corresponding to the amount calculated for the year 2019.

  • Extraordinary income and expenses

Type

December

December

31, 2019

31, 2018

Extraordinary income

- Property disposal

- Disposal of own shares

46,794

60,198

Total

46,794

60,198

Extraordinary expenses

- Property disposal

- Disposal of own shares

60,767

58,564

- Fines and penalties

2,513

3,424

- Exceptional depreciation charges

87,458

Total

150,738

61,987

The extraordinary income result is relative to:

  • disposals of own shares carried out under the liquidity contract;
  • an allowance for exceptional depreciation relating to the scrapping of equipment that is not fully depreciated.
  • Information on associates

The following income statement items include sums in connection with associates:

Other purchases and external expenditure

506,888

In addition, CIR's claim for 2018 was sold to Prédirec, which collected it at the end of 2019. This operation generated a cost for CARMAT of €36,930 in 2019 (including commissions and interest).

  • Auditors' fees

The total amount of auditors' fees paid over the year is €112,000 excluding taxes and disbursements and breaks down as follows:

Total amount (€)

PWC

LCA

Total

Account certification fees

50,500

35,000

85,500

Other Services fees

- Other Services required by law

3,500

3,500

7,000

- Other Services

9,750

9,750

19,500

Total

63,750

48,250

112,000

3.2.2.6 Financial commitments and other information

  • Financial commitments Commitments made

Repayable advances totaling €14,507,309 have been received at the end of the fiscal year from the BPI, of which €1,450,732 obtained in June 2019 corresponding to the last tranche. The corresponding accrued interest amounts to €5,681,519 at the end of the financial year. This amount is repayable subject to achieving cumulative revenue of at least €38,000,000. The Bpifrance agreement provides for supplementary payments if certain conditions are met, so that the total amount repayable could exceed the amount of the advance initially granted, up to a ceiling of €50,000,000.

On June 24, 2008 the Company signed a royalties agreement with Professor Alain Carpentier and Matra Défense, who still held shareholdings as at December 31, 2019. Under this Agreement, the Company undertakes to pay Professor Alain Carpentier and Matra Défense 2% of the net proceeds from sales of the CARMAT Artificial Heart

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produced and distributed by CARMAT SA, with this sum being shared between the two beneficiaries in proportion to their respective shares in the capital of the Company on the date it was established. These royalties will be payable every six months within 30 days of the end of each six-month period, commencing after the first marketing of the CARMAT Artificial Heart post CE marking in Europe and FDA marketing authorization in the United States, and ending upon expiry of the patents shown in Annex to the agreement.

The Company is also authorized to repurchase at any time the right to benefit from these royalties for a sum of €30,000,000 less any royalties already paid under the agreement, with this total sum being shared between the two beneficiaries in proportion to their respective shares in the capital of the Company on the date it was established. This sum of €30,000,000 is index-linked to the Indice du Prix à la Production de l'Industrie des Services aux Entreprises - Matériel médicochirurgical et d'or- thopédie-exportation zone euro [Index of Prices for the Industrial Production of Services to Businesses - Medico -surgical and orthopedic equipment - for export within the Eurozone].

The rights allocated to Professor Alain Carpentier and to Matra Défense in this way are non-transferable.

As at December 31, 2019, since the marketing of the CAR- MAT Artificial Heart had not started, no royalty had been paid by the Company under the agreement.

In addition, the Company has signed a royalty agreement with the EIB providing for the payment of additional remuneration to the EIB depending on the commercial performance of the Company. This agreement runs for 13 years from the year in which the cumulative sales of CARMAT will reach €500,000. At any time, the Company may decide to terminate the royalties contract by paying a lump sum (net of royalties already paid), depending on the amount borrowed and the year of the decision.

In the event of the occurrence of certain events (in particular in the event of the declaration of the anticipated repayment of the credit by EIB or if a new shareholder were to hold 33% of the voting rights of CARMAT), the EIB could, if it considered it necessary, ask the Company for the advance payment of royalties up to a certain percentage of the amount of the credit actually drawn (this progressive percentage ranging from 100% of the amount borrowed if the event occurs during the first four years of the financial contract, to 160% if the event occurs after the eleventh year).

Commitments received

None.

Pension and retirement commitments

The Company has not signed a specific agreement on retirement commitments. These are therefore limited to the agreed retirement lump-sum payment.

In application of the reference method (ANC 2018-01), the provision for retirement commitments has been booked as at December 31, 2019.

The calculation assumptions made were as follows:

  • time-apportionedrights method in accordance with Regulation 2003 R-01 of the CNC;
  • retirement on the initiative of the member of staff, at 62 years (non-management) or 65 years (management);
  • salary increases of 2% per annum;
  • low staff turnover;
  • discount rate of 0.77% per annum (as against the rate of 1.57% used as at December 31, 2018 and 0.77% as at June 30, 2019).

The overall amount of the provision was €413,906 at the end of the period, an increase of €110,938 on the previous period.

  • Other information Information on the management
    ADVANCES AND LOANS TO MANAGEMENT

No loans or advances were made to the management of the Company during the financial year, in accordance with the provisions of Article R.123-197 of the French Commercial Code.

MANAGEMENT REMUNERATION

Total directors' fees recognized in respect of 2019 amounted to €69,839 (amounts entered under « Other expenses » in the income statement).

The total remuneration paid to the management bodies was €650,135 for the financial year and breaks down as follows:

Type

2019

2018

Gross salaries

465,396

471,295

Benefits in kind

7,793

5,270

Bonuses

176,946

160,912

Total remuneration

650,135

637,477

Increases and reductions in future tax liabilities

Type of temporary differences

Value

Allowable loss carry-forwards

268,500,634

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financial informations

This amount comprises:

  • the tax loss carried forward made during previous periods and available as at January 1, 2019, in the sum of €221,385,242;
  • the tax loss made in the 2019 fiscal year in the sum of €47,115,392.

End of period staffing levels

Salaried staff

2019

2018

Managers

80

66

Supervisors and technicians

18 *

15 ***

Employees

9 **

9 *

Total

107

90

*: including 1 trainee

**: including 3 trainees

***: including 2 trainees

auditors' report on the 2019 financialstatements

profession of auditor.

CARMAT SA

36, Avenue de l'Europe

JUSTIFICATION OF OUR ASSESSMENTS

Immeuble l'Etandard energy III

78140 Vélizy-Villacoublay

Pursuant to the provisions of Articles L. 823-9 and R.823-7

of the French Commercial Code relating to the justification

OPINION

of our assessments, we inform you that the most impor-

tant assessments that we have made, in our professio-

In execution of the mission entrusted to us by your general

nal judgment, have the appropriateness of the accounting

meeting, we have audited the financial statements of CAR-

principles applied and the reasonableness of the signifi-

MAT for the year ended December 31, 2019, as attached

cant estimates used and the overall presentation of the

to this report.

accounts.

We certify that the annual accounts are, in the light of

The assessments thus made fall within the context of the

French accounting rules and principles, fair and accurate

audit of the annual financial statements taken as a whole

and give a true and fair view of the results of the opera-

and the formation of our opinion expressed above. We do

tions of the past financial year and the financial position

not express an opinion on items in these separate annual

and assets of the company at the end of the year.

accounts.

FOUNDATION OF THE OPINION

SPECIFIC VERIFICATIONs

Auditing framework

In accordance with the professional standards applicable

in France, we have also performed the specific verifica-

We conducted our audit in accordance with professional

tions required by legal and regulatory texts.

standards applicable in France. We believe that the evi-

dence we have collected is sufficient and appropriate to

Information provided in the management report and

provide a basis for our opinion.

other documents on the financial position and the annual

accounts sent to shareholders

Our responsibilities under these standards are set out in

the «Auditors' Responsibilities for Auditing the Annual

We have no matters to report as to the fair presenta-

Accounts» section of this report.

tion and the consistency with the financial statements

of the information given in the management report of the

Independence

Board of Directors and in the other documents with res-

pect to the financial position and the financial statements

We carried out our audit mission in accordance with the

addressed to the shareholders.

independence rules applicable to us, from January 1,

2019 to the date of our report, and in particular we did not

We certify the fairness and consistency with the finan-

provide services prohibited by the code of ethics of the

cial statements of the information relating to the payment

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periods mentioned in Article D.441-4 of the French Commercial Code.

Corporate governance information

We certify the existence, in the section of the management report of the Board of Directors devoted to corporate governance, of the information required by Article L.225- 37-4 of the French Commercial Code.

Other information

In application of the law, we made sure that the various information relating to the identity of the owners of the capital or the voting rights were communicated to you in the report of management.

RESPONSIBILITIES OF THE MANAGEMENT AND THE PERSONS CONSTITUTING CORPORATE GOVERNANCE RELATING TO THE ANNUAL ACCOUNTS

It is the responsibility of the management to prepare annual accounts presenting a true and fair view in accordance with French accounting rules and principles and to set up the internal control that it deems necessary for the preparation of annual accounts that do not contain any significant anomalies, that they come from fraud or result from errors.

When preparing the annual accounts, it is the responsibility of management to evaluate the ability of the Company to continue operating, to present in these accounts, as the case may be, the necessary information relating to the continuity of operations and to apply the going concern accounting policy unless it is intended to wind up the company or cease its business.

The annual accounts have been adopted by the Board of Directors.

RESPONSIBILITIES OF THE AUDITORS RELATING TO THE AUDIT OF THE ANNUAL ACCOUNTS

It is our responsibility to prepare a report on the annual accounts. Our objective is to obtain reasonable assurance that the financial statements taken as a whole do not contain any material misstatements. Reasonable assurance corresponds to a high level of assurance, but does not guarantee that an audit performed in accordance with the standards of professional practice can systematically detect any significant anomaly. Anomalies may arise from fraud or error and are considered significant where it can reasonably be expected that they, taken individually or cumulatively, may influence the economic decisions that account users take in their business based on these.

As specified by Article L.823-10-1 of the French Commercial Code, our mission of certification of accounts is not to guarantee the viability or the quality of the management

of your company.

As part of an audit conducted in accordance with the professional standards applicable in France, the statutory auditor exercises his professional judgment throughout this audit.

In addition :

  • it identifies and assesses the risks that the annual accounts contain material misstatements, whether due

to fraud or error, defines and implements audit procedures to address such risks, and collects considers it sufficient and appropriate to base its opinion. The risk of not detecting a significant anomaly from fraud is higher than that of a significant misstatement resulting from an error, as the fraud may involve collusion, falsification, voluntary omissions, misrepresentation or circumventing internal control;

  • it becomes aware of the internal control relevant to the audit in order to define appropriate audit procedures in the circumstances, and not to express an opinion on the effectiveness of the internal control;
  • it assesses the appropriateness of accounting poli- cies used and the reasonableness of accounting esti- mates made by management, as well as the information concerning them provided in the annual accounts;
  • it assesses the appropriateness of management's appli- cation of the going concern accounting policy and, depending on the elements collected, the existence or otherwise of significant uncertainty related to events or circumstances likely to causes the company's abi- lity to continue as a going concern. This assessment is based on the information gathered up to the date of its report, but it is recalled that subsequent circumstances or events could jeopardize the continuity of operations. If it concludes that there is significant uncertainty, it draws the attention of the readers of its report to the information provided in the annual accounts about this uncertainty or, if this information is not provided or is not relevant, it formulates a qualified certification or a refusal to certify;
  • it assesses the overall presentation of the annual accounts and assesses whether the annual accounts

reflect the underlying transactions and events so as to give a true and fair view.

Signed in Neuilly-Sur-Seine and Paris,

Thursday March 12, 2020,

The statutory auditors

PRICEWATERHOUSCOOPERS

LISON CHOURAKI

AUDIT

AUDIT

THIERRY CHARRON

LISON CHOURAKI

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3.4 Internal control and risk management procedures relative to the prepara-

tion and processing of accounting and financial information

One of the objectives of internal control is to prevent and control the risks of error and fraud in the accounting and financial fields. In this context, CARMAT did set up a system aimed at providing reasonable assurance of the reliability of its accounting and financial information produced and published.

The accounting and financial processes correspond to all the activities enabling the economic operations of the Company to be translated into accounting and financial information.

The two key processes that affect the reliability of CAR- MAT's accounting and financial information are:

  • the process of producing accounting and financial information (including the accounting closing process);

production of accounting information

Accounting is carried out by CARMAT's accounting team, assisted by an accounting firm that has been supporting the Company for many years.

Payroll is provided by an external firm. And CARMAT is also assisted as needed by renowned specialist firms, particularly for legal and tax matters.

For the production of its accounts, CARMAT relies mainly in terms of information systems on its ERP (Enterprise Resource Planning), and on more specific software used by its accounting firm; as well as a set of policies, operating procedures and calendar of operations, which are updated regularly.

  • the process of publishing accounting and financial information.

The Company's objectives in this area are:

  • the production of reliable information that complies with legal and regulatory requirements;
  • prevention and detection of accounting and financial fraud or irregularities;
  • the preservation of the assets of the Company;
  • the application of the guidelines given by the Board of Directors;
  • the reliability of the information used internally for monitoring and control purposes;
  • the reliability of the accounts and other financial infor-

mation communicated to the financial markets.

The organization set up aims in particular to ensure segregation of duties, thereby limiting the risk of error and fraud; and to allow an appropriate level of control, especially on the most sensitive points. It is specified that CARMAT draws up its accounts according to French accounting standards and does not draw up any consolidated accounts.

The accounts are closed and reviewed monthly by the finance department, with the accounting firm. A summary of the financial results, including a comparison with the budget approved annually by the Board of Directors, is presented monthly to the management of the Company. The operational departments also receive a monthly statement of their expenses, with comparison with the bud- get, which is prepared by management control. A financial update is presented by the CFO at each Board of Directors meeting.

CARMAT is still in the clinical phase and does not yet generate revenues, so a particular attention is paid to the financing plan of the Company, its cash flow forecasts and the liquidity risk. In this context, the Company's business plan is updated and presented to the Board of Directors, at least once a year (and more frequently if necessary), and the financing strategy and options regularly shared and discussed with the Board of Directors.

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publication of accounting and financial information

The Company publishes its financial calendar for the current year in January.

The Company publishes its results semi-annually and annually. The annual financial report is integrated into the Universal Registration Document (formerly Registration Document) which is made available to shareholders and the public, within the legal deadlines.

The accounting and financial information published semi-annually and annually is prepared by CARMAT's administrative and financial department, under the control of the CEO and is then subject of an examination by the audit committee, then by the Board of Directors.

In addition, CARMAT's annual accounts are certified by the Company's Statutory Auditors, while the half-yearly accounts are subject to their limited review.

All press releases published by the Company, whether or not they are of an accounting or financial nature, are validated beforehand by the CEO of the Company.

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corporate

governance

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corporate governance

4.1 composition of the company's administrative and management bodies

4.1.1 composition of the board of directors

The Board of Directors now consists of 9 members, including 5 independent directors. Mr. Jean-Pierre Garnier is Chairman.

As a reminder, CARMAT had announced on December 3, 2018 the cooptation of Mr. Jean-Pierre Garnier to the Board of Directors of the Company to replace Mr. Jean-Claude Cadudal, Chairman of the Board of Directors resigned, for the remainder of his mandate, and his appointment as new Chairman of the Board. The appointment of Mr. Jean-Pierre Garnier as Director of the Company was ratified by the general meeting of March 28, 2019.

At the end of this same meeting, Mr. Alain Carpentier left his position as Director of CARMAT and was appointed Honorary President of the Company. As such, he remains

invited to all board meetings, without however taking part in the votes.

On June 6, 2019, Mr. Karl Hennessee succeeded Ms. Anne-Pascale Guédon as permanent representative of Matra-Défense on the Board of Directors of the Company.

As a reminder, the general meeting of April 5, 2018 appointed Mr. Pierre Bastid as Director, for a period of 6 years expiring at the end of the ordinary general meeting to approve the accounts of the year ended December 31, 2023.

The table below details the information concerning each of the members of the Board of Directors (it being specified that the information on the other mandates of the directors are those of which the Company is aware and that the companies marked with a * are listed companies):

Full name or

Functions

Previous other positions

registered name

fulfilled

Other positions currently held

and functions in other

of the member

Term of office

within the

in other companies

companies over the last

and business

Company

five years

address

First appointed:

December 3, 2018

Mr. Jean-Pierre

Chairman of

- Chairman of Idorsia*

- Chairman of Actelion *

- Director at Radius Health*

Garnier

Term of office: Until

the board of

(til its acquisition by

(french & american

- Director at United Technology*

GM to approve the

directors

Johnson and Johnson in 2017)

citizenship)

accounts for year

- Director at Fondation Paul Newman

ending December

31, 2021

Mr. Stéphane Piat

First appointed:

April 27, 2017

(french citizenship)

Chief Executive

Division vice-president, Global

CARMAT

Term of office: Until

Officer **

Board member of

Market Development, at Structural

Member of

Heart Division - Abbott Vascular -

36, avenue de l'Eu-

Triflo Cardiovascular Inc.

GM to approve the

San Francisco

the Board of

rope

accounts for year

Directors

78 941 Velizy

ending December

Villacoublay

31, 2021

Matra Défense

First appointed:

- Senior Vice President of Projic 9

Represented by

March 20, 2015

- Senior Vice President of Matra Défense

Mr. Karl Hennessee

- Managing director of Matra

(american citizenship)

Term of office: Until

Director

- Member of the executive

Holding GmbH

GM to approve the

committee of Projic 9

Airbus Group

accounts for year

- Board member of Shiny T BV, Sunny T BV,

42, avenue Raymond

ending December

Perpetual Ltd, Fast Express Investment Ltd

Poincaré

31, 2021

and Aeropart

75016 Paris

**: in accordance with the articles of association, the board of directors appoints the Chief Executive Officer, fixes the duration of his mandate, determines his remuneration and fixes the limits of his powers if necessary.

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corporate governance

Full name or

Functions

Previous other positions

registered name

fulfilled

Other positions currently held

and functions in other

of the member

Term of office

within the

in other companies

companies over the last

and business

Company

five years

address

- Member of the supervisory board of

Mr. Henri Lachmann

First appointed:

Norbert Dentressangle SA*

- Chairman of the board of directors of

- Director of various companies in

(french citizenship)

December 23, 2010

the Centre chirurgical Marie Lannelongue

the Schneider Electric Group*

Association Marie

Independent

(Marie Lannelongue Surgical Center) (an

- Honorary vice-Chairman of the

Term of office: Until

association under the law of 1901)

Lannelongue

supervisory board at Vivendi SA*

GM to approve the

director

133, avenue de la

- Chairman of the Institut Télémaque (an

- Vice-chairman and treasurer of

accounts for year

Résistance

association under the law of 1901)

the Institut Montaigne (an associa-

ending December

92 350 Le Plessis

- Director of the Fondation Entreprendre

tion under the law of 1901)

31, 2021

Robinson

- Chairman of the campaign committee of

the Strasbourg University Foundation

In a personal capacity:

- Chairman of the board of directors of

Abivax SA*

- Manager at Nakostech SARL

- Chief executive and director of

Truffle Capital

Truffle Capital

- Honorary chairman and director

- Director at Vexim SA* until 2017

of France Biotech (an association

First appointed:

- Director of Neovacs SA* until 2014

under the law of 1901)

May 7, 2010

Represented by

- Director at Plasmaprime SAS

As representative of Truffle Capital:

Dr Philippe Pouletty

until 2015

Term of office: Until

Director

- Director at Biokinesis SAS

(french citizenship)

GM to approve the

- Director at Immune Targeting

- Director at Pharnext SA*

Systems Ltd (UK) until 2015

accounts for year

Truffle Capital

- Director at Deinove SA*

ending December

- Director at Altimmune, Inc.

5, rue de la Baume

31, 2021

- Director at Carbios SA*

(United States) until

75 008 Paris

- Director at Affluent Medical SA

December 2016

- Chairman of the board of directors of

Skinosive SASU

- Director at Holistick Medical SASU

- Director at Artedrone SASU

- Chairman of the board of directors of

Diaccurate SASU

Mr. Pierre Bastid

First appointed:

April 5, 2018

- Chairman of Babalia

(french citizenship)

Hougou

Term of office: Until

Independant

- Director at Hougou SA

None

GM to approve the

Director

- Director at Cellectis

480, avenue Louise

accounts for year

1050 Brussels

- Director at Pharnext

ending December

Belgium

31, 2023

Santé Holdings SRL

First appointed:

Represented by Mr.

April 12, 2016

Antonino Ligresti

Term of office: Until

- Sole shareholder of Immobiliare Cosio

(italian citizenship)

Director

SRL, Iniziative Immobiliari Due SRL and

None

GM to approve the

Iniziative Immobiliari Tre SRL

NCTM

accounts for year

ending December

Via Agnello 12

31, 2021

20121 Milano Italy

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Full name or

Functions

Previous other positions

registered name

fulfilled

Other positions currently held

and functions in other

of the member

Term of office

within the

in other companies

companies over the last

and business

Company

five years

address

Mr. Jean-Luc

First appointed:

Lemercier

January 2, 2017

(french citizenship)

Term of office: Until

Independent

Corporate officer

None

Edwards Lifesciences

GM to approve the

director

Edwards Lifesciences

Chemin du Clusel 1

accounts for year

1261 Le Vaud

ending December

Switzerland

31, 2021

Dr Michael Mack

First appointed:

(american citizenship)

January 2, 2017

The Heart Hospital

Term of office: Until

Independent

Baylor Plano

None

None

GM to approve the

director

1100 Allied Drive

accounts for year

4708 Alliance - S. 500

ending December

TX 75093 Plano

31, 2021

USA

As far as the Company is aware:

  • there is no family link between the Company's directors;
  • no director has been convicted of fraud in the last five years;
  • no director has been associated with any bankruptcy, sequestration of assets or liquidation in the last five years;
  • no director has been found guilty of any offense or any official public sanction pronounced by the statutory or

regulatory authorities (including designated professional bodies) in the last five years; and

  • no director has been prevented by a court from acting as a member of an administrative, management or supervisory board of an issuer or from taking part in the management or conduct of the affairs of an issuer over the past five years.

It should be noted that no strategic and/or historical investors acts together with others in relation to CARMAT.

4.1.2 Backgrounds of the members of the board of directors

KARL HENNESSEE

Karl Hennessee, Senior Vice-President of Airbus, has 25 years of experience in law, economics and regula- tion. He worked, in Europe and in the United States, as a business lawyer on some of the most important files for a very large company in the energy sector, then as Secretary General of this same company.

In addition to his management functions at Airbus, Karl Hennessee is the Chairman of the Board of Directors of the International Arbitration Tribunal within the International Chamber of Commerce. He also sits on the Board of Directors of many other non-profit organizations. He also lectures and regularly publishes articles on law and regulations.

DR JEAN-PIERRE GARNIER

Scientist and business leader, Jean-Pierre Garnier graduated from Louis Pasteur University (PhD in Pharma- cology) and Stanford University (Master in Business Administration). He started his career in 1975 at the pharmaceutical company Schering-Plough where he held a number of management positions in Europe before becoming President of their American division. In 1990, he joined Smithkline Beecham Laboratories as President of the Pharmaceuticals Division and became President and CEO in 1999.

In 2000, Jean-Pierre Garnier achieved the merge of two of the largest pharmaceutical groups (Smithkline Beecham and Glaxo Wellcome), to create GlaxoSmithKline (GSK), which he chaired until 2008. He was also Chairman of Actelion from 2011 to 2017.

The Best Practice Institute has nominated Jean-Pierre Garnier as one of the world's top 20 CEOs. He is an Officier de la Légion d'Honneur (Officer of the Legion of Honour) and Knight Commander of the Order of the British Empire.

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corporate governance

Dr PHILIPPE POULETTY

Dr Philippe Pouletty is a pioneer in biotechnology and medical devices. He founded SangStat in 1988, a company specialising in organ transplant therapy, listed on the NAS- DAQ, then Conjuchem in 1993, a biotech firm specialised in developing next-gen medicines from therapeutic peptides, listed on the Toronto Stock Exchange.

He is the co-founder and CEO of Truffle Capital, founder and Chairman of Deinove, a biotech company that develops compounds for industry from rare microorga- nisms, and Abivax, an innovative biotech firm that targets the immune system to eliminate viral and inflammatory diseases. Dr Pouletty is also founder of Carbios, a green chemical company developing innovative enzyme processes to reshape the lifecycle of plastics, co-founder and board member of Pharnext, a leading biopharma company in combinatorial medicine, and Vexim, an innovative medical devices company, Chairman of Diaccurate, a biotech company specialising in immunomodulation, and board member at Myopowers, Biokinesis, Kephalios and all other companies in the Truffle Capital portfolio.

Dr Pouletty graduated as a doctor of medicine from the University of Paris VI and holds master's degrees in immunology and virology from Institut Pasteur. He is also a post-doctoral research fellow at Stanford University, the 1999 laureate of the American Liver Foundation and Chevalier de la Légion d'Honneur. Dr Pouletty is the former Chairman and Honorary Chairman of France Biotech, the French biotech industry association, former Vice Chairman of Europabio and the author of 29 patents.

HENRI LACHMANN

Henri Lachmann began his career in 1963 as an auditor at Arthur Andersen. Seven years later, he joined French metal company Strafor-Facom and became the company's CEO in 1981. He has been a member of the board at Sch- neider Electric since 1996 and became the company's CEO in 1999. He also held the position of Chairman of the Supervisory Board from 2006.

Mr Lachmann graduated from HEC business school and is a qualified chartered accountant.

He is Director and Vice-President of the Saint Joseph hospital / Marie Lannelongue hospital foundation.

PIERRE BASTID

Former manager at Schneider Electric then Valeo, Pierre Bastid becomes in 1998 Vice President of Thomson Television Components France (Thomson Multimedia Group). In 2004, via the Magenta Participations structure, it successfully participated in the acquisition of Alstom Power Conversion, a group that later became Converteam Group, sold to General Electric in 2011.

Since that date, Pierre Bastid manages his assets resulting from the sale of his shares of Converteam.

DR ANTONInO LIGRESTI

Dr Antonino Ligresti began his career in the Medical Clinic at Milan University and at the city's Fatebenefratelli Hospital. In 1979, following the gradual acquisition of several high-profile establishments in Lombardy, he created Italy's first private hospital group, acknowledged for the quality of its services and patient-centric care, as well as its ties with teaching and academic research. Dr Ligresti joined the Générale de Santé board of directors in 2003 and became its chairman a year later. He was also instrumental in creating the European Oncology Institute.

Dr Ligresti is a qualified physician and surgeon, specialising in cardiology and internal medicine.

Jean-luc lemercier

Jean-Luc Lemercier draws on more than 30 years' experience and acknowledged leadership in medical devices. During his career, he has held a number of key positions in the field of cardiology, notably at Johnson & Johnson Cor- dis from 1996 to 2008, where he created and headed the Structural Heart Disease division. Since 2017, he has been Corporate Vice President EMEA, Canada & Latin America at Edwards Lifescience.

Mr Lemercier graduated in pharmacy from Claude Bernard Lyon 1 University.

dR michael mack

Michael Mack is an internationally renowned cardiac surgeon with extensive experience in the introduction of medical devices and innovative procedures for cardiovascular disease. He has authored more than 650 scientific publications and has received the Presidential Citation from the American College of Cardiology (ACC) and the Transcatheter Cardiovascular Therapeutics (TCT) Lifetime Achievement Award.

Dr Mack is a graduate of Boston College, St Louis University and the University of Texas Southwestern Medical School. He is also the Director of the Cardiovascular department for pharmaceutical firm Baylor Scott & White Health, a Director on the American Board of Thoracic Surgery and a member of the FDA Medical Device Epidemiology Network Initiative (MDEpiNet) Advisory Committee.

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STEPHANE PIAT

Stéphane Piat is an acknowledged specialist in the medical device business, particularly in the field of cardiology. He joined Carmat as Chief Executive Officer in September 2016.

Mr Piat started his career at Becton Dickinson Euro- pean Headquarters as a Market Researcher in 1995. He was appointed European Platform Leader for Locoregio- nal Anaesthesia five years later. In 2002, he joined Cor- dis, a Johnson & Johnson company, where he spent five years in several management positions ranging from Business Director France to European Marketing Director

for Cardiology. In 2007, he moved to Abbott Vascular as General Manager for mid-size countries, EMEA, and two years later oversaw the integration of Evalve as the com- pany's General Manager EMEA, heading clinical and commercial development of a new interventional cardiology product, Mitraclip. In 2014, he led Global Market Development of the Abbott Vascular Structural Heart Division in San Francisco as Division Vice President.

Mr Piat holds a master's degree in Management Science from IAE Dijon School of Management, and a post-graduate degree in Quantitative Marketing from ESA business school in Grenoble.

4.1.3 members of the management team

STEPHANE PIAT

See above.

Dr PIET JANSEN

Dr Petrus "Piet" Jansen has 20 years management experience in the circulatory support device industry. He began his career in 1997 as Director of Clinical Research for the Novacor Division of Edwards Lifesciences, a US company specializing in patient-focused medical innovations for structural heart disease. In 2001, he was appointed Vice President at Jarvik Heart Inc in New York, where he was responsible for the clinical programs. From 2004 to 2009, he was Chief Medical Officer with World Heart Corporation.

Dr Jansen holds a PhD in medicine from the University of Amsterdam and graduated as medical doctor from Radboud University Nijmegen, both in the Netherlands.

ÉRIC RICHEZ

Eric Richez joined CARMAT in September 2014 after a career in the European medical device industry.

He has over 13 years' experience in sales & marketing with Thoratec, a global leader in ventricular assistance devices, where he served as Sales & Marketing Director from 2002 to 2011 and Sales Director EMEA from 2011 to 2013. He then joined CircuLite, a company developing a circulatory support system to treat chronic heart failure, as Sales Director for Southern Europe.

Mr Richez holds a degree in Mathematics and training in Business & Management and Sales Force Management.

PASCALE D'ARBONNEAU

A graduate of the ESCP business school and holder of a DEA in Management Control and a Postgraduate Diploma in Finance and Accounting, Pascale d'Arbonneau is also a lecturer at Paris Diderot University.

She began her career in 1989 as an auditor at Coopers

  • Lybrand (now PWC) before entering the pharmaceuti- cal industry as Head of Finance & IT France at Johnson
  • Johnson - MSD (1995-1999). She spent most of her career (1999-2016) at GlaxoSmithKline (GSK). She joined as Director, Head of Controlling & Finance Partnering, and then held a number of senior positions within the Group (Vice President & Finance Controller, Pharma Europe from 2006 to 2010, Vice President & Area Finance Direc- tor, Western Europe from 2010 to 2014) before becoming Vice President Compliance and Control Integration for all business units worldwide. Before joining CARMAT at the end of 2018, Pascale d'Arbonneau was Executive Director of the Econocom International B.V. family office.

MARC GRIMME

Since 1996, Marc Grimmé has been the technical lead on the programme to develop the Carmat bioprosthetic heart.

He began his career in 1991 at MBDA France, where he worked on a range of issues linked to the development of mission-critical electronics, from upstream studies and the design phase to production commissioning.

Marc Grimmé is a graduate of the Institute Supérieur d'Electronique et du Numérique (ISEN).

THIERRY DUPOUX

Thierry Dupoux is a seasoned medical device professional with a strong and large expertise in Quality Assurance

  • Regulatory Affairs and R&D. Engineering Graduate from Ecole Centrale de Lyon (France), he has worked most of

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his career for Life Sciences companies such as General Electric where he became Supply Chain Quality & Compliance Manager for the plant of Buc (France) in his last position. In 2006, he joined Sorin Group, now named Liva- Nova, a world leader in Cardiac Surgery and Neuromodu- lation. Over the past 12 years at LivaNova, he held several senior positions in Quality Assurance, Regulatory Affairs and R&D. Prior to joining CARMAT, he was Vice President of Quality Assurance at LivaNova where he led the integration of the Quality Systems following the merger between Sorin Group and Cyberonics. He joined CARMAT in July 2018 as Director of Quality.

Alexandre eleonore

Alexandre Eleonore is a confirmed industry expert with a strong background in operational management. He graduated from the Sevenans Polytechnic Institute, now UTBM (Université de Technologie Belfort-Montbéliard), and spent the first part of his career in leading automotive equipment manufacturers such as Faurecia and Plastic Omnium. After 10 years in this sector, he joined the Sorin group in 2009, which became Microport CRM, one of the world's leading players in the treatment of cardiac rhythm disorders. He became Vice President Operations & Customer Service and implemented cost improvement plans, thanks to his knowledge of lean manufacturing and industrial process automation. He joined CARMAT as Industrial Director in November 2019.

francesco arecchi

A marketing professional with strong experience in

global leading companies within the healthcare indus- try, Francesco Arecchi joins Carmat in September 2017. Francesco Arecchi spent most of his career in Life Sciences companies such as Johnson & Johnson and Abbott, where he holds a number of positions from sales to marketing in Cardiology breakthrough technology products such as Cypher and MitraClip.

Prior to joining Carmat, he stood as Product Manager EMEA Structural Heart at Abbott. Francesco Arecchi is a biomedical engineer and graduated from Politecnico di Milano (Italy) with an MBA from Rotterdam School of Management (Netherlands).

RAOUIA BOUYANZER

Raouia has almost 16 years of experience in payroll and human resources management. She began her career in an accounting firm in 1998. In 2001, Raouia joined Mor- gan Stanley, where she held more than 9 years in several positions in social management control, payroll and human resources. Raouia joined CARMAT at the 'development' stage of the Company in February 2011 as an Administrative and Financial Manager, and implemented a human resources policy in 2012.

Raouia holds a master's degree in HR from ESSEC Business School and holds a degree in accounting and finance (2001).

4.2 CONFLICTS OF INTEREST IN THE GOVERNING, MANAGEMENT AND SUPERVISORY BODIES

AND THE EXECUTIVE BOARD

4.2.1 Potential conflicts of interest

At the date of this universal registration document and as far as the Company is aware, there are no current or potential conflicts of interest between the private interests of the Company's board of directors and the interests of the Company.

Similarly, as at the same date, the Company has no knowledge of any current or potential conflicts of interest between the private interests of the members of the audit committee, the compensation committee or the scientific

committee and the interests of the Company.

As far as the Company is aware, there are no current or potential conflicts of interest between the duties of the members of the board of directors towards the Company and their private interests and/or other duties.

As at the date of this universal registration document, there were no service contracts linking the members of the board of directors and the general management of the Company, nor any business relationship binding the independent directors and the Company. All regulated agreements are disclosed within section 5.6.1.

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4.2.2Commitments of the directors and executive

members to preserve shareholdings

No lockup commitment by directors and members of general management was in force on December 31, 2019, with the exception of the obligation for the CEO, Mr. Stéphane

Piat, to hold a certain percentage of the shares in registered form, ordinary shares which have resulted or which will result, where applicable, from the conversion of the preferential shares granted free of charge in 2017, 2018 and 2019 (see section 4.5.1 of this document).

SPECIALIZED

4.3 COMMITTEES

As at the date of this universal registration document, the

Company had set up the following committees:

Audit

quarterly accounts before their examination by the

4.3.1 committee

Board of Directors, financial position, cash position

By decision of the board of directors of July 8, 2009 the

and commitments of the Company;

Company set up an audit committee for an unlimited

- evaluate, in consultation with the auditors, the

duration.

appropriateness of the choice of accounting prin-

Under the exclusive and collective responsibility of the

ciples and methods;

members of the Board of Directors of the Company and

- consult the members of the board responsible for

in order to ensure the quality of internal control and the

the financial

aspects as well as the administrative

reliability of the information provided to shareholders and

and financial

director if he is not a member of the

financial markets, the Committee assume the matters

board between the end of any financial year and

relating to the preparation and control of accounting and

the date on which the Committee decides on the

financial information and, to this end, shall in particular:

draft annual accounts, the adequacy of the accoun-

follow-up on the process of developing information and

ting principles and methods used, the effective-

ness of the accounting control procedures and any

financial communication;

other appropriate matters;

monitor the effectiveness of the internal control and

- issuing a recommendation on the auditors pro-

risk management systems and in particular:

posed for appointment by the shareholders' mee-

- evaluate the internal control procedures and any

ting and to review the terms of their remuneration;

measures taken to remedy any significant internal

monitor the independence of the auditors and in

control dysfunctions;

particular:

- review the annual work programs of the auditors;

- propose the establishment of rules for recourse

- evaluate the adequacy of the risk monitoring

to auditors for work other than auditing in order to

guarantee the independence of the audit services

procedure;

provided by auditors in accordance with the laws,

monitor the statutory audit of the annual and conso-

regulations and recommendations applicable to the

Company, and verify its proper application;

lidated financial statements by the auditors and in

- authorize the use of auditors for work other than

particular:

auditing;

- reviewing the assumptions used for the prepara-

- examine the conditions of use of derivatives;

tion of the annual financial statements of the Com-

pany and the half-yearly and, where applicable,

- execute periodic review of the status of significant

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litigation;

review the Company's procedures for the receipt, retention and treatment of claims relating to accounting matters and accounting internal controls, audit matters and documents transmitted by employees on a anonymous and confidential basis and which would call into question accounting or auditing practices; and

generally, provide advice and make any appropriate recommendations in the above areas.

During the 2019 financial year, the audit committee met twice, in particular to review the 2018 financial state- ments, to analyse CARMAT's cash needs and financing options, and to review the financial statements relating to the first half of 2019.

As at the date of this universal registration document, the audit committee comprises Mr. Henri Lachmann, independant director and chairman of the audit committee.

4.3.2Appointment and compensation committee

The Company has also established an appointment and compensation committee which as at the date of this universal registration document is comprised of four members, including two independant members, appointed by the board of directors for an unlimited term:

  • Truffle Capital, represented by Dr Philippe Pouletty, director and chairman of the appointment and com- pensation committee;
  • Matra Defense, represented by Mr Karl Hennessee, director and member of the appointment and compen- sation committee;
  • Mr Jean-luc Lemercier, independent director;
  • Santé Holdings SRL, represented by Mr Antonino Ligresti, independant director.

The main objectives of the appointment and compensation committee are:

  • to recommend to the Board of Directors the persons who should be appointed to the general management, the board of directors and the main functions of the Company, as the case may be;
  • review the remuneration policies for managers and high-potential staff within CARMAT, propose the remuneration of the officers and, where applicable, the members of the board of directors and prepare any report that the Company must present on these subjects.

It reports to the board of directors on its activities at regular intervals.

4.3.3Boards of observers

Article 17-VI of the Articles of Association gives the ordinary general meeting the power to appoint, at its discre- tion, up to three persons or legal entities, who may or may not be shareholders, for a term of office of one year expiring at the general meeting of shareholders called to decide on the accounts for the year just ended and held during the year in which their terms of office expire. This term of office may be renewed an unlimited number of times. The duty of the observers is to ensure the strict application of the Articles of Association and to present their observations at the meetings of the board of

directors. The observers perform a general and permanent duty within the Company to advice and monitor. In connection with their role they may make observations to the board of directors.

Observers must be invited to each meeting of the board of directors in the same way as directors. Observers have only consultative powers on an individual or joint basis and have no voting rights on the board.

As at the date of this universal registration document, no observer has been appointed.

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4.4 STATEMENT ON CORPORATE GOVERNANCE

4.4.1 Corporate governance

The Company is refering to the recommendations of the code of corporate governance for quoted companies issued by the AFEP-MEDEF, to the extent that these principles are compatible with the organization, the size, the resources and the ownership structure of the Company.

To this end, the Company regularly proceeds with a review

of its corporate governance in respect of the recommendations of the code of corporate governance for quoted companies issued by the AFEP-MEDEF and updated in June 2018 *. The principal recommendations not applied are as follows:

*: The Company did not yet take into account the modifications made to the AFEP-MEDEF code in January 2020.

Exclusions

Reasons

There is no formal system to measure the individual contribution of each director.

Assessment of the board of

directorsReason: All board members gave positive feedback on the board's operation as a collective body, which is only possible if individual contributions are satisfactory.

The Company's Articles of Association provide for terms of office of the directors of six years, whereas

the AFEP-MEDEF recommends a limit of four years.

Term of office of directors

Reason: When the Company was established, it was deemed that a longer term would ensure the stabi-

lity of the Company's governance.

Composition of the appointments and compensation committee

The appointments and compensation committee does not include

2/3 of independent directors.

Reason: In each of the 2018 and 2019 financial years, an independent director was added to the com- mittee, so that the independent directors now represent 50% of the committee. The Company intends to continue increasing this proportion in the future.

Evaluation of the work of the board of directors and committees

It is not systematically carried out every year, within the board of directors,

a debate on its functioning and that of the committees.

Reason: Special attention will be given to this point during the next exercises.

Desirable balance in board

composition in terms of

The Company, which is not bound by the diversity obligations provided for by the French Commercial

diversity (representation of

Code as its shares are not listed on a regulated market, intends in the long term to further diversify the

women and men, nationali-

composition of its board, particularly in terms of of feminization.

ties, etc.)

To the extent that the contracts concluded between the Company and its employees do not include

Conclusion of a non-com-

non-competition clauses, the Company wished to align the condition of executive corporate officers with

petition agreement with

that of its employees. The Company therefore does not benefit from the protection of this type of clause,

corporate officers

even if it also intends to maintain and develop a retention policy by allocating securities giving access to

capital to its executive corporate officers.

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Apart from setting up the board of auditors and the appointment and compensation committee, and in order to meet the standards of corporate governance that the

Company has set itself, the elements described below have now been put in place.

internal rules of the

and within the scope of the Company's purpose, it shall

4.4.2board of directors

consider any matter affecting the proper functioning

In 2011, the board of directors adopted bylaws, the pur-

of the Company and shall, by its deliberations, resolve

matters affecting it,

pose of which is to define the ways in which it is organized

and operates over and above the legal and statutory pro-

appoint the chairman of the Board, the chief executive

visions in force. These rules were reviewed during 2016

year. It is available on request from the registered office

officer and the deputy chief executive officers, deter-

mine their duties and remuneration,

of the Company.

In addition to respecting the legal, regulatory and sta-

authorize the agreements and commitments referred

tutory provisions applicable to the Board, the Board of

to in Articles L.225-38 and followings of the Commer-

cial Code,

Directors:

determine the orientations of the Company's activity

authorize the decisions and commitments listed in the

Annex to the Rules of Procedure. It ensures the qua-

and ensure their implementation. Subject to the capa-

lity of information provided to shareholders and the

bilities expressly granted by shareholders' meetings

markets.

4.4.3activity of the board of directors

During the 2019 financial year, the board of directors met 6 times.

In addition to its traditional governance missions, including the approval of the 2018 annual accounts and those of the first half of 2019, the board focused in particular on:

  • orientation and monitoring of the artificial heart deve- lopment project;
  • the Company's strategic plan;
  • the financial forecasts and the financing strategy of the Company;
  • the commercial launch plan for the artificial heart;
  • the 'long-term-incentives' policy towards the manage- ment of the Company and its employees.

The board meetings are subject to an annual provisional calendar defined at the latest in January of each year. Each meeting is prepared in advance by the Chairman and the Chief Executive Officer.

The following table summarizes the effective presence of the directors at the various board meetings:

Effective presence at the board meetings

Number of mee-

Effective pre-

sence at the

(2019 year)

tings applicable

meetings

Jean-Pierre Garnier - Chairman of the Board

6

6

Stéphane Piat - Chef executive officer and Director

6

6

Professeur Alain Carpentier - Director

1

1

Truffle Capital - Director

6

6

Airbus Group - Director

6

3

Henri Lachmann - Director

6

6

Pierre Bastid - Director

6

6

Santé Holdings SRL - Director

6

5

Jean Luc Lemercier - Director

6

6

Michael Mack - Director

6

5

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4.4.4 Separation of the mandates of the

chairman of the board of directors and the chief executive

When the Company converted to a société anonyme, the board of directors opted for a dissociation of the mandates of the chairman of the board of directors and of the chief executive.

The board of directors must approve in advance the following decisions and commitments, it being specified that the thresholds mentioned below in these decisions will be assessed (i) individually for each operation and (ii) annually:

A. Corporate life of the Company:

  1. any amendment to the articles or other documents constituting the Company or its subsidiaries;
  2. liquidation, amicable dissolution or other similar proceedings relating to the Company and / or the compa- nies or entities controlled by the Company (the «Subsidia- ries») and withdrawal from the Company;
    B. Strategic decisions:
  1. defining the strategic, economic, social, financial and scientific orientations of the Company;
  2. operations outside the strategy announced by the Company;
  3. significant development of related or derivative activi- ties, directly within the Company, or through subsidiaries controlled or not;
  4. the change in the normal business of the Company and its development strategy;
  5. any significant agreement to use patents or produc- tion licenses granted to third parties outside the ordinary course of business;
  6. any transfer, acquisition, contribution or exchange of assets of a unit amount exceeding three hundred thousand euros (€ 300,000);
  7. any investment in excess of three hundred thousand euros (€ 300,000);
  8. mergers, spin-offs, contributions, partnerships, joint ventures or similar significant transactions;
  9. transfer and relocation of the Company's registered office outside France, cross-border merger or conversion

of the Company into a European company;

  1. additional indebtedness, modification, refinancing of a loan amounting to more than three hundred thousand euros (€ 300,000);
  2. significant change in the accounting rules and prin- ciples applied by the Company;
  3. the hiring, firing and alteration of employment contracts (including the remuneration) of any employee who has an executive function (ie medical director, director of ope- rations, sales manager and administrative director and financial director);
  4. selection of advisers and intermediaries in strategic decision-making and remuneration;

C. Regulated agreements and related party agreements (approval and annual review of contracts in progress);

D. Titles:

  1. issue of any securities giving access, immediately or in the future, to 5% or more of the share capital of the Company;
  2. transfer of securities of subsidiaries to third parties or subscription or acquisition of securities issued by an entity other than a subsidiary;

E. Any proposal to the general meeting of shareholders relating to the policy of dividend distribution, redemption of shares or other payments or distribution to shareholders;

F. Adoption and modification of the annual budget, approval and modification of the business plan;

G. Any commitment exceeding three hundred thousand euros (€ 300,000);

H. Remuneration and profit-sharing of officers in respect of their mandate or employment contract (including any stock option plans, bonus shares or other similar arrange- ments) on the proposal of the appointments and compensation committee;

I. Appointment and dismissal of the officers, the administrative and financial director, the scientific director and the medical director;

J. Decision of commitment or transaction relating to a dispute of more than two hundred and fifty thousand euros (250,000 €);

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K. Site closure; adoption of a plan to safeguard employment;

L. Appointment of statutory auditors and substitutes;

M. Subscription of any loan or advance to acquire securities of any subsidiary company except in the event that such subsidiary is wholly or partly owned by the Company; and

N. Granting of guarantees, endorsements or guarantees for the benefit of third parties (including for the benefit of a subsidiary) or granting of security rights to guarantee debts of the Company,

being specified that:

  • one of the aforementioned decisions that would have been foreseen within the annual budget in a precise man- ner will not have to be approved again when it is imple- mented; and
  • decisions A to E shall be adopted by a majority of (i) half of the directors on first notice and (ii) one - half of the directors present or represented on second call.

For a detailed description of the provisions governing the functioning of the board of directors and the general management, please refer to Paragraph 5.4.2 « Provisions of the articles, a charter or a regulation of the Company regarding members of the board of directors and of the general management ».

4.4.5 independent directors

The Company has five independent directors: Henri Lach- mann, Jean-Luc Lemercier, Michael Mack and Pierre Bas- tid, and the company Santé Holdings SRL; the Company believes that since their appointment they have met the criteria of the AFEP-MEDEF code of December 2008 (as amended in June 2018), that is:

  • not be (directly or indirectly) a significant customer, supplier or banker of the Company or its group or for which the Company or its group represents a signifi- cant part of the business;
  • have no close family ties with a corporate officer;
  • have not been an auditor of the Company during the last five years;
  • not be or have been in the past five years:
    • employee or director of the Company (the chairman of the Board may be considered as independent if the Company justifies it) or of a group company;
    • director of another company in which the Company directly or indirectly holds a mandate or in which an employee or a director of the Company (present or having been less than five years) holds a mandate;
  • have not been a member of the Board of the Company for more than twelve years;
  • not to be a reference shareholder of the Company or of its parent company exercising control or controlling interest in the Company (Beyond a 10% holding, the Board must consider the independence with regard to the composition of the capital and the existence of potential conflicts of interest).

4.4.6 Internal control

At the date of this registration document, the Company had internal control procedures, in particular in the admi- nistrative, accounting, and financial areas, so as to meet its strategic objectives.

Upon Regulation No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (the so-called MAR Regulation), CARMAT must also, like companies listed on a regulated market, establish and maintain the list of persons who have access to privileged information concerning them.

CARMAT has put in place a code of ethics in order to sensitize all the company's managers and employees, third parties having access to privileged information as well as the persons with whom they are in and to prevent any improper use or disclosure of inside information.

The Board of Directors of 12 December 2016 adopted this code of ethics, which was previously revised by the Audit Committee.

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4.5 COMPENSATION AND BENEFITS OF DIRECTORS AND MANAGEMENT

4.5.1 Compensation and benefits in kind granted

to managers and directors

Table 1: Summary table of compensation and options, warrants and bonus shares awarded to each executive officer (in euros):

As a reminder, CARMAT announced on December 3, 2018 the cooptation of Mr. Jean-Pierre Garnier to the Board of Directors of the Company in replacement of Mr. Jean-Claude Cadudal, Chairman of the Board of Directors resigned, for the remainder of the mandate and his appointment as Chairman of the Board. The appointment of Mr. Jean-Pierre Garnier was ratified by the general meeting of March 28, 2019.

Jean-Claude Cadudal - Chairman of the Board of

FY 2018

FY 2019

Directors (till December 3, 2018)

Annual compensation (detailed in table 2)

62,551

-

Value of multiannual variable compensation awarded during the FY

-

-

Value of options and warrants awarded during the FY (detailed in table 4)

-

-

Value of bonus shares awarded for the FY (detailed in table 6)

-

-

TOTAL

62,551

-

Jean-Pierre Garnier - Chairman of the Board of

FY 2018

FY 2019

Directors (since December 3, 2018)

Annual compensation (detailed in table 2)

8,333

100,000

Value of multiannual variable compensation awarded during the FY

-

-

Value of options and warrants awarded during the FY (detailed in table 4)

144,900 *

0 **

Value of bonus shares awarded for the FY (detailed in table 6)

-

-

TOTAL

153,233

100,000

*: 46,000 stock options granted in December 2018, subject to conditions, with an exercise price of €20.35. Taking into account the price of the CARMAT share at December 31, 2018, ie €23.50, the potential capital gain relating to these stock options was €144,900 at December 31, 2018.

  • : 46,000 stock options granted in April 2019, subject to conditions, with an exercise price of €22.70. Taking into account the price of the CARMAT share at December 31, 2019, ie €19.28, the potential capital gain relating to these stock options was zero at December 31, 2019.

Stéphane Piat - Chief executive officer

FY 2018

FY 2019

Annual compensation (detailed in table 2) *

599,298

621,805

Value of multiannual variable compensation awarded during the FY

-

-

Value of options and warrants awarded during the FY (detailed in table 4)

-

-

Value of bonus shares awarded for the FY (detailed in table 6) **

3,598,438

1,083,343

TOTAL

4,197,736

1,705,148

*: benefits in kind included. Mr. Stéphane Piat did not benefit from any increase in his fixed compensation in 2019. He benefits from variable compensation (based on objectives approved by the Board of Directors), the maximum % of which was increased in 2019 from 45 % to 50%. The % achievement of objectives for 2019 has been set at 98% by the compensation committee.

**: the free shares granted in 2018 and 2019 are subject to performance conditions. Their values at December 31, 2018 and December 31, 2019 correspond to the estimate made by the Company of the probability of achievement of the criteria. At least 10% of the number of ordinary shares resulting from the conversion of the preferential shares granted free of charge to Mr. Stéphane Piat must be held in registered form until the termination of his office as CEO of the Company. To the best of the Company's knowledge, no hedging instrument is put in place.

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Table 2: Summary table of the compensation of each executive officer (in euros):

Jean-Claude Cadudal - Chairman of the

FY 2018

FY 2019

Board of Directors

Amounts

Amounts

Amounts

Amounts

(till December 3,2018)

due *

paid **

due *

paid **

Fixed remuneration

-

-

-

-

Variable remuneration

-

-

-

-

Special remuneration

-

-

-

-

Directors' fees

62,551 ***

62,551 ***

-

-

Benefits in kind

-

-

-

-

TOTAL

62,551

62,551

-

-

  • : For the financial year.
  • : During the financial year, including the previous year.
  • : At the meeting of December 19, 2013, the Board decided that, to comply with the applicable regulations, the remuneration of its chairman would be treated for tax and social security purposes as wages. This amount was raised to €62,551 in 2018.

Jean-Pierre Garnier - Chairman of the

FY 2018

FY 2019

Board of Director

Amounts Amounts Amounts Amounts

(since December 3, 2018)

due *

paid **

due *

paid **

Fixed remuneration ***

8,333

-

100,000

53,653

Variable remuneration ***

-

-

-

-

Special remuneration

-

-

-

-

Directors' fees

-

-

-

-

Benefits in kind

-

-

-

-

TOTAL

8,333

-

100,000

53,653

* : For the financial year.

** : During the financial year, including the previous year.

  • : under a contract of employment as US Business Development Manager. Mr. Jean Pierre Garnier receives fixed compensation but no variable compensation or any other advantage. He did not benefit from any increase in his compensation in 2019.

FY 2018

FY 2019

Stéphane Piat - Chief executive officer

Amounts

Amounts

Amounts

Amounts

due *

paid **

due *

paid **

Fixed remuneration ***

408,744

408,744

411,743

411,743

Variable remuneration ***

185,284

160,912

202,269

176,946

Special remuneration

-

-

-

-

Directors' fees

-

-

-

-

Benefits in kind

5,270

5,270

7,793

7,793

TOTAL

599,298

574,926

621,805

596,482

* : For the financial year.

** : During the financial year, including the previous year.

***: Mr. Stéphane Piat did not benefit from any increase in his fixed compensation in 2019. He benefits from variable compensation (based on objectives approved by the Board of Directors), the maximum % of which was increased in 2019 from 45% to 50%. The % achievement of objectives for 2019 has been set at 98% by the compensation committee.

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4

corporate governance

Table 3: Directors' fees and other compensation allocated to non-executive officers

FY 2018

FY 2019

Professor Alain Carpentier - Director til March 28, 2019

Director's fees

6,000

1,500

Other compensation

-

-

Truffle Capital - Director

Director's fees

7,500

7,500

Other compensation

-

-

Airbus Group - Director *

Director's fees

7,500

4,500

Other compensation

-

-

Henri Lachmann - Director

Director's fees

7,500

7,500

Other compensation

-

-

Pierre Bastid - Director

Director's fees

6,000

7,500

Other compensation

-

-

Santé Holdings SRL - Director

Director's fees

7,500

6,000

Other compensation

-

-

Jean-Luc Lemercier - Director

Director's fees

10,000

12,500

Other compensation

-

-

Michael Mack - Director

Director's fees

28,390

22,839

Other compensation

-

-

  • Karl Hennessee replaced Anne-Pascale Guédon as permanent representative of Airbus Group on the CARMAT Board of Directors on June 6, 2019.

Table 4: Share subscription or share purchase options awarded to each executive officer during the year ended December 31, 2019

Hereafter is a summary of the option plans granted to Jean-Pierre Garnier during the 2019 financial year:

Plan #

Number

General

Type of

Value of the

of options

Exercise

Exercise

and

conditions

securities

options

granted during

price

period

plan date

of exercise

the year

2019 Stock

Till March 31,

Option Plan

Stock options

Note 1

46,000

€22.70

Note 2

2029

April 1, 2019

Note 1: 46,000 stock options granted in April 2019, with an exercise price of €22.70. Given the CARMAT share price at December 31, 2019, ie €19.28, the potential capital gain relating to these stock options was zero at December 31, 2019.

Note 2: the options can be exercised in installments of 1/36 each month after January 1, 2019, and in any event no later than 10 years after their date of allocation to the beneficiary.

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Table 5: Share subscription or share purchase options exercised by each executive officer during the year ended December 31, 2019

Hereafter is a summary of the options exercised by Jean- Claude Cadudal during the 2019 fiscal year, it being recalled that he was President of the Board and Director of CARMAT until December 3, 2018:

Plan #

Exercise year of

Number of options

and

Exercise price **

the options

exercised

plan date

BSA 2009-1

2019 fiscal year

904

€8.00

July 8, 2009

* one BSA warrant gives right to 25 new CARMAT shares. ** price per new share subscribed

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108

document registration Universal 2019

Shares granted

Maximum num-

ber of ordi-

Perfor-

free of charge to

Plan #

Category and

Final

Conver-

nary shares to

Value of the

Date of

mance

each corporate

and

number of AGAP

acquisi-

tibility

which the AGAP

shares *

grant

condi-

officer by the

plan date

granted

tion date

period

granted are

tions

issuer

entitled

2019

Stéphane Piat

AGAP Plan

Chief Executive Officer

April 1, 2019

including AGAP

2,640

26,400

€254,496

From April 1,

2019-01

April 1,

April 1,

2022 till

See section

including AGAP

2,640

26,400

€305,395

2019-02

2019

2020

June 30,

5.2.5

2027

including AGAP

1,320

13,200

€127,248

2019-03

2019

Stéphane Piat

AGAP Plan

Chief Executive Officer

Sep. 23, 2019

including AGAP

1,800

18,000

€173,520

From Sep.

2019-01

including AGAP

1,800

18,000

€208,224

Sep. 23,

Sp. 23,

23 2022 till

See section

2019-02

2019

2020

October 31,

5.2.5

2027

including AGAP

150

1,500

€14,460

2019-03

TOTAL

10,350

103,500

€1,083,343

  • the free shares granted during the financial year are subject to performance conditions. Their values on December 31, 2019 correspond to the CARMAT share price on this date (ie €19.28) and to the estimate made by the Company of the probability of achievement of the criteria. At least 10% of the number of ordinary shares resulting from the conversion of the preferential shares granted free of charge to Mr. Stéphane Piat must be held in registered form until the termination of his office as CEO of the Company. To the best of the Company's knowledge, no hedging instrument is implemented.

December ended year theduring

to awarded shares Free 6:Table

4

2019 31,

officer executive each

corporate

governance

CARMAT

4

corporate governance

Table 7: Free shares awarded to each executive officer which became freely disposable during the year ended December 31, 2019

Plan #

Category and number of

Maximum number of

Executive

ordinary shares to

Convertibility

and

AGAP that became

officer name

which the acquired

conditions

plan date

available *

AGAP are entitled **

2018 AGAP

Stéphane Piat

Plan

Chief Executive Officer

April 16, 2018

AGAP 2018-01

500

50,000

See sections 5.2.5

AGAP 2018-02

7,500

150,000

and 5.4.3

TOTAL

8,000

200,000

* these are AGAP definitively acquired during the 2019 financial

year. These AGAP will be convertible into ordinary shares during the

convertibility period depending on the achievement of performance criteria (see Sections 5.2.5 and 5.4.3 ).

** assuming 100% achievement of performance criteria.

Table 8: Historic table of share subscription or share purchase options awarded (concerning executive or non-executive directors)

Table 8 - Part 1BCE-2009-1 BCE-2009-2BCE-2012-1BCE-2012-2BSA-2009-1

Date of the board meeting

September 9,

July 8,

June 27,

November 8,

July 8,

2009

2009

2012

2012

2009

Number of shares that can be subscribed or

77,700

189,150

56,500

6,700

77,400

acquired

Many of which can be subscribed to or

acquired by corporate officers (managers and

77,700

0

4,000

0

64,750

non-managers)

Jean-Luc Lemercier *

Michael Mack *

Jean-Pierre Garnier *

Marcello Conviti **

77,700

4,000

Jean-Claude Cadudal **

38,850

Michel Finance **

12,950

André Ballester **

12,950

Starting point for exercising options

September 9,

July 8,

June 27,

November 8,

July 8,

2009

2009

2012

2012

2009

Exercise deadline

September 9,

July 8,

June 27,

November 8,

July 8,

2019

2019

2022

2022

2019

Subscription or purchase price

€8.00

€8.00

€108.483

€122.003

€8.00

Exercise conditions (when the plan includes

See note 3,

See section

See section

See section

See section

several tranches)

on the next page

5.2.5

5.2.5

5.2.5

5.2.5

Number of shares subscribed as at

77,700

111,875

0

0

63,500

December 31, 2019

Cumulative number of options

0

3,091 ***

45,000

0

556 ****

canceled or lapsed

Number of options remaining at year-end

0

0

11,500

6,700

0

  • Director on the date of publication of this document. ** Former Director of the Company.
  • ie 77,275 ordinary shares after adjustment resulting from the capital increase with preferential subscription rights performed in August 2011.
  • ie 13,900 ordinary shares after adjustment resulting from the capital increase with preferential subscription rights performed in August 2011.

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4

corporate governance

Table 8 - Part 2

BSA-2017- Board

Stock options - 2018

Stock options - 2019

Members

Date of the board meeting

May 15,

December 3,

April 1,

2017

2018

2019

Number of shares that can be subscribed or

12,000

46,000

46,000

acquired

Many of which can be subscribed to or

acquired by corporate officers (managers and

12,000

46,000

46,000

non-managers)

Jean-Luc Lemercier *

6,000

Michael Mack *

6,000

Jean-Pierre Garnier *

46,000

46,000

Marcello Conviti **

Jean-Claude Cadudal **

Michel Finance **

André Ballester **

Starting point for exercising options

May 15,

January 1,

January 1,

2017

2019

2019

Exercise deadline

May 15,

December 2, 2028

March 31,

2027

2029

Subscription or purchase price

€30.10 (1)

€20.35 (2)

€22.70 (2)

Exercise conditions (when the plan includes

See section

See section

See section

several tranches)

5.2.5

5.2.5

5.2.5

Number of shares subscribed as at

0

0

0

December 31, 2019

Cumulative number of options canceled or

0

0

0

lapsed

Number of options remaining at year-end

12,000

46,000

46,000

* Director on the date of publication of this document. ** Former Director of the Company.

Note 1: Price corresponding to the volume weighted average of the prices quoted at the 20 trading days preceding the date of the Board of Directors decision.

Note 2: share price (closing price) on Euronext Growth on the day preceding the Board of Directors decision.

Note 3: Note relative to BCE-2009-01:

General conditions of exer-

BCE-2009-1

cise reminder

- 25% of the BCE-2009-1 warrants may be exercised on the date of the first anniversary of the bene-

ficiary joining the Company, subject to his/her actual and continued presence within the Company

at that date;

- 75% of BCE-2009-1 warrants may be exercised on the basis of monthly periods in tranches of

1/36th from the date of the first anniversary of the beneficiary joining the Company over a period

of three years, subject to his/her actual and continued presence within the Company at that date.

General conditions of exercise

Early exercising in the event of a share transfer agreement being entered into, with or without condi-

tions precedent, resulting in a change in control of the Company to the benefit of the transferee on

the basis of a valuation in excess of €100 million.

As a result of the success of the initial listing of the Company on the Alternext market of Euronext Paris, according to the assessment of the meeting of the board of directors of September 8, 2010, 20% of BCE-2009-1 warrants that were not exercisable as at the date of the initial listing may be exercised early.

* : after adjustments resulting from the increase in capital with preferential subscription rights performed in August 2011.

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Table 9: Options to subscribe or purchase shares granted to the top ten beneficiaries, employees who are not direc- tors, and options exercised by them

Options granted to the top ten benefi-

Total number of

Weighted average

ciaries, employees who are not direc-

options granted /

including :

price to subscribe

tors, and options exercised by them,

shares subscribed or

BCE-2009-02

1 new share

including BSA, BSAR, BSPCE, ...

purchased

Options granted during the fiscal year by the issuer

to the top ten beneficiaries, employees of the issuer,

n / a

n / a

n / a

the number of options thus granted is the highest

(global information)

Options held on the issuer exercised during the

fiscal year by the top ten beneficiaries, employees

1,245 *

€8.00

1,245 *

of the issuer, whose number of options purchased or

subscribed is the highest (global information)

  • one option gives right to 25 new shares, parity after adjustment consecutive to the capital increase with preferential subscription right perfor- med in August 2011.

Table 10: Historic table of free shares awarded (global information)

2017 AGAP plans

2017 AGAP plans

Category of AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

2017-01

2017-02

2017-03

2017-01

2017-02

2017-03

Date of the board meeting

May 15, 2017

September 25, 2017

Total number of AGAP awarded

270

1,800

3,180

50

200

310

free of charge

Including number of AGAPs allocated to bene-

180

1,000

1,720

0

0

0

ficiary directors

Stéphane Piat - Chief Executive Officer

180

1,000

1,720

0

0

0

and Director

Final acquisition date

May 15, 2018

September 25, 2018

Convertibility period into

From May 15, 2020 till

From September 25, 2020 till

ordinary shares *

May 15, 2025

September 25, 2025

End date of lock-up

May 15, 2020

September 25, 2020

period

Number of shares (AGAP) acquired

270

1,800

3,180

50

200

310

definitively as at December 31, 2019

Cumulative number of shares (AGAP)

0

0

0

0

0

0

lapsed or canceled (total)

Cumulative number of shares (AGAP)

0

0

0

0

0

0

lapsed or canceled (directors)

Number of shares (AGAP) remaining to be

0

0

0

0

0

0

acquired definitively as at December 31, 2019

* see Section 5.2.5 for the conversion ratios into ordinary shares, and associated performance conditions.

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112

2018

4

plans AGAP

document registration Universal 2019

2018 AGAP plans

Category of AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

2018-01

2018-02

2018-03

2018-01

2018-02

2018-03

2018-01

2018-02

2018-03

Date of the board meeting

April 16, 2018

September 27, 2018

February 11, 2019

Total number of AGAP awarded

580

1 1,500

0

0

0

370

0

0

370

free of charge

Including number of AGAPs allocated to bene-

580

7,500

0

0

0

0

0

0

0

ficiary directors

Stéphane Piat - Chief Executive Officer

500

7,500

0

0

0

0

0

0

0

and Director

Final acquisition date

April 16, 2019

September 27, 2019

February 11, 2020

Convertibility period into

From April 16, 2021 till April 16, 2026

From September 27, 2021 till

From February 11, 2022 till May 11, 2027

ordinary shares *

September 27, 2026

End date of lock-up

April 16, 2021

September 27, 2021

February 11, 2022

period

Number of shares (AGAP) acquired

580

10,350

0

0

0

370

0

0

0

definitively as at December 31, 2019

Cumulative number of shares (AGAP)

0

200

0

0

0

0

0

0

0

lapsed or canceled (total)

Cumulative number of shares (AGAP)

0

0

0

0

0

0

0

0

0

lapsed or canceled (directors)

Number of shares (AGAP) remaining to be

0

950

0

0

0

0

0

0

370

acquired definitively as at December 31, 2019

* see Section 5.2.5 for the conversion ratios into ordinary shares, and associated performance conditions.

governance corporate

CARMAT

CARMAT

document registration Universal 2019

plans AGAP 2019

2019 AGAP plans

Category of AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

AGAP

2019-01

2019-02

2019-03

2019-01

2019-02

2019-03

2019-01

2019-02

2019-03

Date of the board meeting

April 1, 2019

September 23, 2019

December 2, 2019

Total number of AGAP awarded

4,760

4,760

2,380

2,240

2,240

220

1,000

1,000

1,000

free of charge

Including number of AGAPs allocated to bene-

2,640

2,640

1,320

1,800

1,800

150

0

0

0

ficiary directors

Stéphane Piat - Chief Executive Officer

2,640

2,640

1,320

1,800

1,800

150

0

0

0

and Director

Final acquisition date

April 1, 2020

September 23, 2020

December 2, 2020

Convertibility period into

From April 1, 2022 till June 30, 2027

From September 23, 2022 till

From December 2, 2022 till January 1, 2028

ordinary shares *

October 31, 2027

End date of lock-up

April 1, 2022

September 23, 2022

December 2, 2022

period

Number of shares (AGAP) acquired

0

0

0

0

0

0

0

0

0

definitively as at December 31, 2019

Cumulative number of shares (AGAP)

120

120

60

0

0

0

0

0

0

lapsed or canceled (total)

Cumulative number of shares (AGAP)

0

0

0

0

0

0

0

0

0

lapsed or canceled (directors)

Number of shares (AGAP) remaining to be

4,640

4,640

2,320

2,240

2,240

220

1,000

1,000

1,000

acquired definitively as at December 31, 2019

* see Section 5.2.5 for the conversion ratios into ordinary shares, and associated performance conditions.

4

governance corporate

113

4

corporate governance

Table 10bis: Free shares granted to the top ten beneficia- ries, employees who are not directors, and shares which became freely available to them

Free shares granted to

Total number

the top ten beneficiaries,

of free shares

including:

including:

including:

including:

including:

including:

employees who are not

(AGAP) granted

directors, and shares which

/ free shares

AGAP

AGAP-

AGAP-

AGAP-

AGAP-

AGAP-

2019-01

2019-02

2019-03

2018-01

2018-02

2018-03

became freely available to

(AGAP) became

them

available

Free shares (AGAP) * granted during

the fiscal year by the issuer to the

top ten beneficiaries, employees of

9,420

3,480

3,480

2,090

370

the issuer, whose number of shares

thus granted is the highest (global

information)

Free shares (AGAP) ** on the issuer

that became available during the

fiscal year, for the top ten benefi-

ciaries, employees of the issuer,

3,975

80

3,525

370

whose number of shares that have

thus become available is the highest

(global information)

  • see to sections 5.2.5 and 5.4.3 for the characteristics and performance conditions attached to AGAP.
  • these are AGAP acquired definitively during the fiscal year. These AGAP will be convertible into ordinary shares during the convertibility period depen- ding on the achievement of performance criteria (see Sections 5.2.5 and 5.4.3).

Table 11: Clarification regarding the terms of compensation and other benefits granted to executive officers:

The chief executive officer and the directors do not enjoy any particular retirement benefits, severance payments due when they leave office, or non-competition payments.

Allowances or bene-

Employment

Supplementary

fits due or likely to be

Executive officers

contract

pension scheme

due upon severance

or change in role

Yes

No

Yes

No

Yes

No

Allowances connected to a non-competition clause

Yes No

Jean-Pierre Garnier,

X *

X

X

X

chairman of the Board

Start date of office

December 3, 2018

End date of office

At the end of the annual general meeting approving the financial statements for the

year ended December 31, 2021

Stéphane Piat,

X

X

X

X

chief executive officer

Start date of office

August 29, 2016

End date of office

Indefinite period

  • : under a contract of employment as US Business Development Manager from December 3, 2018. Mr. Jean Pierre Garnier receives fixed compensation but no variable compensation or any other advantage. He did not benefit from any increase in his compensation in 2019.

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corporate governance

4.5.2sums set aside or determined by the

Company for the payment of pensions, retirement or other benefits for the management and directors

The Company has not signed a specific agreement on retirement commitments. These are therefore limited to the agreed retirement lump-sum payment.

In application of the reference method (ANC 2018-01), the provision for retirement commitments has been accounted for as at December 31, 2019.

Refer to the annex 3.2.2.6 within the financial statements.

The overall provision for managers stands at €23,531 at the end of the 2019 fiscal year.

4.5.3Share subscription warrants (BSA), start-up

company stock warrants (BCE) and stock options assigned to management and directors

As at December 31, 2019, the following table shows all non-lapsed share subscription warrants (BSA), start-up company stock warrants (BCE) or stock options issued by the Company to its corporate officers and managers and not exercised by the beneficiaries as at the date of this universal registration document:

Holder / number of shares *

BSA-2017-Board

Stock options

Stock options

members

2018

2019

Jean-Pierre Garnier

Chairman of the Board of Directors from

-

46,000

46,000

December 3, 2018

Jean-Luc Lemercier

6,000

-

-

Director

Michael Mack

6,000

-

-

Director

* see Section 5.2.5 for details of the conditions of these BSA and stock options

4.5.4Statement on service contracts

There is no service contract binding the members of the Board of Directors or management of the Company and providing for the granting of benefits under such a contract, with the exception of those mentioned in section 5.6 (« Regulated agreements and commitments »).

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corporate governance

4.6 STAFF

and organization

4.6.1 Human

resources

Operational structure

As at December 31, 2019, the operational structure of the

Company was as follows:

General

management

Marketing

Manu-

Quality

Human

Adminis-

Development

Medical

R&D

department

trative and

and Training

facturing

resources

department

management

management

& Regulatory

Finance

department

department

department

affairs

management

Clinical

Scientific

Regulatory

Finance

support

affairs

affairs

Clinical

Quality

IT services

affairs

Number and breakdown of staff

At at December 31, 2019, the Company's workforce numbered 107 people, including 4 temporary workers ; all members of staff are employed under permanent employment contracts.

The Company's workforce increased by 17 employees in 2019, including the hiring of a new Industrial Director (Mr. Alexandre Eléonore).

For specific services within the framework of certain stages of the development of the bioprosthetic artificial heart project, the Company uses different external suppliers.

As at December 31, 2019, there were 60 of them, including approximately twenty in R&D and fifteen in Production.

Changes in

December

December

December

workforce at

31, 2019

31, 2018

31, 2017

Managers

80

66

48

Non-management

23

21

15

Trainies

4

3

7

TOTAL

107

90

70

Human Resources Policy

Staff management is of considerable importance to the company. In fact, the Company must have qualified employees available with strong skill sets since the business of CARMAT relies to a significant extent on the quality and effectiveness of its members of staff. The company believes that it has good staff relations.

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The workforce at December 31, 2019 was made up of 39 women and 68 men. The average age of the salaried workforce was 40. During the 2019 fiscal year, the Company financed approximately 1,100 hours of training.

The company applies the National Collective Agreements of the « Metallurgical Industries: workers, employees, technicians, and supervisors » and the « Metallurgical Industries: engineers and managers », as well as the Regional Collective Agreement of the « Metallurgical Industries: workers, employees, technicians, and supervisors of the Paris Region ». There are no company agreements other than the rules of procedure.

Standard contracts of employment contain no clauses

relating to breach of the contract of employment or to undertakings relating to non-competition and non-solicitation (staff and/or customers).

All members of staff of the Company benefit, in addition to their basic salary, from a potential annual bonus subject to achieving quantitative and qualitative targets set in advance by the board of directors of the Company and individual targets agreed in advance with the line mana- ger. The amount of this bonus is limited to a percentage of the gross annual salary.

The working week at the company is 35 hours for non-managers and with a fixed number of days (218) per year for managers.

4.6.2Interests and share options held by members

of the management and supervisory bodies and by employees

The history of the allocation of stock options and stock warrants to the various corporate officers of the Company, as well as the options and warrants they exercised during the 2019 fiscal year, are detailed in section 4.5.1.

The history of the allocation of free shares (preferential shares subject to performance conditions) to the various corporate officers, as well as the free shares that became available during the 2019 fiscal year, are detailed in section 4.5.1.

As of December 31, 2019, to the knowledge of the Com- pany, Stéphane Piat (Chief Executive Officer and Direc- tor) held 10,900 shares of the Company (i.e. 0.09% of the

share capital). The other current directors of CARMAT do not hold any shares in the Company.

Certain employees of the Company are beneficiaries of the stock options, share subscription warrants (BSA and BSPCE) and free shares (preferential shares subject to performance conditions), detailed in section 5.5.1.

Table 9 in section 4.5.1 specifies the number of stock options granted to the first ten beneficiaries, employees who are not corporate officers, and the options exercised by them during the 2019 fiscal year.

Table 10bis in section 4.5.1 specifies the number of free shares (subject to performance conditions) allocated to the first ten beneficiaries, employees who are not corporate officers, and that of the free shares that became available to them during the 2019 fiscal year.

4.6.3Employee ownership and profit sharing schemes

As at the date of this universal registration document, the Company had not set up any employee ownership or profit sharing schemes.

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information on the

company and its

capital

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legal

5.1 structure

5.1.1 name

registered

The Company's registered name is: "CARMAT".

5.1.2 Place and number of the company's registration

The Company is registered in the Versailles Trade and

Companies Register under number 504 937 905.

Its LEI (Legal Entity Identifier) number is as follows: 96 95 0 0 ARXAC M0P0 KH333.

5.1.3 and term

registered on June 30, 2008 for a term of 99 years, sub-

date of incorporation

The Company was incorporated on June 25, 2008 and

ject to any extension or early dissolution.

5.1.4 Registered address, legal form and applicable law

The Company's registered office is located at 36, avenue de l'Europe - Immeuble l'Etendard-Energy III - 78140

Vélizy-Villacoublay (phone number: +33 1 39 45 64 50). The Company is a corporation (société anonyme) under French law with a single board of directors, and is governed especially by the provisions of Book II of the French Commercial Code.

5.1.5 the Group

Organization of

The Company is not part of a group.

Subsidiaries and

The Company has no subsidiaries or shareholdings.

5.1.6 shareholdings

5.2 share capital

5.2.1 value of the share capital

As at December 31, 2019, the fully paid-up share capital amounted to €504,385.96, divided into 12,609,649 shares with a par value of €0.04 each, including:

  • 12,592,539 ordinary shares,
  • 320 preferential shares of category 2017-01,
  • 2,000 preferential shares of category 2017-02,
  • 3,490 preferential shares of category 2017-03,
  • 580 preferential shares of category 2018-01,
  • 10,350 preferential shares of category 2018-02,
  • 370 preferential shares of category 2018-03.

The general meeting of 27 April 2017 decided to introduce within article 12.2 of the Company's Articles of Association three categories of preferential shares convertible into ordinary shares governed by articles L. 228-11 et seq. Code of Commerce respectively named

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  • AGAP 2017-01 », « AGAP 2017-02 » and « AGAP 2017-03 » (hereinafter together referred to as the « Prefe- rential Shares - 2017 »).

Preferential Shares - 2017 are subject to vesting and holding periods and performance criteria to enable their conversion into Ordinary Shares, as described in section 5.2.6 of the universal registration document.

In the same way, the general meeting of 5 April 2018 decided to introduce within article 12.2 of the Company's Articles of Association three new categories of preferential shares convertible into ordinary shares respectively named « AGAP 2018-01 », « AGAP 2018-02 » and « AGAP 2018-03 » (hereinafter together referred to as the « Preferential Shares - 2018 »).

Preferential Shares - 2018 are also subject to vesting and holding periods and performance criteria to enable their conversion into Ordinary Shares, as described in section 5.2.6 of the universal registration document.

Finally, the general meeting of 28 March 2019 decided to

introduce within article 12.2 of the Company's Articles of Association three new categories of preferential shares respectively called « AGAP 2019-01 », « AGAP 2019-02 » and « AGAP 2019-03 » (hereinafter together referred to as the « Preferential Shares - 2019 »).

Preferential Shares - 2019 are also subject to vesting and holding periods and performance criteria to enable their conversion into Ordinary Shares, as described in section 5.2.6 of this document.

The allocations of Preferential Shares 2017, 2018 and 2019 are detailed in section 4.5 of this document. As of December 31, 2019, taking into account the required acquisition periods, the following were definitively issued:

  • 320 preferential shares of category 2017-01,
  • 2,000 preferential shares of category 2017-02,
  • 3,490 preferential shares of category 2017-03,
  • 580 preferential shares of category 2018-01,
  • 10,350 preferential shares of category 2018-02,
  • 370 preferential shares of category 2018-03.

securities not

As at the date of this registration document, there were no

5.2.2representing capital

securities not representing capital.

Pledges, guarantees

As at the date of this registration document, and to the

5.2.3and collateral

best of the Company's knowledge, there exist no pledges,

guarantees or collateral taken on the Company's equity.

5.2.4Acquisition by the company of its own shares

As at December 31, 2019, the Company held 4,170 treasury shares, representing 0.03% of its share capital.

The combined general meeting of March 28, 2019, authorized the implementation by the board of directors of an 18-month program to buy back company shares, starting from the meeting, pursuant to the provisions of Article L.225-209 of the French Commercial Code and in compliance with the General Regulation of the French Financial Markets Authority (AMF). The main terms of this authorization are the following:

sold during the period of authorization.

Objectives of the share buyback program:

  • to ensure the liquidity of the shares of the Company as part of a liquidity contract to be signed with an invest- ment services provider, in accordance with a code of ethics recognized by the French Financial Markets Authority;
  • to honor the obligations linked to stock option purchase programs, bonus share allocations, employee savings or other allocations of shares to employees and mana- gers of the Company or affiliated companies;

Number of shares that can be purchased:10% of the share capital on the date of the buyback. When shares are acquired in order to promote the trading and liquidity of shares, the number of shares taken into account to determine the 10% limit referred to above corresponds to the number of shares purchased, less the number of shares

to deliver shares when the rights attached to securities giving access to capital are exercised;

to purchase shares for keeping and later delivery or exchange or payment as part of possible acquisitions;

to cancel all or a portion of the shares bought back

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accordingly;

  • or more generally, to operate for any objective that would be authorized by law or any market practice that would be authorized by market authorities, with the understanding that in such an event, the Company would inform its shareholders in a press release.

Maximum purchase price:€240, excluding any fees and commissions and adjustments in order to account for capital transactions.

It is specified that the number of shares acquired by

the Company to keep and later deliver as payment or in exchange as part of a merger, demerger or contribution transaction cannot exceed 5% of its capital.

Maximum amount of funds that can be used to buy back shares:€5,000,000

The shares bought back can be canceled up to a limit of 10% of the share capital every 24 month period.

5.2.5other securities giving access to capital

As at December 31, 2019, the exercise or the conversion of all securities giving access to capital would allow the subscription of 1,314,700 new ordinary shares representing 10.44% of the current issued share capital and 9.45% of share capital after issue of these new ordinary shares.

Thus, the size of the holding of a shareholder holding 1% of the current share capital would reduce to 0.91% if the rights to all these securities were exercised.

Refer to the table below:

Type of security

Number of new ordinary shares that may be created

(as at December 31, 2019)

Incentive instruments for the management, consul-

tants and board members

- BCE-2009-2

0

- BCE-2012-1

11,500

- BCE-2012-2

6,700

- BSA-2009-1

0

- BSA-2017-Board members

12,000

- BSA-2018-Consultant

10,000

- BSA-2019-Consultant

6,000

- Stock options-2018

46,000

- Stock options-2019

46,000

- Preferential shares - 2017

421,000

- Preferential shares - 2018

301,500

- Preferential shares - 2018

193,000

---------------------

Total incentive instruments

1,053,700

Financing tool

- BSA Kepler Cheuvreux Tranche 1 & 2

261,000

---------------------

Total financing instruments

261,000

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The tables below detail all the securities giving access to the issued capital of the Company, granted and in effect as at December 31, 2019, allowing the subscription of 1,314,700 new Ordinary Shares.

START-up company stock warrants (bce)

Type of security

BCE-2009-2

Number of BCE warrants issued and allocated

7,566 *

Number of BCE warrants lapsed

3,091 *

Number of BCE warrants exercised

4,475 *

Balance of BCE warrants to be exercised

0

Date of the general meeting

July 8, 2009

Date of the meeting of the board of directors

July 8, 2009

Exercise price per new share subscribed

€8

BCE warrant exercise deadline

Ten years from the date of the allocation of the BCE warrants

Ratio

1 BCE-2009-2 warrant for 25 new CARMAT shares

- 20% of the BCE-2009-2 warrants may be exercised on the date of the

first anniversary of the beneficiary joining the Company, subject to his/her

actual and continued presence within the Company at that date;

- 40% of the BCE-2009-2 warrants may be exercised per completed mon-

thly period in tranches of 1/48th from the date of the first anniversary of

the beneficiary joining the Company;

- 10% of the BCE-2009-2 warrants may be exercised from the completion

and successful outcome of the initial clinical trials of the CARMAT total

artificial heart before the end of the second quarter of 2012 (medical report

on completion of the trial covering the safety and end point aspects),

subject to his/her actual and continued presence within the Company

at that date;

- 10% of the BCE-2009-2 warrants may be exercised after the successful

outcome of the first clinical implantation of the CARMAT total artificial

heart before the end of November 2012 (report from a third party), sub-

General conditions of exercise

ject to the actual and continued presence of the beneficiary within the

Company at that date;

- 6.5% of the BCE-2009-2 warrants may be exercised after the successful

outcome of the pivotal clinical trials of the CARMAT total artificial heart

(report from the scientific advisory committee), subject to his/her actual

and continued presence within the Company at that date;

- 6.5% of the BCE-2009-2 warrants may be exercised from the date on

which the CE marking is obtained for the CARMAT total artificial heart,

subject to actual and continued presence of the beneficiary within the

Company at that date;

- 7% of the BCE-2009-2 warrants may be exercised after completion at

December 31 of the first year of marketing of the CARMAT total artificial

heart, confirmed by the board of directors, in accordance with the expec-

tations in terms of revenue and gross profit margin set out in the business

plan drawn up by the general management and approved by the board of

directors, subject to the actual and continued presence of the beneficiary

within the Company at that date.

Number of new shares that may be subscribed

0

* : after adjustments resulting from the increase in capital with preferential subscription rights performed in August 2011.

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Type of security

BCE-2012-1

Number of BCE warrants issued and allocated

56,500

Number of BCE warrants lapsed

45,500

Number of BCE warrants exercised

0

Balance of BCE warrants to be exercised

11,500

Date of the general meeting

April 26, 2012

Date of the meeting of the board of directors

June 27, 2012

Exercise price per new share subscribed

€108,483

BCE warrant exercise deadline

Ten years from the date of allocation of the BCE warrants

Ratio

One BCE-2012-1 warrant for 1 new CARMAT share

- 50% of BCE-2012-1 warrants may be exercised on the basis of monthly periods

in tranches of 1/48th from the date on which the BCE-2012-1 options are awarded

to the beneficiary, subject to his/her actual and continued presence within the

Company at that date;

- 16.25% of BCE-2012-1 warrants may be exercised after the successful outcome

of the pivotal clinical trials of the CARMAT total artificial heart (report from the

scientific

advisory committee), subject to his/her actual and continued presence

within the Company at that date;

General conditions of exercise

- 16.25% of the BCE-2012-1 warrants may be exercised from the date on which the

CE marking is obtained for the CARMAT total artificial heart, subject to actual and

continued presence of the beneficiary within the Company at that date;

- 17.5% of the BCE-2012-1 warrants may be exercised after completion at

December 31 of the first year of marketing of the CARMAT total artificial heart,

confirmed

by the board of directors, in accordance with the expectations in terms

of revenue and gross profit margin set out in the business plan drawn up by the

general management and approved by the board of directors, subject to the actual

and continued presence of the beneficiary within the Company at that date.

Number of new shares that may be subscribed

11,500

Type of security

BCE-2012-2

Number of BCE warrants issued and allocated

6,700

Number of BCE warrants lapsed

0

Number of BCE warrants exercised

0

Balance of BCE warrants to be exercised

6,700

Date of the general meeting

April 26, 2012

Date of the meeting of the board of directors

November 8, 2012

Exercise price per new share subscribed

€122.003

BCE warrant exercise deadline

Ten years from the date of allocation of the BCE warrants

Ratio

One BCE-2012-2 warrant for 1 new CARMAT share

- 50% of BCE-2012-2 warrants may be exercised on the basis of monthly periods

in tranches of 1/48th from the date on which the BCE-2012-2 options are awarded

to the beneficiary, subject to his/her actual and continued presence within the

Company at that date;

- 16.25% of BCE-2012-2 warrants may be exercised after the successful outcome

of the pivotal clinical trials of the CARMAT total artificial heart (report from the

scientific

advisory committee), subject to his/her actual and continued presence

within the Company at that date;

General conditions of exercise

- 16.25% of the BCE-2012-2 warrants may be exercised from the date on which the

CE marking is obtained for the CARMAT total artificial heart, subject to actual and

continued presence of the beneficiary within the Company at that date;

  • 17.5% of the BCE-2012-2 warrants may be exercised after completion at December 31 of the first year of marketing of the CARMAT total artificial heart, confirmed by the board of directors, in accordance with the expectations in terms

of revenue and gross profit

margin set out in the business plan drawn up by the

general management and approved by the board of directors, subject to the actual

and continued presence of the beneficiary within the Company at that date.

Number of new shares that may be subscribed

6,700

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SHARE SUBSCRIPTION WARRANTS (BSA)

Type of security

BSA-2009-1

Number of BSA warrants issued and allocated

3,096 *

Number of BSA warrants lapsed

556 *

Number of BSA warrants exercised

2,540 *

Balance of BSA warrants to be exercised

0

Date of the general meeting

July 8, 2009

Date of the meeting of the board of directors

July 8, 2009

Exercise price per new share

€8

BSA warrant exercise deadline

Ten years from the date of allocation of the BSA warrants

Ratio

One BSA-2009-1 warrant for 25 new CARMAT shares

- 25% of the BSA-2009-1 warrants may be exercised on the date of the

first anniversary of the beneficiary joining the Company, subject to his/her

actual and continued presence within the Company at that date;

- 75% of BSA-2009-1 warrants may be exercised on the basis of monthly

periods in tranches of 1/36th from the date of the first anniversary of the

beneficiary joining the Company, subject to his/her actual and continued

presence within the Company at that date.

General conditions of exercise

Early exercise at the end of a period expiring 18 months after the esta-

blishment of the Company if the beneficiary has occupied the position

of chairman of the Company for a period expiring 18 months after the

establishment of the Company.

As a result of the success of the initial listing of the Company on the

Euronext Paris Alternext market, according to the assessment of the mee-

ting of the Company's board of directors of September 8, 2010, 20% of

the BSA-2009-1 warrants that were not exercisable as at the date of the

initial listing may be exercised early.

Number of new shares that may be subscribed

0

* : after adjustments resulting from the increase in capital with preferential subscription rights performed in August 2011.

The board of directors of December 3, 2018, acting on the departure of Mr. Jean Claude Cadudal, did modify the conditions of exercise of the BSA-2009-1, BSA which remained exercisable until July 8, 2019, even after the departure of his holder.

Type of security

BSA Kepler Cheuvreux - Tranches 1 & 2

(all exercisable by Kepler Cheuvreux)

Number of BSA warrants issued and allocated

400,000

Number of BSA warrants lapsed

0

Number of BSA warrants exercised

139,000

Balance of BSA warrants to be exercised

261,000

Date of the general meeting

April 5, 2018

Date of CEO's decision

September 27, 2018

Exercise price per new share

94% of the average volume-weighted trading price

BSA warrant exercise deadline

September 26, 2020, at the latest date

Ratio

One Kepler BSA warrant for one new CARMAT share

Number of new shares that may be subscribed

261,000

The Company has put in place a new flexible equity financing arrangement with Kepler Cheuvreux, as the previous one ended in July 2018. Signed in September 2018, this new framework agreement comprises up to two consecutive 12-month tranches, namely a first €12 million tranche beginning on the date of signing of the agreement followed by one tranche making the global amount (Tranche 1 + Tranche 2) of a total of €25 million.

Under this mechanism, Kepler Cheuvreux has made a firm and definitive commitment to purchase new shares under Tranches 1 & 2 for €25 million at times and intervals of its own choosing during the 24 months following the signature of said framework agreement, subject to compliance with the terms agreed upon by the two parties. The Company may terminate the agreement at any time. Kepler Cheuvreux does not intend to retain the shares subscribed under these arrangements, and will subsequently sell them to investors or on the open market.

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Type of security

BSA-2017-Board members

Number of BSA warrants issued and allocated for free

12,000

Number of BSA warrants lapsed

0

Number of BSA warrants exercised

0

Balance of BSA warrants to be exercised

12,000

Date of the general meeting

April 27, 2017

Date of the meeting of the board of directors

May 15, 2017

Exercise price per new share

€30.10

BSA warrant exercise deadline

May 15, 2027

Ratio

One BSA-2017-Board members warrant for one new CARMAT share

- up to 1,500 warrants will be exercisable from January 2, 2018;

General conditions of exercise

- up to 94 additional warrants will be exercisable from each month starting

on January 2, 2018, ie from February 2, 2018 for the first tranche, it being

specified that the last tranche will be limited to 82 warrants.

Number of new shares that may be subscribed

12,000

Type of security

BSA-2018-Consultant

Number of BSA issued and subscribed at €3.14 / BSA

10,000

Number of BSA warrants lapsed

0

Number of BSA warrants exercised

0

Balance of BSA warrants to be exercised

10,000

Date of the general meeting

April 5, 2018

Date of the meeting of the board of directors

June 11, 2018

Exercise price per new share

€20.93

BSA warrant exercise deadline

June 11, 2028

Ratio

One BSA-2018-Consultant warrant for one new CARMAT share

- up to 2,500 warrants will be exercisable after each 12 months period star-

ting as at June 11, 2018, taking into account that the consulting agreement

General conditions of exercise

with the Company would have to be maintained during that 12 months

period;

- June 11, 2028, at the latest date

Number of new shares that may be subscribed

10,000

Type of security

BSA-2019-Consultant

Number of BSA issued and subscribed at €3.03 / BSA

6,000

Number of BSA warrants lapsed

0

Number of BSA warrants exercised

0

Balance of BSA warrants to be exercised

6,000

Date of the general meeting

March 28, 2019

Date of the meeting of the board of directors

June 24, 2019

Exercise price per new share

€20.21

BSA warrant exercise deadline

June 24, 2029

Ratio

One BSA-2019-Consultant warrant for one new CARMAT share

- up to 166 warrants per full calendar month that has elapsed from the first

General conditions of exercise

day of the calendar month following the decision of the board of directors;

- June 24, 2029, at the latest date

Number of new shares that may be subscribed

6,000

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STOCK OPTIONS

Type of security

Stock options - 2018

Number of options issued and allocated

46,000

Number of options lapsed

-

Number of options exercised

-

Balance of options to be exercised

46,000

Date of the general meeting

April 5, 2018

Date of the meeting of the board of directors

December 3, 2018

Exercise price per new share

€20.35

Options exercise deadline

Ten years from the date of allocation of the options

Ratio

One option - 2018 for 1 new CARMAT share

- 50% of the options may be exercised in increments of 1/36 each month

elapsed from 1 January 2019, and in any event no later than 10 years after

their date of allocation to the beneficiary;

General conditions of exercise

- 50% of the options are exercisable when the Company succeeds in suc-

cessfully raising additional financing (excluding Equity Line financing and

EIB type loans) for an amount of at least €100 million between the date

of grant and December 31, 2020, and in any event no later than 10 years

after their date of allocation to the beneficiary.

Number of new shares that may be subscribed

46,000

Type of security

Stock options - 2019

Number of options issued and allocated

46,000

Number of options lapsed

-

Number of options exercised

-

Balance of options to be exercised

46,000

Date of the general meeting

March 28, 2019

Date of the meeting of the board of directors

April 1st, 2019

Exercise price per new share

€22.70

Options exercise deadline

Ten years from the date of allocation of the options

Ratio

One option - 2019 for 1 new CARMAT share

- the options can be exercised in increments of 1/36 each month elapsed

General conditions of exercise

from 1 January 2019, and in any event no later than 10 years after their

date of allocation to the beneficiary;

- March 31, 2029, at the latest date

Number of new shares that may be subscribed

46,000

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Preferential shares (FREE PREFERENTIAL SHARES SUBJECT TO PERFORMANCE CRITERIA OVER A 3 YEARS PERIOD)

(see section 5.4.3 « Rights, privileges and restrictions attaching to shares (Articles 9 to 14 of the Articles of Associa- tion) » of the universal registration document, specifying

the characteristics of Preferential Shares and conversion ratios into Ordinary Shares).

Number of

Maximum

preferen-

AGAP 2017

conversion

tial shares

Number of

ratio appli-

issued

common

Performance criteria

cable for

Preferential

shares

each per-

(as at

issuable

shares classes

formance

December

criteria

31, 2019)

Class 1

Class 2

Class 3

Definition of the Company's industrial development plan

320

100

32,000

Successful implantation of the bioprosthesis evaluated

2,000

20

40,000

on 10 patients in total in the world

Filing of the clinical module of the CE marking

15

52,350

of the bioprosthesis

CE marking of

20

69,800

the bioprosthesis

Obtaining additional financing for the Company for an

aggregate amount, between the grant date and the conver-

25

87,250

tibility date, of €100 million

Implementation of a production process meeting

15

52,350

certain criteria

3,490

Effective commercialization of bioprostheses at 15 European

10

34,900

implantation centers

Successful implantation of the bioprosthesis evaluated

10

34,900

on 10 patients in the United States

Successful implantation of the bioprosthesis evaluated

10

34,900

on 100 patients in total in the world

Positive development of the ordinary share price according

10

34,900

to specific criteria

Maximum number of ordinary shares that may be created, regardless of the

100

349,000

number of performance achieved for Class 3

TOTAL

5,810

421,000

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Number of

Maximum

preferen-

AGAP 2018

conversion

tial shares

Number of

ratio appli-

issued

common

Performance criteria

cable for

Preferential

shares

each per-

(as at

issuable

shares classes

formance

December

criteria

31, 2019)

Class 1

Class 2

Class 3

Successful execution of « prosthesis» test

580

100

58,000

benches for CE marking

Recruitment of 10 patients in the pivotal study for CE marking

10

113,000

Recruitment of the 20th patient in the pivotal study to obtain

the CE marking or finalization of the pivotal study for submis-

11,300 *

5

56,500

sion of the dossier to DEKRA

Obtaining authorization to conduct an Early Feasability

5

0 *

Study in the United States by December 31, 2018

Maximum number of ordinary shares that may be created, regardless of the

20

169,500

number of performance achieved for Class 2

Filing of the clinical module of the CE marking

15

11,000

of the bioprosthesis

CE marking of

20

14,800

the bioprosthesis

Obtaining additional financing for the Company for an

aggregate amount, between the grant date and the conver-

25

18,500

tibility date, of €38.5 million

Implementation of a production process meeting

15

11,000

certain criteria

740

Effective commercialization of bioprostheses at 15 European

10

7,400

implantation centers

Successful implantation of the bioprosthesis evaluated

10

7,400

on 10 patients in the United States

Successful implantation of the bioprosthesis evaluated

10

7,400

on 100 patients in total in the world

Positive development of the ordinary share price according

10

7,400

to specific criteria

Maximum number of ordinary shares that may be created, regardless of the

100

74,000

number of performance achieved for Class 3

TOTAL

12,820

301,500

*: 11,500 AGAP-2018-02 had been awarded by the Board of Directors, number reduced to 11,300 because of the departure of a beneficiary.

**: The corresponding performance criterion has not been achived.

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Number of

Maximum

preferen-

AGAP 2019

conversion

tial shares

Number of

ratio appli-

issued

common

Performance criteria

cable for

Preferential

shares

each per-

(as at

issuable

shares classes

formance

December

criteria

31, 2019)

Successful completion of the first patient treated in the

Class 1

United States of the US pivotal study following the positive

7,880 *

10

78,800

conclusion of the Early Feasability Study

Class 2

Obtaining CE marking with sufficient inventory to support the

7,880 **

10

78,800

commercial launch

Class 3

Billing and implantation of 5 prostheses

3,540 ***

10

35,400

within 4 months of CE marking

TOTAL

19,600

193,000

*: 8,000 AGAP-2019-01 had been awarded by the Board of Directors, number reduced to 7,880 because of the departure of a beneficiary.

**: 8,000 AGAP-2019-02 had been awarded by the Board of Directors, number reduced to 7,880 because of the departure of a beneficiary.

***: 3,600 AGAP-2019-03 had been awarded by the Board of Directors, number reduced to 3,540 because of the departure of a beneficiary.

share capital authorized

5.2.6but not issued

Table of delegations applicable following the general mee-

ting of March 28, 2019:

Shareholders' meeting of March 28, 2019

Maximum nominal

Maximum nominal

Period of

Resolution

Subject matter of the resolution

authorization

amount in euros

amount in euros

and expiry

Delegation of authority allowing the board

Nominal value of increases

of directors to increase capital immedia-

in capital: €200,000 (1)

tely or in the future by issuing ordinary

11th

Face value of bonds and

May 28, 2021

shares or any other securities giving

N / A

resolution

other debt instruments

(26 months)

access to the capital or giving right to the

giving access to capital:

allocation of debt securites, with retention

of preferential subscription rights

€120,000,000 (1)

Delegation of authority allowing the

Nominal value of increases

At least equal to the

board of directors to decide on the issue

of shares and/or transferable securities

in capital: €200,000 (1)

average volume-weighted

price of the last five stock

May 28, 2021

12th

giving immediate or future access to capi-

Nominal amount of bonds

market sessions prior to the

resolution

tal or giving right to the allocation of debt

and other debt instruments

defining of the issue price (26 months)

securities, with removal of the preferential

giving access to capital:

less any discount (maxi-

subscription right by way of a public offer

€120,000,000 (1)

mum 30%)

(Article L.225-136)

  1. These amounts are not cumulative. The overall maximum nominal amount of capital increases that can be carried out under the delegations granted under resolutions 11 to 18 is set at €200,000. The maximum nominal amount of debt securities which can be issued under the above delegations is set at €120,000,000.

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Maximum nominal

Maximum nominal

Period of

Resolution

Subject matter of the resolution

authorization

amount in euros

amount in euros

and expiry

Delegation of authority allowing the

board of directors to decide on the issue

of shares and/or transferable securities

Nominal value of increases

At least equal to the

giving immediate or future access to capi-

in capital: €200,000 (1)

average volume-weighted

13th

tal or giving right to the allocation of debt

Nominal amount of bonds

price of the last five stock

May 28, 2021

securites, with removal of the preferential

market sessions prior to the

resolution

subscription rights, by offering to qualified

and other debt instruments

defining of the issue price

(26 months)

investors or to a limited circle of investors

giving access to capital:

less any discount (maxi-

in the meaning of Paragraph II of Article

€120,000,000 (1)

mum 30%)

L.411-2 of the French Monetary and Finan-

cial Code (Article L.225-136 3)

Subject to the listing of the Company's

shares on a regulated market, the autho-

At least equal to the

rization allowing the board of directors,

Limited to 10% of the Com-

average volume-weighted

14th

in the event of the issue of shares or of

price of the last five stock

May 28, 2021

any security giving access to capital with

pany's capital (as existing

market sessions prior to the

resolution

on the date of the transac-

(26 months)

removal of the preferential subscription

defining of the issue price,

tion) per 12 month period

right, to set the issue price at a maximum

less any discount (maxi-

of 10% of the share capital and within the

mum 30%)

limits determined by general meeting

Delegation of authority allowing the board

15th

of directors to increase the amount of

Limited to 15% of the initial

Price identical to that of the

May 28, 2021

each of the issues with or without prefe-

resolution

issue

initial issue

(26 months)

rential subscription right which would be

decided under resolutions 11 to 13.

Delegation of authority allowing the board

Nominal value of increases

At least equal to the

of directors to increase capital immedia-

tely or in the future by issuing ordinary

in capital: €200,000 (1)

average volume-weighted

price of the last five stock

September 28, 2020

16th

shares or any other securities giving

Face value of bonds and

market sessions prior to the

resolution

access to the capital, with removal of the

other debt instruments

(18 months)

preferential subscription right to a cate-

giving access to capital:

defining of the issue price

less any discount (maxi-

gory of beneficiaries (Biotech/Medtech

€120,000,000 (1)

mum 30%)

investors)

Delegation of authority allowing the board

Nominal value of increases

At least equal to the

of directors to increase capital immedia-

in capital: €200,000 (1)

average volume-weighted

tely or in the future by issuing ordinary

price of the last five stock

17th

Face value of bonds and

September 28, 2020

shares or any other securities giving

market sessions prior to the

resolution

other debt instruments

(18 months)

access to the capital, with removal of the

giving access to capital:

defining of the issue price

preferential subscription right to a cate-

less any discount (maxi-

€120,000,000 (1)

gory of beneficiaries (Strategic partners)

mum 30%)

Delegation of authority allowing the board

Nominal value of increases

At least equal to the

of directors to decide on the issue of

shares and/or securities giving immediate

in capital: €200,000 (1)

average volume-weighted

price of the last three stock

September 28, 2020

18th

or future access to the capital or providing

Nominal amount of bonds

resolution

a right to a debt instrument, with removal

and other debt instruments

market sessions prior to the

(18 months)

defining of the issue price

of the preferential subscription right of

giving access to capital:

less any discount (maxi-

shareholders for the benefit of a category

€120,000,000 (1)

mum 30%)

of beneficiaries (equity line financing plan)

Delegation of authority allowing the board

May 28, 2021

20rd

of directors to increase capital by incor-

Nominal value of increases

N / A

resolution

poration of premiums, reserves, profits or

in capital: €200,000 (2)

(26 months)

other

(2) Separate limit to the limit for resolutions 11 to 18 above.

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information on the company and its capital

Ordinary shares warrants issue:

Subject matter of

Maximum nominal

Method of deter-

Method of deter-

Period of authori-

Resolution

the resolution

amount in euros

mining the issue

mining the exer-

zation and expiry

price

cise price

Delegation of autho-

rity allowing the board

of directors to issue

At least equal to the

warrants dedicated to

To be fixed by the

average of the prices

board members (not

board of directors

weighted by the

September 28, 2020

21th

having the quality of

€4,000 (corresponding

volumes of the last

resolution

employees or mana-

to 100,000 shares) (1)

Issue price could

20 trading sessions

(18 months)

gers), persons bound by

preceding the fixing

of

a contract of services

be free

the issue price of the

or members of Com-

warrants

mittees set up by the

board of directors

  1. These amounts are not cumulative. The overall maximum nominal amount of capital increases that can be carried out under the delegations granted under resolutions 21 and 22 is set at €4,000.

Subscription or purchasing of shares options issue:

Maximum nominal

Method of determi-

Period of

Resolution

Subject matter of the resolution

ning the exercise

authorization

amount in euros

price

and expiry

22th

Authorization granted to the board

€4,000 (corresponding to

May 28, 2022

of directors to award options for the

(2)

resolution

100,000 shares) (1)

(38 months)

subscription or purchasing of shares.

  1. These amounts are not cumulative. The overall maximum nominal amount of capital increases that can be carried out under the delegations granted under resolutions 21 and 22 is set at €4,000.
  2. The purchase or subscription price per share will be set by the board on the day the option is granted, based on the following:

- for as long as the shares are admitted for trading on the Euronext Growth market, the purchase or subscription price shall be determined in accordance with the provisions of Article L. 225-177 of the French Commercial Code and must be at least equal to the sales price of one share at the close of the Euronext Growth market on the day prior to the decision of the board of directors to allocate the options;

  • in the event that the Company's shares are admitted for trading on a regulated market, the board may determine the purchase or subscription price per share with reference to the sales price of one share at the close of that regulated market on the day prior to the decision of the board to allocate the options. However, the purchase or subscription price per share may under no circumstances be less than ninety-five percent (95%) of the average sales price of one share at the close of the said market during the twenty trading days prior to the decision of the board of directors to allocate the options rounded dow to the nearest euro, nor, for the bonds, to 80% of the average salesprice of the bonus shares of the Company, rounded down to the nearest euro.

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Free allocation of preferential shares:

Lockup

Exercise

Acquisition

period of the

Period of

period appli-

Subject matter of

Maximum nominal

period for

conversion

authoriza-

Resolution

the resolution

amount in euros

the prefer-

cable to the

option into

tion and

red shares

preferred

ordinary

expiry

shares

shares

Delegation of autho-

rity allowing the board

of directors to allo-

5 years and

cate free preferential

€3,200 (corresponding

May 28, 2022

25th

2 years

3 months from

shares convertible into

to 80,000 ordinary

1 year

resolution

minimum

the end of the

(38 months)

ordinary shares «AGAP

shares)

lock-up period

2019-01» dedicated

to employees and / or

corporate officers

Delegation of autho-

rity allowing the board

of directors to allo-

5 years and

cate free preferential

€3,200 (corresponding

May 28, 2022

26th

2 years

3 months from

shares convertible into

to 80,000 ordinary

1 year

resolution

minimum

the end of the

(38 months)

ordinary shares «AGAP

shares)

lock-up period

2019-02» dedicated

to employees and / or

corporate officers

Delegation of autho-

rity allowing the board

of directors to allo-

5 years and

cate free preferential

€1,600 (corresponding

May 28, 2022

27th

2 years

3 months from

shares convertible into

to 40,000 ordinary

1 year

resolution

minimum

the end of the

(38 months)

ordinary shares «AGAP

shares)

lock-up period

2019-03» dedicated

to employees and / or corporate officers

Performance criteria to be met in order to make the preferential shares AGAP 2019-01, AGAP 2019-02 and AGAP

2018-03 convertible into ordinary shares:

  • For AGAP 2019-01:
  • successful completion of the first patient treated in the United States of the US pivotal study following the posi- tive conclusion of the Early Feasability Study
  • For AGAP 2019-02:
  • obtaining the CE marking with sufficient inventory to support the commercial launch.
  • For AGAP 2019-03:
  • billing and implantation of 5 prostheses in 4 months after CE marking.

On the date of filing of this universal registration docu- ment, the board of directors made use of the delegations of authority voted at the general meeting of shareholders of the Company of April 5, 2018, proceeded on February 11,

2019 to the free allocation of:

  • 370 AGAP 2018-03.

In addition, the board of directors made use of the delegations of authority voted at the general meeting of shareholders of the Company on March 28, 2019, in the following manner:

  • the board of directors, made use of the delegations of authority voted at the general meeting of March 28, 2019, decided the free allocation on April 1, 2019, September 23,
    2019 and December 2, 2019 a total of:
  • 8,000 AGAP 2019-01.
  • 8,000 AGAP 2019-02.
  • 3,600 AGAP 2019-03.

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Following the departure of one of the beneficiaries, 7,880 AGAP 2019-01, 7,880 AGAP 2019-02 and 3,540 AGAP 2019- 03 are respectively in circulation today.

  • the board of directors, making use of the delegations of authority voted at the general meeting of March 28, 2019, decided to issue on June 24, 2019 of 6,000 BSA - 2019 for the benefit of a consultant of the Company.
  • the board of directors, making use of the delegations of authority voted at the general meeting of March 28, 2019, decided on April 1, 2019 to grant Jean-Pierre Garnier a share subscription option program for up to 46,000 stock options.
  • the board of directors, making use of the delegations of authority voted at the general meeting of March 28, 2019, approved on September 18, 2019, the principle of two capi- tal increases by the issue of ordinary shares with removal of shareholders' preferential subscription rights for a maxi- mum total nominal amount of € 200,000:

one reserved (16th resolution) for the benefit of a first category of beneficiaries,

  • and the other (17th resolution) for the benefit of a second category of beneficiaries.

These capital increases resulted in the issuance of 3,157,895 new ordinary shares.

details of the company's

None.

5.2.7 share capital subject

to an option or a conditional or

unconditional agreement making

them subject to an option

5.2.8Table of changes in the company's share capital

The Company was registered in the Versailles Trade and Companies Register on June 30, 2008 with an initial share

capital of €40,000. The table below shows a summary of the changes in share capital during the last 3 years.

Date of

Issue pre-

Nominal

Cumu-

Share

Increase in

mium or

Number

capital fol-

realiza-

value of

lative

Type of operation

capital

contribu-

of shares

lowing the

tion of the

shares

number of

(in euros)

tion

created

operation

operation

(in euros)

shares

(in euros)

(in euros)

Increase in capital by cash contri-

February 10,

bution through the exercise of

380.00

245,975.00

9,500

0.04

6,035,444

241,417.76

2017

both Kepler BSA warrants and BCE

warrants

Increase in capital by cash contri-

May 15, 2017

bution through the exercise of

1,520.00

971,430.00

38,000

0.04

6,073,444

242,937.76

both Kepler BSA warrants and BCE

warrant

Increase in capital by cash contri-

June 12, 2017

bution through the exercise of

2,644.00

1,760,686.00

66,100

0.04

6,139,544

245,581.76

both Kepler BSA warrants and BCE

warrant

Increase in capital by cash contri-

September 25,

bution through the exercise of

3,080.00

1,871,760.00

77,000

0.04

6,216,544

248,661.76

2017

both Kepler BSA warrants and BCE

warrant

Note that Kepler Cheuvreux does not intend to retain the shares subscribed under the share issue agreements made in January 2015 and in September 2018, and will subsequently sell them to investors or on the open market.

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Date of

Issue pre-

Nominal

Cumu-

Share

Increase in

mium or

Number

capital fol-

realiza-

value of

lative

Type of operation

capital

contribu-

of shares

lowing the

tion of the

shares

number of

(in euros)

tion

created

operation

operation

(in euros)

shares

(in euros)

(in euros)

Increase in capital by cash contri-

December 1,

bution through the exercise of

6,200.00

3,402,140.00

155,000

0.04

6,371,544

254,861.76

2017

both Kepler BSA warrants and BCE

warrant

December 12,

Increase in capital by cash

105,800.00

52,794,200.00

2,645,000

0.04

9,016,544

360,661.76

2017

contribution

February 12,

Increase in capital by cash contri-

bution through the exercise of

1,840.00

957,800.00

46,000

0.04

9,062,544

362,501.76

2018

Kepler BSA warrants

April 16,

Increase in capital by cash contri-

bution through the exercise of

3,640.00

1,837,500.00

91,000

0.04

9,153,544

366,141.76

2018

Kepler BSA warrants

Increase in capital by cash contri-

December

bution through the exercise of

3,445.00

1,785,240.00

86,125

0.04

9,239,669

369,586.76

3,2018

both Kepler BSA warrants and BCE

warrant

Increase in capital by cash contri-

82,250 OS

9,321,919 OS

Fébruary

bution through the exercise of both

3,522.40

1,625,360.00

0.04

373,109.16

11,2019

Kepler BSA warrants and BCE war-

5,810 PS

5,810 PS

rant / AGAP effective acquisition

Increase in capital by cash contri-

9,337,669 OS

April 1st,

bution through the exercise of

630.00

329,370.00

15,750 OS

0.04

373,739.16

2019

both Kepler BSA warrants and BCE

5,810 PS

warrant

Increase in capital by cash contri-

73,225 OS

9 410 894 OS

June 24,

bution through the exercise of both

3,366.20

972,401.00

0.04

377,105.36

2019

Kepler BSA warrants and BCE war-

10,930 PS

16,740 PS

rant / AGAP effective acquisition

September 18,

Increase in capital by cash

12,568,789 OS

126,315.80

59,873,689.20

3,157,895 OS

0.04

503,421.16

2019

contribution

16,740 PS

Increase in capital by cash contri-

12,592,539 OS

September 23,

bution through the exercise of

950.00

329,050.00

23,750 OS

0.04

504,371.16

2019

both Kepler BSA warrants and BCE

16,740 PS

warrant

December

12,592,539 OS

AGAP effective acquisition

14.80

-

370 PS

0.04

504,385.96

2nd, 2019

17,110 PS

OS: Ordinary Shares

PS: Preferential Shares

Note that Kepler Cheuvreux does not intend to retain the shares subscribed under the share issue agreements made in January 2015 and in September 2018, and will subsequently sell them to investors or on the open market.

5.3 major shareholders

5.3.1 distribution of capital and voting rights

current distribution of capital and voting rights

The table hereafter shows the distribution of the capital and voting rights (please refer to Paragraph 5.3.2 « Voting rights » of this universal registration document, which indicates the conditions under which double voting rights may be obtained) of the Company at December 31, 2019, to the best of the Company's knowledge:

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Shareholders (December 31, 2019)

Number of

Number of

%

% of voting

shares

voting rights

of capital

rights

Matra Défense (Airbus Group)

1,670,640

2,652,040

13.2%

18.4%

Professor Alain Carpentier

548,583

1,097,166

4.4%

7.6%

Research Association of the Alain Carpentier Foundation

115,000

230,000

0.9%

1.6%

Funds managed by Truffle Capital

356,024

470,103

2.8%

3.3%

Air Liquide

76,982

76,982

0.6%

0.5%

Cornovum

458,715

458,715

3.6%

3.2%

Lohas

1,449,603

1,449,603

11.5%

10.0%

Santé Holdings SRL

925,091

925,091

7.3%

6.4%

Thérabel Pharma

309,210

309,210

2.5%

2.1%

Corely Belgium

800,000

800,000

6.3%

5.5%

Bratya SPRL

250,000

250,000

2.0%

1.7%

Bad 21

652,632

652,632

5.2%

4.5%

Treasury stock

4,170

-

0.0%

-

Secondary offering

4,992,999

5,055,326

39.6%

35.0%

Total

12,609,649

14,426,868

100.0%

100.0%

To the best of the Company's knowledge, there is no other shareholder owning more than 5% of the capital or the voting rights.

Funds managed by Truffle Capital

Founded in 2001 in Paris, Truffle Capital is an acknowledged European player in the area of investment capital, investing in and developing innovative SMEs and building technological leaders in the areas of Life Sciences, Information Technology and Energy.

Airbus Group

Airbus Group (formerly EADS), born out of a merger in July 2000 between DaimlerChrysler Aerospace AG, Aérospa- tiale-Matra and Construcciones Aeronáuticas SA, is a world leader in the aeronautic, space and defense and associated services sectors. Airbus Group holds shares in CARMAT through its wholly-owned subsidiary, Matra Défense.

Professor Carpentier

Professor emeritus at the Pierre and Marie Curie University (University of Paris VI) and Professor at the Mount Sinai School of Medicine in New York, he is the founder and director of the Biosurgical Research Laboratory at the Scientific Research Association of the Alain Carpen- tier Foundation.

Winner of the 1998 Foundation for Medical Research

Grand Prize, and vice-chairman of the Academy of Sciences, he also received the prestigious Albert Lasker Award for Clinical Medical Research in 2007 in recognition of his two main contributions to the field - invention of valve bioprostheses (Carpentier-Edwards valves) and the development of techniques for plastic and reconstructive surgery of heart valves, which benefit several hundred thousand patients worldwide each year.

Scientific Research Association of the Alain Carpentier Foundation (ARSFAC)

Set up in December 2007 by Professor Alain Carpentier, the purpose of the Scientific Research Association of the Alain Carpentier Foundation is to finance medical research projects, in particular in the surgical, cardiovascular and neurological areas.

Lohas

This entity is a family office of Mr. Pierre Bastid, having acquired the Existing Shares originally subscribed by ZAKA (another family office of Mr. Pierre Bastid) as part of the Company's private placement executed in 2016, from Babalia (another family office of Mr. Pierre Bastid) in July 2018.

Santé Holdings SRL

This entity is the family office of Dr. Antonino Ligresti, who was notably President of Générale de Santé.

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CorNovum

This entity is an investment vehicle equally owned by the French State and by BPI France.

Thérabel Group

The Thérabel group is a pharmaceutical group operating both in the field of prescription drugs and that of over-the- counter (OTC) drugs.

Corely Belgium SPRL and Bratya SPRL

These two entities are investment holding companies of the Gaspard family, owner of the Lyreco group.

Bad 21 BVBA

This entity is the investment holding company of Pierre- Edouard Stérin, founder of Smartbox.

change in the distribution of capital and voting rights

The table below shows the distribution of capital and voting rights in the Company as at December 31, 2018, December 31, 2017 and as at December 31, 2016, insofar as known to the Company.

It should be noted that on February 26, 2016 the Company announced a significant fund-raising initiative, for €50 million, via a reserved capital increase operation after the effective extraordinary general meeting held on April

12, 2016, and subscribed by a pool of strategic investors, composed of Air Liquide via its investment holding company ALIAD, of the joint investment vehicle of Bpifrance and the State (Programme des Investissements d'Ave- nir (future investments program - CorNovum), the family offices of Mr. Pierre Bastid (ZAKA) and of Dr. Ligresti (Santé Holdings SRL) and by the reference shareholders, Matra Défense (Airbus Group) and Truffle Capital.

In addition, in December 2017, the Company launched a capital increase operation through a public offering that benefited from the support of the historic shareholders, in particular the family offices of Mr. Pierre Bastid (Baba- lia) and Dr. Ligresti (Santé Holdings SRL).

Finally, the Company announced on September 19, 2019 the success of a private placement of € 60 million to investors specializing in the life sciences and medical technologies sectors, and to strategic partners. In particular, some historic shareholders (Matra Defense of the Airbus group, Lohas, Santé Holdings SRL and Thérabel group) participated in this financing round, but also new family shareholders and entrepreneurs including Corely Belgium SPRL and Bratya SPRL (family investment holdings Gas- pard, owner of the Lyreco group), and Bad 21 SPRL (invest- ment holding company of Pierre-Edouard Stérin, founder of Smartbox).

These operations explains the observable changes in the CARMAT composition of the shareholders these last years.

As at December 31, 2018

As at December 31, 2017

As at December 31, 2016

Shareholders

% of capital

% of voting

% of capital

% of voting

% of capital

% of voting

rights

rights

rights

Matra Défense (Airbus Group)

14.4%

20.9%

14.8%

20.7%

22.1%

27.5%

Professor Alain Carpentier

5.9%

9.9%

6.1%

9.8%

9.1%

13.0%

ARSFAC

1.2%

2.1%

1.3%

2.1%

1.9%

2.7%

Funds managed by Truffle Capital

3.8%

4.2%

8.5%

11.5%

15.4%

19.6%

Air Liquide

0.8%

0.7%

0.9%

0.7%

0.5%

0.3%

Cornovum

5.0%

4.1%

5.1%

4.1%

7.6%

5.4%

Lohas

13.9%

11.6%

14.3%

11.5%

4.8%

3.5%

Santé Holdings SRL

7.4%

6.2%

7.6%

6.1%

3.1%

2.2%

Thérabel Pharma

1.4%

1.1%

-

-

-

-

Treasury stock

0.0%

0.0%

0.0%

0.0%

0.1%

0.0%

Secondary offering

46.1%

39.1%

41.4%

33.6%

35.4%

25.7%

Total

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

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5.3.2voting rights

The voting right attaching to shares is proportional to the percentage of capital that they represent and each share gives an entitlement to at least one vote.

However, in accordance with Article 14 of the Articles of Association and in accordance with the provisions

of the French Commercial Code, all fully paid up shares which can be shown to have been registered to the same shareholder for at least two years will benefit, with effect from the first listing of the shares of the Company on the Euronext Growth market, from double voting rights compared with those given to other shares having regard to the percentage of share capital that they represent.

5.3.3statement concerning control of the company

As at the date of this universal registration document, to the best of the Company's knowledge, no single

shareholder was in control of the Company, directly or indirectly or with others, within the meaning of Article L.233-3 et seq. of the French Commercial Code.

5.3.4Agreements that may bring about a change in the control

As at the date of this universal registration document, and to the best of the Company's knowledge, there are no agreements that may bring about a change in control of the Company.

5.4 memorandum and articles of association

5.4.1 corporate purpose (article 2 of the

memorandum and articles of association)

The purpose of the Company is, either directly or indirec- tly, both in France and abroad:

  • research and development in the field of medical devices and equipment, specifically in the cardiovas- cular field, and in all scientific fields directly or indirec- tly related thereto;
  • production and marketing of (i) medical devices and

equipment in the cardiovascular field and (ii) all associated technologies;

  • acquisition or creation of technology products and licenses connected with the cardiovascular field;
  • investment in French or foreign enterprises having acti- vities that are similar to, or which complement those mentioned above;
  • and, more generally, all operations of any kind - eco-

nomic, legal, financial, civil or commercial, industrial, movables or real estate - that may be directly or indirectly connected with the above-mentioned object or likely to contribute to the development thereof.

5.4.2provisions of the memorandum and articles

of association, a charter or bylaws of the company concerning the members of the board of directors and the general management (articles 15 - 21 of the memorandum and articles of association)

Article 15 - Board of directors

The Company is administered by a board of directors consisting of a minimum of five (5) and a maximum of eighteen (18) members subject to the derogation provided for by law in the case of a merger.

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Article 16 - Appointment and removal of directors

I. Appointment/removal of directors

Over the life of the Company, the directors are appointed by the ordinary general meeting. However, in the event of a merger or demerger, appointments may be made by an extraordinary general meeting. Their term of office is six

  1. years. It concludes at the end of the ordinary general meeting of shareholders that approves the financial sta- tements for the period just closed, and which is held in the year in which the term of office of the said director expires.

Any outgoing director may be re-elected subject to fulfilling the conditions of this Article.

Directors may be removed from office and replaced at any time by the ordinary general meeting.

Natural persons aged more than eighty-five (85) years may not be directors; where a director passes this age during a term of office they are deemed to have officially resigned at the next general meeting. Any appointment made in breach of the above provisions is null and void, with the exception of those which may be made on an interim basis.

Any director who is a natural person must, at the time of their appointment and throughout their term of office, meet the legal requirements in terms of the total number of directorships that a single person may hold in sociétés anonymes (corporations) based in Metropolitan France, save as otherwise provided for by law.

A Company staff member may only be appointed as a director if their contract of employment relates to an actual position within the Company. The number of directors having a contract of employment with the Company may not exceed one third of the directors in post.

II. Director in the form of a legal entity

Directors may be natural persons or legal entities. In the latter case, at the time of appointment, the legal entity is required to designate a permanent representative who will be subject to the same conditions and obligations and with the same civil and criminal liabilities as if they were a director in their own right, without prejudice to the joint and several liability of the legal entity that they represent. The permanent representative of a director in the form of a legal entity is subject to the age conditions that relate to directors who are natural persons.

The term of office of the permanent representative designated by the legal entity appointed as director is the same as the term of office of the latter.

If the legal entity revokes the mandate of its permanent representative, it is required to notify the Company, without delay, by registered letter, of this revocation and of the identity of its new representative. The same applies in the case of death or resignation of the permanent representative.

The designation of the permanent representative and the termination of their mandate are subject to the same publication formalities as if they were a director in their own right.

III. Vacancies, death, resignation

In the event of a vacancy due to death or resignation of one or more directors, the board of directors may proceed with interim appointments between two general meetings.

When the number of directors falls below the legal mini- mum, the remaining directors must immediately call an ordinary general meeting in order to bring the board up to strength.

Interim appointments made by the board are subject to ratification by the next ordinary general meeting. In the absence of ratification, resolutions passed and acts performed previously by the board will remain valid.

Article 17 - Organization and deliberations of the board

I. Chairman

The board of directors elects a chairman from among its members, who must be a natural person, failing which the appointment will be null and void. The board of directors determines the remuneration of the chairman.

The chairman of the board of directors organizes and directs the work of the latter, and reports thereon to the general meeting. He ensures that the Company bodies are operating properly, and in particular that the directors are capable of performing their duties.

In order to perform his duties, the chairman of the board of directors must be less than eighty-five (85) years of age. If the chairman of the board of directors passes this age during his term of office, he will be deemed to have officially resigned and the appointment of a new chairman will take place subject to the conditions provided for in this Article.

The chairman is appointed for a term that may not exceed that of his term of office as a director. The Chairman is eligible for re-election.

The board of directors may revoke the appointment at any time.

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In the event of the chairman being temporarily unavailable, or of his death, the board of directors may delegate the duties of chairman to a director.

In the event of a temporary impediment, this delegation is made for a limited period; it is renewable. In the event of death it remains valid until the election of a new chairman.

II. Board meetings

The board of directors meets as often as the interests of the Company dictate, at the invitation of the chairman and at least every two (2) months.

When it has not met for more than two (2) months, a minimum of one third of the members of the board of directors may ask the chairman to call a meeting with a specific agenda.

The chief executive may also ask the chairman to call a meeting of the board of directors with a specific agenda. The chairman is bound to act on requests made to him by virtue of the above two paragraphs.

Notices may be given by any means and even verbally.

The board meets at the head office or at any other location (in France or abroad) indicated in the notice, under the chairmanship of the chairman or, if he is unavailable, the member designated by the board to chair it.

The chairman of the board of directors chairs the mee- tings. In the event of the chairman being unavailable, the board appoints a chairman for each meeting from among the members present.

At each meeting, the board may appoint a secretary, who does not necessarily have to be a member.

A register is kept which is signed by the directors attending the board meeting.

The directors and any person called upon to attend the meetings of the board of directors are bound by secrecy in respect of information of a confidential nature indicated as such by the chairman.

III. Quorum, majority

Deliberations of the board will only be valid if at least half of the directors are present or deemed present under the arrangements laid down in the Bylaws where videoconfe- rencing and other means of telecommunication are used.

Unless otherwise stipulated by these Articles of Association and subject to the arrangements laid down in the Bylaws, where videoconferencing or other means of telecommunication are used, decisions are taken by a majority of votes of the members present or represented or

deemed present.

Directors are deemed present for the purposes of calculating a quorum or majority where they take part via video-conference or telecommunication under the conditions defined by the Bylaws of the board of direc- tors. However, physical presence or representation will be necessary for all deliberations of the board relating to adoption of the annual financial statements and the consolidated financial statements, and also for drawing up the management report and the consolidated management report, as well as for decisions concerning the removal of the chairman of the board of directors, the chief executive and the deputy chief executive.

Furthermore, half of the directors in post may oppose a meeting of the board being held via video-conference or telecommunication. Such opposition must be notified in the forms and by the deadline required by the Bylaws and/ or in those that may be laid down in the legal or regulatory provisions.

IV. Representation

Any director may give another director written authority to represent him at a meeting of the board.

Each director may hold only one proxy for the same meeting given by application of the above paragraph.

These provisions are applicable to the permanent representative of a director who is a legal entity.

V. Minutes of deliberations

The deliberations of the board of directors are recorded in minutes drawn up in a special register, numbered and ini- tialed, and kept at the head office in accordance with the regulatory provisions.

VI. Observers

Throughout the lifetime of the Company, the ordinary general meeting may proceed with the appointment of observers who may or may not be shareholders.

The number of observers may not exceed three (3).

Observers are appointed for a term of one (1) year. Their terms of office conclude at the end of the ordinary general meeting of shareholders called to approve the financial statements for the period just closed, and held in the year during which their terms of office cease.

Any outgoing observer may be re-elected subject to meeting the conditions of this Article.

Observers may be removed and replaced at any time by the ordinary general meeting without any compensation being

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due to them. The functions of the observers also cease upon the death or incapacity of an observer who is a natural per- son, or in the event of winding up or receivership in the case of an observer who is a legal entity.

Observers may be natural persons or legal entities. In the latter case, at the time of appointment, the legal entity is required to designate a permanent representative who will be subject to the same conditions and obligations and with the same civil and criminal liabilities as if they were an observer in their own right, without prejudice to the joint and several liability of the legal entity that they represent.

The duty of the observers is to ensure the strict application of the Articles of Association and to present their observations at the meetings of the board of directors.

The observers perform a general and permanent duty within the Company through advice and monitoring. In the context of their duties they may make observations to the board of directors and request access to information at the head office of the Company.

Observers must be invited to each meeting of the board of directors in the same way as directors.

Observers have only consultative powers on an individual or joint basis and have no voting rights on the board.

Failure to invite an observer or to send documents to an observer or observers prior to the meeting of the board of directors may in no case constitute grounds for nullity of the deliberations of the board of directors.

Article 18 - Powers of the board of directors

The board of directors sets the business policy of the Company and ensures that this is implemented.

Save for the powers expressly reserved to the meetings of shareholders and within the scope of the corporate pur- pose, the board of directors considers any matter relating to the proper operation of the Company and through its deliberations, deals with matters affecting it.

In its relations with third parties, the Company assumes an obligation, even for acts of the board of directors that do not fall within the scope of the corporate purpose, unless it can prove that the third party was aware that the act exceeded that scope, or, under the circumstances, must have been aware, although the simple publication of the Articles of Association will not suffice as proof.

The board of directors will proceed with the controls and verification that it deems appropriate.

Each director must receive the information necessary to

perform his duties and may obtain from the general management all documents he considers useful.

The board of directors may decide to set up working groups to look into matters that the board or its chairman may refer to them.

Article 19 - General management - Delegation of powers

I. Organizational principles

In accordance with the legal provisions, the general management of the Company is undertaken, on behalf of the Company, either by the chairman of the board of directors or by another natural person appointed by the board of directors and bearing the title of chief executive.

The choice between the two methods of exercising general management is made by the board of directors, which must inform the shareholders and third parties subject to the regulatory requirements.

The decision of the board concerning the choice of the method of exercising general management is taken by a majority vote of the directors present or represented, subject to the specific provisions of Article 17-III where directors attend the meeting by video-conference or other means of telecommunication.

A change in the method for undertaking general management does not result in a change to the Articles of Association.

Where general management of the Company is undertaken by the chairman of the board of directors, the following provisions relating to the chief executive are applicable to him.

  1. General managementChief executive

Depending on the choice made by the board of directors in accordance with the provisions of the above paragraph, the general management of the Company is exercised by the chairman of the board of directors, or by a natural per- son, who may or may not be a director, who is appointed by the board of directors and bears the title of chief executive. Where the board of directors chooses to separate the functions of chairman and chief executive, it will proceed to appoint the chief executive, define his term of office, determine his remuneration and, as necessary, the limits to his powers.

A person over the age of eighty-five (85) years may not be appointed as chief executive. If a chief executive in post passes this age he is deemed to have officially resigned.

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The chief executive may be removed from office at any time by the board of directors. Where the chief executive does not perform the role of chairman of the board of directors, his removal may be subject to payment of compensation if this takes place without good cause.

The chief executive is invested with the widest powers to act in all circumstances on behalf of the Company. He exercises these powers within the scope of the corporate purpose, save for those which the law expressly reserves to the meetings of shareholders and to the board of directors.

He represents the Company in its relations with third par- ties. The Company assumes an obligation, even for acts of the chief executive that do not fall within the scope of the corporate purpose, unless it can prove that the third party was aware that the act exceeded that scope, or, under the circumstances, must have been aware, although the simple publication of the Articles of Association will not suffice as proof.

In respect of the shareholders and without this restriction being binding upon third parties, the chief executive may not take any decision on behalf of the Company in the following areas without the prior authorization of the board of directors:

  • the securing of loans or advances in order to acquire shares or securities of any subsidiary company except where such subsidiary is wholly-owned;
  • the furnishing of guarantees on behalf of a subsidiary or to guarantee bank accounts;
  • all investments in excess of €250,000;
  • all commitments in excess of €100,000 and not provided for in the annual budget;
  • hiring, laying off and amending the contracts of employ- ment of employees at management level;
  • a change in the normal business of the Company and in its development strategy;
  • the disposal, transfer, licensing or pledging of any industrial or intellectual property or of any substantial asset;
  • approval of the budget and the strategic plan.

The chief executive may not, without a prior decision of the board of directors by a qualified majority of three quarters of the directors making up the board as at the date that the decision is taken:

  • take any decision to proceed with the transfer of any substantial asset or any intellectual/industrial property belonging to the Company;
  • take any decision to acquire a holding in a listed or unlisted company.

Deputy chief executives

At the proposal of the chief executive that this function be assumed by the chairman of the board of directors or

by another person, the board of directors may appoint one or more actual persons, known as deputy chief executives, who may or may not be chosen from among the directors and shareholders, who are charged with assisting the chief executive. The number of deputy chief executives may not exceed five. If the deputy chief executive is a director, his term of office may not exceed that of his term of office as a director.

A person over the age of eighty-five (85) years may not be appointed as deputy chief executive. If a deputy chief executive in post passes this age he is deemed to have officially resigned.

Deputy chief executives may be removed at any time by the board of directors at the proposal of the chief execu- tive. Removal without just cause may give rise to damages. By agreement with the chief executive, the board of directors decides on the scope and the duration of the powers granted to the deputy chief executives. The deputy chief executives have the same powers in respect of third parties as the chief executive.

Where the chief executive ceases or is prevented from performing his duties, the deputy chief executives will retain their functions and powers until the new chief executive is appointed, unless otherwise decided by the board.

The board of directors decides on the remuneration of the deputy chief executives.

III. Delegation of powers

The board of directors may entrust to its agents, who may or may not be directors, the permanent or temporary duties it decides upon, delegate powers to them and set the remuneration it considers appropriate.

Article 20 - Directors' remuneration

The general meeting may allocate to the directors, to compensate them for their work, by way of directors' fees, a fixed annual sum defined by the meeting, without being bound by previous decisions. The amount is posted to the operating expenses.

The board of directors freely distributes among its members the total amounts allocated to the directors as directors' fees; it may in particular allocate a higher share to those directors who are members of working groups than that allocated to the other directors.

The board of directors may award exceptional remuneration for the duties or mandates entrusted to directors.

The board of directors may authorize the reimbursement of travel and subsistence costs and expenses incurred by the directors in the interests of the Company.

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Article 21 - Agreements between the Com-

II. Prohibited agreements

pany and a director, the chief executive or

a deputy chief executive

It is prohibited, on pain of nullity of the contract, for direc-

tors other than those who are legal entities, to contract

I.Agreements subject to authorization.

for loans of whatever kind with the Company, to have an

overdraft granted by it, on a current or other account, or to

Except for those relating to day to day operations and

have it act as guarantor or stand surety for undertakings

entered into under normal conditions, any agreement that

by them to third parties.

is made, directly or through a nominee, between the Com-

pany and one of its directors, chief executives or deputy

The same prohibition applies to the chief executive,

chief executives, or a shareholder holding more than 10%

deputy chief executives and permanent representatives

of the voting rights in the Company, or in the case of a

of directors in the form of legal entities. It also applies to

shareholding company, the Company controlling it pur-

the spouses, ascendants and descendants of the persons

suant to Article L.233-3 of the French Commercial Code,

mentioned in this article and to any nominee.

must be referred for prior authorization by the board of

directors.

III. Current agreements

The same applies to agreements in which one of the per-

Agreements relating to current and ordinary transactions

sons referred to in the above paragraph has an indirect

and agreements concluded between two companies, one

interest.

of which holds, directly or indirectly, the whole capital

of the other, if any, less the minimum number of shares

Agreements entered into by the Company and an enter-

required to satisfy the requirements of Article 1832 of the

prise are also subject to prior authorization if they are with

Civil Code or Articles L. 225-1 and L. 226-1 of the Commer-

an enterprise where the chief executive, one of the deputy

cial Code are not subject to the legal authorization and

chief executives or one of the directors of the Company, is

approval procedure. However, these agreements, unless

the owner, partner with unlimited liability, manager, direc-

as a result of their subject-matter or their financial impli-

tor, member of the supervisory committee or, generally

cations they are not significant for any of the parties, must

speaking, an executive of the enterprise.

be notified by the interested party to the chairman of the

board of directors. A list and subject-matter of such agree-

Such agreements must be authorized and approved in

ments are notified by the chairman to the members of the

accordance with the statutory provisions.

board of directors and to the auditors at the latest on the

day of the meeting of the board to approve the financial

statements for the year ended.

Shareholders may also be sent the list and subject-matter

of these agreements.

rights, privileges

five years of the date when the transaction becomes defi-

5.4.3and restrictions

nitive in the case of an increase in capital.

attaching to shares (articles 9 - 14

of the memorandum and articles of

Calls for funds are notified to the subscribers and

association)

shareholders at least fifteen days prior to the date set

Article 9 - Depreciation of the share capital

for payment by individual recorded delivery letter with

acknowledgment of receipt.

The share capital may be depreciated in accordance with

A shareholder who does not make the required payments

the provisions of Articles L.225-198 et seq. of the French

for shares on the due dates will be liable to pay the Com-

Commercial Code.

pany, automatically and without prior warning, delay inte-

Article 10 - Settlement of shares

rest calculated on a daily basis from the due date at the

legal rate for commercial court matters plus three points.

At the time of any increase in capital, cash shares are sett-

In order to obtain payment of these sums the Company

is entitled to take the enforcement action and apply the

led, upon subscription, for at least a quarter of their face

sanctions provided for by Articles L.228-27 et seq. of the

value and, as appropriate, the full issue premium.

French Commercial Code.

Settlement of the balance must take place on one or more occasions at the call of the board of directors and within

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Article 11 - Form of shares

The ordinary shares are in registered or bearer form at the option of the holders. They can take the bearer form only after their complete release. Preferred fully paid-up shares are nominative.

The Company is authorized to identify holders of bearer shares by simple request, to the body in charge of the clearing of securities, of the name or company name, nationality, year of birth or establishment, shareholders' addresses or number of shares held by each of them.

Article 12 - Transfer of shares - Rights and obligations associated with shares - Exceeding of limits

12.1 - Transfer of shares

The ordinary shares may be freely traded once issued in accordance with the procedures set out by law.

They remain negotiable following the winding up of the Company and until liquidation is complete. Preferred shares are transferable in accordance with paragraph 12.2.

The ordinary shares and the preferred shares give rise to a book entry and are transferred by a movement between accounts under the conditions and according to the procedures set out in the law and the rules in force.

The provisions of this Article are generally applicable to all securities issued by the Company.

12.2. Rights and obligations attached to shares

The capital of the Company is composed of ordinary shares and preferential shares.

Shareholders are only liable for social liabilities up to the amount of their contributions.

I. Rights attached to ordinary shares

Without prejudice to the rights attached to the preferred shares, each ordinary share entitles the holder to a share in the profits and in the share capital in proportion to the portion of the capital it represents. It gives the right to par- ticipate, in the conditions set by the law and the present articles of association, at general meetings and vote on resolutions.

The ownership of an ordinary share automatically entails unreserved compliance with the articles of association and decisions of the general meeting of the Company.

The rights and obligations attached to the ordinary shares follow the title regardless of the holder.

Whenever it is necessary to own more than one share to exercise any right, in case of exchange, consolidation, allocation of shares, capital increase or reduction, merger or any other owners of individual securities or less than the required number can exercise these rights only if they do their personal business of grouping and possibly purchasing or saling the necessary number of securities.

II. Rights attached to preferential shares

Preferential shares and the rights of their holders are governed by the applicable provisions of the French Commercial Code, in particular Articles L. 228-11 et seq.

The maximum number of preferential shares that can be issued is:

  • 7,600 for the 2017 preferential shares,
  • 13,980 for the 2018 preferential shares, and
  • 20,000 for the 2019 preferential shares.

The preferential shares are classified into nine distinct categories according to the performance criteria attached to them:

  • «AGAP 2017-01» for a maximum of 320,
  • «AGAP 2017-02» for a maximum of 2,000,
  • «AGAP 2017-03» for a maximum of 5.280,
  • «AGAP 2018-01» for a maximum of 580,
  • «AGAP 2018-02» for a maximum of 11,500,
  • «AGAP 2018-03» for a maximum of 1,900,
  • «AGAP 2019-01» for a maximum of 8,000,
  • «AGAP 2019-02» for a maximum of 8,000, and
  • «AGAP 2019-03» for a maximum of 4,000.

From the time of their definitive grant and until they become convertible, the preferential shares have the right to vote at the ordinary and extraordinary meetings of ordinary shareholders, with one voting right per preferential share. From the date on which they become convertible, the number of voting rights to which each preferential share entitles becomes equal to the number of ordinary shares to which the conversion of each preferential share gives entitlement.

From the time of their definitive grant, preferential shares shall have the right to vote at a special meeting of the holders of each class of preferential shares. The holders of each class of preferential shares shall meet in a special meeting for any proposed amendment to the rights attached to such class of preferential shares. In addition, in accordance with the provisions of Article L. 228-17 of the French Commercial Code, any proposed merger or demerger of the Company will be subject to the approval of any special meeting concerned, could not be exchanged for shares with specific equivalent rights.

Special meetings shall only validly deliberate if the shareholders present or represented possess at least, on

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the first convocation, one third of the preferential shares and, on the second convocation, one fifth of the preferential shares with the right to vote. In the event of a change or amortization of the share capital, the rights of the holders of preferential shares are adjusted in such a way as to preserve their rights pursuant to Article L. 228-99 of the French Commercial Code. Other rights attached to preferential shares are set out in the following paragraph.

From the time of their definitive allocation and until they become convertible, the preferential shares benefit from a dividend and give right to the reserves. The amount of the dividend (and, where applicable, the reserves) to which each preferential share entitles is equal to the amount due in respect of one ordinary share multiplied by the number of ordinary shares to which the conversion of each preferential share gives right. For this purpose, the preferential shares shall bear dividends from the first day of the financial year preceding the year in which they are finally allo- cated. From the date on which they become convertible, the amount of the dividend (and, where applicable, the reserves) to which each preferential share entitles becomes equal to the amount due in respect of one ordinary share multiplied by the number of ordinary shares to which the conversion of each preferential share is entitled.

From the time of their definitive grant, in the event of the liquidation of the Company, preferential shares enjoy the same right to the liquidation bonus as the ordinary shares, ie a right proportional to the share that their nominal amount represents in the share capital.

From the time of their definitive grant, preferential shares are entitled to preferential subscription rights for any capital increase or any transaction with rights to the ordinary shares.

In the case of capital depreciation or reduction, changes in the distribution of profits, the allocation of free shares, capitalization of reserves, profits or issue premiums, distribution of reserves or any issue equity securities or securities giving the right to the allocation of capital securities with a subscription right reserved for shareholders before the preferential shares are convertible under the conditions set out in paragraph III. the maximum number of ordinary shares to which the preferential shares may be entitled by conversion shall be adjusted to take account of such transaction in accordance with the provisions of Article L. 228-99 paragraph 2, 3 ° and paragraph 5 of the Commercial Code.

For the purposes of this adjustment, the board of directors will calculate, at the time of fixing the final number of ordinary shares to which each preferential share entitles, the conversion ratio applicable according to the degree to which the performance criteria are met, such as this is provided for in paragraph III. below, and adjust this ratio for all transactions previously completed, in accordance with the above provisions.

Each beneficiary will be informed of the practical details of this adjustment and of its consequences on the allocation of ordinary shares on conversion of the preferential shares he / she has benefited from.

After the preferential shares have become convertible and the board of directors has calculated the conversion ratio as provided for in paragraph III. 5. below (as adjusted in accordance with this Article, if any), no adjustment shall be made to this conversion ratio, as the holders of preferential shares may thereafter convert them freely.

The preferential shares will be fully paid up when they are issued by capitalizing the Company's reserves, premiums or profits.

III. Conversion of preferential shares into ordinary shares

The issue of preferential shares may only be decided in the context of a free allocation of shares to employees and corporate officers of the Company in accordance with the provisions of Articles L. 225-197-1 et seq. Of the French Commercial Code.

The preferential shares will be definitively vested (the « Final Award ») by the beneficiaries at the end of a vesting period of one (1) year from their allocation by the board of directors ( the « Provisional Allocation »).

However, if the beneficiary is invalid for classification in the second or third of the categories provided for in Article L. 341-4 of the Social Security Code (or their equivalent in applicable foreign law), the preferential shares will be allocated definitively before the end of the remaining vesting period. In the event of the beneficiary's death, in accordance with the provisions of Article L. 225-197-3 of the Commercial Code, the beneficiary's heirs or beneficiaries may, if they wish, apply for the definitive allocation of the preferential shares within six months of the date of death. In the event of retirement, the beneficiaries will retain their right to the definitive allocation of preferential shares even though they are no longer bound by a contract of employment.

Holders of preferential shares may request conversion of their preferential shares into new or existing ordinary shares (at the Company's option) of the Company as follows:

1. Preferrential shares become convertible by their hol- der into new or existing ordinary shares (at the option of the Company) at the end of a two year retention period beginning on the date of the Final Assignment (the « Lock-Up Period ») under the conditions set out in para- graphs 2 to 9 below. From the date they become conver- tible (the « Convertibility Date »), preferential shares may be converted for five (5) years and three (3) months (the « Conversion Period »).

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2. In accordance with the provisions of Article L. 225-197-1 I, paragraph 7 of the Commercial Code, preferential shares will be freely transferable during the Lock-Up Period if the beneficiary becomes disabled in accordance with his classification in the second or third of the categories pro- vided for in Article L. 341-4 of the Social Security Code (or their equivalent in applicable foreign law), regardless of whether the disability occurs before or after the Final Award Date.

In the event of the beneficiary's death, whether the beneficiary dies during the vesting period or the Lock-Up Period, his / her heirs will no longer be required to comply with this non-assignment commitment, so that the preferential shares they have applied for the definitive allocation shall become freely transferable.

3. 2017 preferential shares are classified into three distinct classes according to the performance criteria attached to them: « AGAP 2017-01 », « AGAP 2017-02 » and « AGAP 2017-03 ». The number of ordinary shares to which the conversion of a 2017 preferential share will give entitle- ment will depend on whether one or more (or all) of the 2017 Performance Criteria have been met on the Conver- tibility Date (the « Performance »).

For the « AGAP 2017-01 » 2017 preferential shares, the 2017 Performance Criterion will be the definition of the Com- pany's industrial development plan, which will give the right to convert each preferential share into 100 ordinary shares.

For the « AGAP 2017-02 » 2017 preferential shares, the 2017 Performance Criterion will be the successful implementation of the bioprosthesis evaluated on a total of 10 patients worldwide, which will give the right to convert each preferential share into 20 ordinary shares.

For the « AGAP 2017-03 » 2017 preferential shares, the

2017 Performance Criteria will be as follows:

  • the filing of the clinical module of the CE marking of the bioprosthesis, which will give the right to convert each preferential share into 15 ordinary shares;
  • the CE marking of the bioprosthesis, which will give the right to convert each preferential share into 20 ordi- nary shares;
  • obtaining additional financing for the Company for a cumulative amount of € 100 million between the Provi-

sional Allocation Date and the Convertibility Date which will give the right to convert each preferential share into 25 ordinary shares being that such financing may take the form of, in particular, capital increases, debt instruments, conditional advances, operating subsidies or revenues received from collaborative arrangements or licence ;

  • the establishment of a production process that (i) meets the applicable regulatory and quality standards, and (ii) enables the bioprosthesis to be produced in

sufficient number and time to carry out the necessary clinical trials and to respond to commercial orders in the contractual deadlines, without any major interruption of production or quality problems leading to a recall of products sold, which will give the right to convert each preferential share into 15 ordinary shares;

  • the effective commercialization of the bioprosthesis at 15 European centers, which will give the right to convert each preferential share into 10 ordinary shares;
  • the successful implementation of the bioprosthesis evaluated on 10 patients in the United States, which will give the right to convert each preferential share into 10 ordinary shares;
  • the successful implementation of the bioprosthesis evaluated on 100 patients worldwide, which will give the right to convert each preferential share into 10 ordi- nary shares;
  • the change in the price of the common share accor- ding to the following criteria, which will give the right to convert each preferential share into a maximum of 10 ordinary shares.
  1. If the Final Price is strictly lower than the Initial Price, the number of ordinary shares in which each preferential share will be converted will be equal to 0;
  2. If the Final Price is comprised between (i) a value equal to or greater than the Initial Price and (ii) a value below the Ceiling Price, the number of ordinary shares in which each preferential share will be converted will be equal to:

[(Final Price / Initial Price) - 1] x 10

  1. If the Final Price is equal to or greater than the Ceiling Price, the number of ordinary shares in which each prefe- rential share will be converted will be equal to 10.

The « Final Price » is the highest average of the closing prices of the ordinary shares of the stock exchange sessions taken over a period of sixty consecutive days, calculated at any time during the three (3) years preceding the Convertibility Date.

The « Ceiling Price » is equal to the Initial Price multiplied by three, with a maximum of €114.

The « Initial Price » is equal to the closing price of the ordinary share on the date of the Provisional Allocation, with a minimum of €30 and a maximum of €38 per ordinary share.

It is specified that the conversion ratio thus determined for each category of 2017 preferential shares will be adjusted to take account of the shares to be issued in order to preserve the rights of holders of securities giving access to the capital of the Company and holders of 2017 preferential shares in accordance with the applicable legal and regulatory provisions and paragraph II above.

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4. 2018 preferential shares are classified into three distinct classes according to the performance criteria attached to them: « AGAP 2018-01 », « AGAP 2018-02 » and « AGAP 2018-03 ». The number of ordinary shares to which the conversion of a 2018 preferential share will give entitle- ment will depend on whether one or more (or all) of the 2018 Performance Criteria have been met on the Conver- tibility Date (the « Performance »).

For the « AGAP 2018-01 » 2018 preferential shares, the 2018 Performance Criterion will be will be the successful completion of the «prosthesis» test benches used to obtain CE marking, which will give the right to convert each AGAP 2018-01 into 100 ordinary shares.

For the « AGAP 2018-02 » 2018 preferential shares, the

2018 Performance Criterion will be as follows:

  • i. the recruitment of 10 patients in the pivotal study to obtain the CE mark, which will give the right to convert each AGAP 2018-2 into 10 ordinary shares;
  • ii. the recruitment of the 20th patient in the pivotal study to obtain CE marking or the finalization of the pivotal study for submission of the dossier to DEKRA, which will give the right to convert each AGAP 2018-2 into 5 ordinary shares ;
  • iii. obtaining authorization to complete the Early Feasi- bility Study in the US by December 31, 2018, which will entitle the holder to convert each AGAP 2018-2 into 5 ordinary shares.

For the « AGAP 2018-03 » 2018 preferential shares, the

2018 Performance Criteria will be as follows:

  • the filing of the clinical module of the CE marking of the bioprosthesis, which will give the right to convert each preferential share into 15 ordinary shares;
  • the CE marking of the bioprosthesis, which will give the right to convert each preferential share into 20 ordi- nary shares;
  • obtaining additional financing for the Company for a cumulative amount of € 38.5 million between the Provi-

sional Allocation Date and the Convertibility Date which will give the right to convert each preferential share into 25 ordinary shares being that such financing may take the form of, in particular, capital increases, debt instruments, conditional advances, operating subsidies or revenues received from collaborative arrangements or licence ;

  • the establishment of a production process that (i) meets the applicable regulatory and quality standards, and (ii) enables the bioprosthesis to be produced in suf- ficient number and time to carry out the necessary cli- nical trials and to respond to commercial orders in the contractual deadlines, without any major interruption of production or quality problems leading to a recall of products sold, which will give the right to convert each preferential share into 15 ordinary shares;
  • the effective commercialization of the bioprosthesis

at 15 European centers, which will give the right to convert each preferential share into 10 ordinary shares;

  • the successful implementation of the bioprosthesis evaluated on 10 patients in the United States, which will give the right to convert each preferential share into 10 ordinary shares;
  • the successful implementation of the bioprosthesis evaluated on 100 patients worldwide, which will give the right to convert each preferential share into 10 ordi- nary shares;
  • the change in the price of the common share accor- ding to the following criteria, which will give the right to convert each preferential share into a maximum of 10 ordinary shares.
  1. If the Final Price is strictly lower than the Initial Price, the number of ordinary shares in which each preferential share will be converted will be equal to 0;
  2. If the Final Price is comprised between (i) a value equal to or greater than the Initial Price and (ii) a value below the Ceiling Price, the number of ordinary shares in which each preferential share will be converted will be equal to:

[(Final Price / Initial Price) - 1] x 10

  1. If the Final Price is equal to or greater than the Ceiling Price, the number of ordinary shares in which each prefe- rential share will be converted will be equal to 10.

The « Final Price » is the highest average of the closing prices of the ordinary shares of the stock exchange sessions taken over a period of sixty consecutive days, calculated at any time during the three (3) years preceding the Convertibility Date.

The « Ceiling Price » is equal to the Initial Price multiplied by three, with a maximum of €114.

The « Initial Price » is equal to the closing price of the ordinary share on the date of the Provisional Allocation, with a minimum of €30 and a maximum of €38 per ordinary share.

It is specified that the conversion ratio thus determined for each category of 2018 preferential shares will be adjusted to take account of the shares to be issued in order to preserve the rights of holders of securities giving access to the capital of the Company and holders of 2018 preferential shares in accordance with the applicable legal and regulatory provisions and paragraph II above.

5. 2019 preferential shares are classified into three distinct categories according to the performance criteria attached to them: the « AGAP 2019-01 » for a maximum number of 8,000, the « AGAP 2019-02 » for a maximum number of 8,000 and the « AGAP 2019-03 » for a maximum number of 4,000. The conversion of a 2019 preferential share will give the right, if the Convertibility Date is achieved, to

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the performance criteria corresponding to the category in question (together, the « Performance Criteria ») is 10 ordinary shares.

For the « AGAP 2019-01 » 2019 preferential shares, the Performance Criterion will be the procedure successfully performed for the first patient treated in the United States of the pivotal study following the positive conclusion of the EFS (Early Feasibility Study) feasibility, which will give the right to convert each preferential share into 10 ordinary shares.

For the « AGAP 2019-02 » 2019 preferential shares, the 2019 Performance Criterion will be the obtaining of CE marking with sufficient inventory to support the commercial launch of the CARMAT prosthesis, which will give the right to convert each preferential share into 10 ordinary shares.

For the « AGAP 2019-03 » 2019 preferential shares, the Performance Criterion will be the invoicing and implantation of 5 prostheses within 4 months of the CE marking (excluding implantations as part of the innovation package in France ), which will give the right to convert each preferential share into 10 ordinary shares.

It is specified that the conversion ratio thus determined for each category of 2019 preferential shares will be adjusted to take account of the shares to be issued in order to preserve the rights of holders of securities giving access to the capital of the Company and holders of 2019 preferential shares in accordance with the applicable legal and regulatory provisions and paragraph II above.

6. The performance of each Performance Criterion shall be determined at a meeting of the board of directors held as soon as possible after completion of the Performance Criterion, which shall determine the number of ordinary shares to which each preferential share will be entit- led to this date. As soon as possible after the Converti- bility Date, the board of directors will meet to determine the final number of ordinary shares to which each prefe- rential share will be entitled, with the conversion ratio of AGAP 2017- 03 and of AGAP 2018-03 may under no cir- cumstances exceed 100, regardless of the number of Per- formance Criteria performed.

However, in the event of a takeover bid or exchange on the ordinary shares:

  • happening as of the Provisional Allocation Date,
  • whose definitive results are announced no later than the day before the Convertibility Date, and
  • made at a price per share between the Initial Price and a ceiling equal to three times the Initial Price,

the board of directors will determine the number of ordinary shares to which the preferential shares will be entitled on the date of announcement of the final results of the

offer exclusively under the following conditions:

  • For each beneficiary, a number « p » equal to the ratio (i) of the cumulative number of ordinary shares to which all the preferential shares (all categories) which have been allocated entitle the beneficiary to be entitled according to the realization of the Performance Criteria on the date of the announcement of the final results of the Offer, on (ii) the aggregate number of ordinary shares to which all preferential shares (all classes) all Performance Criteria are met.
  • If « p » is less than or equal to 0.35, the « N » number of ordinary shares to which each of the preferential shares (whichever class) has been allocated will be calculated using the following formula:

N = [0.35 + 0.65 * (R-1) / 2] * n

N being capped at 100 for AGAP 2017-01, 20 for AGAP 2017-02, 100 for AGAP 2017-03, 100 for AGAP 2018-01, 20 for AGAP 2018-02, 100 for AGAP 2018-03 and 10 for AGAP 2019-01,2019-02 and 2019-03 .

  1. being equal to 100 for AGAP 2017-01, 20 for AGAP 2017- 02, 100 for AGAP 2017-03, 100 for AGAP 2018-01, 20 for AGAP 2018-02, 100 for AGAP 2018-03 and 10 for AGAP 2019-01,2019-02 and 2019-03.

with

R = (Acquisition Price) / (Initial Price)

The « Acquisition Price » is equal to the closing price of the common share on the last day of the offering period, with a maximum of €114 per ordinary share.

The « Initial Price » is equal to the closing price of the ordinary share on the day of the allotment of preferential shares, with a minimum of €30 and a maximum of €38 per ordinary share.

A €30 minimum for the 2017 preferential shares and the 2018 preferential shares and €22 for the 2019 preferential shares and a maximum of €38 per ordinary share for all the preferential shares.

- If « p » is greater than 0.35, N will be calculated according to the following formula:

N = [p + (1-p) * (R-1) / 2] * n

knowing that, in any case, N can not be less than n * 0.35, that is to say 35 for AGAP 2014-01, 7 for AGAP 2017-02, 35 for AGAP 2017-03, 35 for AGAP 2018-01, 7 for AGAP 2018- 02, 35 for AGAP 2018-03 and 10 for AGAP 2019-01, 2019- 02 and 2019-03.

The preferential shares concerned will be definitively

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allocated to the beneficiaries on the Final Award Date, irrespective of whether or not a new attendance condition is provided for in the terms of the Preferential Share Plan and of the Performance Criteria above. In any case, preferential shares will become convertible only on the Convertibility Date.

7. If on the Convertibility Date none of the Performance Criteria is satisfied or if no takeover bid has been made under the conditions described above, the Company may (but without being an obligation for the Company) to redeem the preferential shares at any time at nominal value.

Similarly, preferential shares which may be converted but which have not been converted at the end of the Convertibility Period, may (without this being in no case an obligation for the Company) be bought at any time by the Company at their nominal value.

  1. At the end of the Convertibility Period, the Company may, in accordance with the applicable legal and regu- latory provisions, cancel preferential shares not yet converted, including those which it has bought back. The share capital will then be correlatively reduced, creditors having a right of opposition under the conditions provided for in Article L. 225-205 of the Commercial Code.
  2. The new ordinary shares resulting from the conversion of the preferential shares shall be assimilated to the ordi- nary shares in circulation and shall bear dividend from the first day of the financial year preceding that in which the preferential shares are converted and will confer on their holders, upon delivery, all rights attached to the ordinary shares. They will be the subject of a request for admission to trading on the Euronext Growth market on the same tra- ding line as the ordinary shares.
  3. The board of directors will recognize the conversion of the preferential shares into ordinary shares for which the conversion is in accordance with the conditions set out above, take note of the number of ordinary shares resulting from the conversions of preferential shares and amendments to the articles of association, in particular as regards the allocation of shares by category. This option may be delegated to the Director General under the condi- tions laid down by law.
  4. Shareholders will be informed of the conversions made by the reports of the board of directors and the statutory auditors provided for in Article R. 228-18 of the French Commercial Code. These additional reports will be made available to the shareholders at the registered office as from the date of the convening of each meeting.
  5. Capital increases resulting from the creation of prefe- rential shares and new ordinary shares will be carried out by special incorporation of all or part of available reserve accounts and, in particular, into the share premium

account.

12.3 - Exceeding of limits

Any natural person or legal entity acting alone or together with others who comes to possess a number of shares representing a percentage of the capital or the voting rights in excess of the limits set by law, will inform the Company within the statutory period, counting from when the holding limit is reached, of the total number of shares or voting rights held.

This information is also provided within the same time frames when the holding of share capital or voting rights drops below the limits mentioned in this paragraph.

A person required to provide this information will state the number of securities held giving access to capital and the voting rights attaching to these.

If required by the rules of a securities market other than a regulated market on which the securities of the Company are admitted for trading, this person will also inform the Financial Markets Authority within a time frame and according to the arrangements set by the General Regulations of the latter, with effect from when the limit to the holding is passed. If necessary, this information is made public under the conditions laid down by the General Regulations of the Financial Markets Authority.

Failure to make a due declaration under the above conditions will result in the shares exceeding the fraction that should have been declared by law having their voting right removed for any meeting of shareholders held within a period expiring two years after the date that the notification is dealt with.

Similarly, voting rights attaching to these shares and which are not duly declared may not be exercised or delegated by the defaulting shareholder.

The commercial court having jurisdiction for the registered office, at the request of the chairman of the Company, a shareholder or the Financial Markets Authority, holds sole jurisdiction to pronounce a total or partial suspen- sion, for a period not to exceed five years, of the voting rights of any shareholder who has not made the required declarations.

Article 13 - Indivisibility of shares - Bare ownership - Usufruct

1 - Shares are indivisible with respect to the Company.

Co-owners of undivided shares are represented at general meetings by one of these or by a single proxy. In the event of disagreement, the proxy is appointed by a court at the application of the most diligent co-owner.

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2 - The voting right belongs to the usufructuary at Ordinary General Meetings and to the bare owner at Extraordinary General Meetings. However, shareholders may agree any other distribution of the voting right at General Meetings. The agreement is notified by registered letter to the Com- pany, which will be required to apply this agreement at any meeting that takes place following expiry of a period of one month after such letter is sent.

The voting right is exercised by the owner where securities are pledged.

Article 14 - Double voting right

The voting right attaching to capital or dividend shares is proportional to the percentage of the capital that they represent. Each share gives an entitlement to one vote.

However, a voting right that is double that conferred on other shares, having regard to the percentage of the

capital that they represent, is attributed to all shares that are fully paid up, and which can be shown to have been registered to the same shareholder for at least two (2) years. This right is exercised subject to the provisions of No. 12.3 (5) of the Articles of Association.

This double voting right is also conferred from the time they are issued, in the event of an increase in capital through capitalization of reserves, profits or issue premiums, upon registered shares in a scrip issue to a shareholder based on previous shares providing such an entitlement.

The transfer of a share as a result of succession, liquidation of community of property between spouses or donation between living persons to a spouse or a parent entitled to inherit, does not result in loss of the right acquired and does not interrupt the periods provided for above.

Conditions for changing

The Articles of Association of the Company do not make

5.4.4shareholders' rights

any special provision that derogates from general com-

pany law.

5.4.5general meetings of shareholders (articles 24

  • 31 of the memorandum and articles of association)

Article 24 - Quorum and majority

General meetings deliberate under the conditions set by law.

The ordinary general meeting takes all decisions other than those reserved to the extraordinary general meeting by law and by these Articles of Association. It may not validly deliberate at the first calling unless the shareholders present or represented hold at least one fifth of shares with voting rights. At the second calling no quorum is required. It acts by a majority of the votes cast by the shareholders present or represented.

The extraordinary general meeting alone has the power to modify any of the provisions of the Articles of Associa- tion. It may not validly deliberate unless the shareholders present or represented hold at least one quarter of shares with voting rights at the first calling and one fifth of the shares at the second calling. In the absence of the latter quorum, the second meeting may be postponed to a later date not more than two months after that when it was originally called. It acts by a two-thirds majority of the votes cast by the shareholders who are present or represented.

Where videoconferencing or other means of telecommunication permitted by law is used under the conditions set out in Article 25 below, shareholders are deemed present for the purposes of calculating a quorum or majority where they take part by such videoconferencing or other means of telecommunications.

Article 25 - Calling of general meetings

General meetings are called either by the board of direc- tors, or by the auditors, or by a proxy appointed by a court under the conditions and arrangements laid down by law.

They take place at the head office or at any other location specified in the notice of the meeting.

Where shares in the Company are not traded on a regulated market or if all its shares are not registered shares, the Company is required to publish in the Bulletin des Annonces Légales Obligatoires (BALO - French Mandatory Legal Announcements Bulletin), at least thirty-five

  1. days before the meeting, a notice of such meeting containing the information required by the current regu- lations in force.

General meetings are called by publication in a journal authorized to carry legal notices in the department where the head office is based and also in the Bulletin des Annonces Légales et Obligatoires (BALO).

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However, the publications referred to in the above paragraph may be replaced by a call made, at the cost of the Company, by normal or registered letter sent to each shareholder. Such a call may also be sent by electronic means of telecommunication employed under the regulatory conditions.

If this is decided by the board at the time the meeting is called, any shareholder may also take part and vote in meetings by video-conference or by any other means of telecommunication allowing them to be identified, under the following conditions and according to the arrangements provided for by law and decree.

Any meeting not duly called may be canceled. However, cancelation may not take place if all shareholders are present or represented.

Article 26 - Meeting agenda

The agenda is set by whoever issues the notice of the meeting.

However, one or more shareholders representing at least 5% of the capital (or an association of shareholders meeting the legal conditions) are empowered to request, under the conditions laid down by law, the inclusion in the agenda of draft resolutions. Such a request must be accompanied by the text of the draft resolutions which may be accompanied by a brief outline of the reasoning.

These draft resolutions, which must be brought to the attention of the shareholders, are included in the agenda and put to a vote of the meeting.

The meeting may not deliberate on a matter that is not included in the agenda.

However, it may under any circumstances remove one or more directors and proceed with their replacement.

The agenda may not be changed if the meeting has to be called a second time.

When the meeting is called upon to deliberate on changes to the economic or legal organization of the Company, in respect of which the works council has been consulted in accordance with Article L.2323-6 of the French Labor Code, the opinion of the council is made known to the meeting.

Article 27 - Admission to meetings

Any shareholder may participate personally, by proxy, or by correspondence in general meetings, of whatever kind.

A legal right of participation in General Meetings exists:

  • for registered shares, as a result of the entry of these

in the books of registered shares kept by the Company at midnight at the start of the second working day prior to the meeting, Paris time;

  • for bearer shares, as a result of the entry of these in the books of bearer shares kept by the authorized interme- diary, at midnight at the start of the second working day prior to the meeting, Paris time.

The entry or registration of securities in the books of bearer shares kept by the authorized intermediary is acknowledged by a shareholding certificate issued by the latter.

However, the board of directors may reduce or remove these timings, provided that it is in the interests of shareholders.

Shareholders who have not settled their shares by making the payments due are not admitted to meetings.

Article 28 - Representation of shareholders and postal voting

I. Representation of shareholders

A shareholder may be represented by another shareholder or by their spouse.

Any shareholder may be empowered by other shareholders to represent them at a meeting, without any restriction other than those resulting from the legal provisions setting the maximum number of votes that the same person may hold in their own name and as a proxy.

II. Postal voting

Once the meeting has been called, a postal voting form and attachments will be sent, at the cost of the Company, to any shareholder who makes a written request for this.

The Company must comply with any request filed or received at the head office at the latest six days prior to the date of the meeting.

Article 29 - Officers for the meeting

Shareholder meetings are chaired by the chairman of the board of directors or, in his absence, by a director delegated for this purpose by the board. Failing this, the meeting elects a chairman itself.

Where a meeting is called by the auditors, a court-appointed proxy or by the liquidators, the meeting is chaired by whichever of these has called it.

The two attendees at such meeting holding the largest number of shares and accepting this function will act as vote tellers.

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The officers for the meeting will appoint a secretary, who need not be a shareholder.

deliberate properly, minutes to that effect are drawn up by the officers of said meeting.

Article 30 - Minutes of deliberations

The deliberations of shareholder meetings are recorded in minutes drawn up by the meeting officers and signed by them.

These will state the date and place of the meeting, how it was called, the agenda, the composition of the group of meeting officials, the number of shares participating in the voting and the quorum achieved, the documents and reports submitted to the meeting, a summary of the proceedings, the text of the resolutions voted upon and the outcome of these votes.

The minutes are recorded in a special register kept at the head office under the conditions laid down in the regulations.

If, in the absence of a quorum, a meeting is unable to

Article 31 - Shareholders' right of information and control

Before each meeting, the board of directors must make available to shareholders the documents necessary to allow them to speak in full knowledge of the facts and to come to an informed judgment on the functioning of the Company.

Upon receipt of the communication referred to above, any shareholder will be entitled to submit written questions, to which the board of directors will be required to respond during the meeting.

At any time, any shareholder has an entitlement to receive the documents that the board of directors is required, as the case may be, to keep available at the head office, or to send them, in accordance with the legislative and regulatory provisions in force.

5.4.6provisions of the memorandum and

articles of association, a charter or bylaws of the company that may have the effect of delaying, defering or preventing a change in its control

The Articles of Association of the Company do not make any special provision that derogates from general company law.

5.4.7 changes to the share capital (article 8 of

the memorandum and articles of association)

1 - The capital stock may be increased by any process and under any arrangements provided for by law.

Only an extraordinary general meeting is competent to decide on an increase in capital based on a report from the board of directors.

Shareholders have a preferential right, in proportion to the number of shares they hold, to subscribe to cash shares issued in order to increase the capital, and may waive this on an individual basis. The extraordinary meeting may decide to withdraw this preferential right of subscription in accordance with the statutory provisions.

2 - A reduction in capital is authorized or decided upon by the Extraordinary General Meeting and may in no case adversely affect the equality of shareholders.

A reduction in capital to below the legal minimum may only be decided subject to the condition precedent of an increase in capital intended to bring this up to at least the legal minimum, unless the Company converts into another form of company that does not require capital in excess of the share capital after it has been reduced.

Failing this, any interested party may seek a legal order to wind up the Company. This may not be issued if, on the day on which the court rules on the merits of the case, the situation has been regularized.

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5.5 particulars of the legal affairs of thecompany in the financial period

5.5.1 particulars of company representatives and auditors

Bonus shares and stock options

The historical allocation of stock options and stock warrants to the various corporate officers of the Company, as well as the options and warrants they exercised during the 2019 financial year, are detailed in section 4.5.1.

The historical allocation of free shares (preferential shares subject to performance conditions) to the various corporate officers, as well as the free shares that became available during the 2019 financial year, are detailed in section 4.5.1.

As at December 31, 2019, to the knowledge of the Company:

  • Stéphane Piat (chief executive officer and director) holds 10,900 shares in the Company (ie 0.09% of the capital).
  • The other current directors of CARMAT do not hold any shares in the Company.

Share transactions by the executives

We indicate below the transactions made by the directors and their relatives on the shares of the Company during the 2019 financial year, as declared by these officers and their relatives pursuant to the provisions of Articles 223-22 A and 223- 26 of the AMF General Regulation.

We also indicate the transactions carried out by these same people of which we are aware.

Persons concerned

Type of

Date of transaction

Number of

Value of

operation

shares

transaction

Lohas (Pierre Bastid)

Pledge

June 12, 2019

1,291,709

€26,222 k

Matra Défense (Airbus Group)

Subscription

September 18, 2019

336,842

€6,400 k

Lohas (Pierre Bastid)

Subscription

September 18, 2019

157,894

€3,000 k

Santé Holdings SRL (Antonino Ligresti)

Subscription

September 18, 2019

236,210

€4,488 k

5.5.2Information on the company's securities

Employee shareholding

In accordance with the provisions of Article L.225-102 of the French Commercial Code, we hereby indicate that the Company has not set up any company savings plan for the benefit of employees and that no agreement provides for employee participation in the capital of the Company.

On the other hand, certain employees of the Company are beneficiaries of stock options, stock warrants (BSA and BSPCE) and free shares (preferential shares subject to performance conditions), detailed in section 4.5.1 .

Table 9 in the section 4.5.1 specifies the number of stock subscription and purchase options granted to the first ten employees who are not corporate officers, and the options exercised by them during the 2019 financial year.

Table 10bis in section 4.5.1 specifies the number of free shares (subject to performance conditions) allocated to the first ten employees who are not corporate officers, and that of the free shares that became available to them during the 2019 financial year.

Dealings by the Company in its own shares

We are also obliged to report to you on purchases and sales by the Company of its own shares for the purposes of regulating the price, in accordance with the provisions of Article L.225-209-1 of the French Commercial Code.

During the period ended December 31, 2019, the Company made the following dealings in its own shares under the liquidity agreement entered into for a period of one year with an independent financial services provider, as authorized by the general meetings of April 5, 2018 (Resolution

9) and of March 28, 2019 (Resolution 9):

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  • purchase of 112,881 shares at an average price of €20.39;
  • sale of 110,972 shares at an average price of €20.34.

As at December 31, 2019, the Company held 4,170 treasury shares, i.e. 0.03% of the share capital.

Securities giving access to capital

In total, these securities confer subscription rights to 1,314,700 new shares (10.44% of the existing capital as at December 31, 2019).

For details on the securities giving access to the Com- pany's capital and in force, see Paragraph 5.2.5 « Other securities giving access to capital ».

Participating and controlling interests

In accordance with the provisions of Articles L.233-6 and L.247-1 of the French Commercial Code, we can report that the Company has not acquired any participating or controlling interests during the reporting period.

5.6 regulated

AGREEMENTS

5.6.1 regulated agreements description

royalties agreement

Under a royalties agreement signed on June 24, 2008 and amended by an addendum of February 5, 2010 between CARMAT, Professor Alain Carpentier and Matra Défense (a subsidiary of the Airbus Group) as a result of contributions made when the Company was established, it was agreed that CARMAT will pay Professor Alain Carpentier and Matra Défense a total sum equal to 2% of the direct net sales generated by the Total Artificial Heart in the countries covered by at least one of the patents initially contributed by them to the Company after obtaining CE marking and FDA authorization. These payments will be made on a half-yearly basis within thirty days of the end of each sixth-month period, according to a distribution between Professor Alain Carpentier and Matra Défense established in proportion to their holdings in the capital of the Company on the date it was established.

However, CARMAT may repurchase this right to royalties by paying Professor Alain Carpentier and Matra Défense, in proportion to their holdings in the capital of the Company on the date it was established, a total sum of €30 million less the amount of royalties already paid at the time this right to royalties is repurchased. This sum of €30 million is indexed-linked to the -Indice du Prix à la Production de l'Industrie et des Services aux Entreprises - Maté- riel médicochirurgical et d'orthopédie-exportation zone Euro - Code PVIC 3310921007M (Production prices index for industry and services to companies - Medico-surgical and orthopedic material for export in the Eurozone PVIC Code 3310921007M) with a base level of 100.3 in April 2008 as calculated and published by the French National Institute for Statistics and Economic Studies (INSEE).

Relations between CARMAT and the Scientific Research Association of the Alain Car- pentier Foundation

Owing to the specific competencies sought and historical relations, the Company maintains commercial relations with the Scientific Research Association of the Alain Car- pentier Foundation (ARSFAC) in the normal conduct of its business and ordinary financial conditions for the type of services performed.

It thus signed a collaboration agreement for medical research with ARSFAC on April 30, 2013 which was since renewed and last renewed on July 24, 2019 for the period from January 1 to December 31, 2019. Under the terms of this agreement, the Company committed to repay to ARS- FAC all the costs mentioned in the appendices to said agreement. For 2019 fiscal year, expenses of €20,460 excluding tax were recorded under this agreement.

Relations between CARMAT and the Marie Lan- nelongue Surgical Center (CCML)

Owing to the specific competencies sought, the Company maintains commercial relations with the Marie Lan- nelongue Surgical Center (CCML) in the normal conduct of its business and under ordinary financial conditions for the type of services performed.

It thus signed a collaboration agreement for medical research with CCML on June 12, 2014. Under the terms of this agreement, the Company undertook in particular to reimburse CCML for all the costs mentioned in the appendices to said agreement. For 2019, no expenses were recorded under this agreement.

As a reminder, Mr. Henri Lachmann, director of CARMAT, is chairman of the board of directors of CCML.

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information on the company and its capital

5.6.2special report of the statutory auditors on the regulated agreements

CARMAT SA

36, Avenue de l'Europe

78941 Vélizy-Villacoublay cedex

To the general meeting,

As auditors of your company, we present to you our report on regulated agreements.

It is our responsibility to communicate to you, on the basis of the information given to us, the characteristics and the essential terms and the reasons justifying the interest for the company of the agreements of which we have been informed or which we would have discovered at the time. opportunity of our mission, without having to pronounce on their usefulness and their merits nor to seek the existence of other conventions. It is your responsibility, under the terms of Article R. 225-31 of the French Commercial Code, to assess the interest involved in concluding these agreements with a view to their approval.

In addition, it is our responsibility, if applicable, to provide you with the information provided for in Article R. 225- 31 of the French Commercial Code relating to the execu- tion, during the past financial year, of agreements already approved by the general meeting.

We have performed the due diligence that we have deemed necessary in light of the professional standards of the National Company of Auditors relating to this engagement. These procedures consisted in verifying the concordance of the information given to us with the basic documents from which it came.

AGREEMENTS SUBMITTED FOR THE APPROVAL OF THE GENERAL MEETING

We inform you that we have not been given notice of any agreement or commiments authorized during the past financial year to be submitted for the approval of the general meeting in application of the provisions of Article L. 225-38 of the Code. of business.

AGREEMENTS and commitments ALREADY APPROVED BY THE GENERAL MEETING

Agreements approved in previous years

a) with execution during the past financial year

Pursuant to Article R.225-30 of the French Commercial Code, we have been informed of the continuation of the

following agreements, which have already been approved by the General Meeting in previous financial years, and which have been enforced during the past financial year.

RESEARCH COLLABORATION AGREEMENT WITH THE SCIENTIFIC RESEARCH ASSOCIATION OF THE ALAIN CARPENTIER FOUNDATION (ARSFAC)

A medical collaboration contract had been concluded with ARSFAC as of January 1, 2014. This contract, renewed on July 24, 2019, covers animal training trials. Under the terms of this agreement, your company undertakes to reimburse the costs incurred by ARSFAC as described in the appendix to the said contract.

During the 2019 financial year, and under this contract, your Company reimbursed ARSFAC an amount of € 20,460 (Taxes excluded).

Mr. Alain Carpentier, director of your Company until March 28, 2019, is a founding member and chairman of the board of directors of ARSFAC.

b) without execution during the past financial year

Pursuant to Article R.225-30 of the French Commercial Code, we have been informed of the continuation of the following agreements, which have already been approved by the General Meeting in previous financial years, and which have not been enforced during the past financial year.

RESEARCH COLLABORATION AGREEMENT WITH THE MARIE-LANNELONGUE SURGERY CENTER (CCML)

A collaboration contract for the training of clinical teams had been concluded with the CCML as of January 1, 2014. Under the terms of this agreement, your company undertakes to reimburse the costs incurred by the CCML as described in the appendix to the said contract.

No expenses were recorded under this agreement for the past fiscal year.

Mr. Henri Lachmann, director of your company, is Chairman of the CCML Board of Directors.

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ROYALTIES AGREEMMENT BETWEEN CARMAT («COM- PANY»), PROFESSOR ALAIN CARPENTIER AND MATRA DEFENSE

On June 24, 2008, the Company signed a royalty agreement (hereinafter «the Agreement») with Professor Alain Carpentier and Matra Défense, the founding shareholders of the Company. Under this Contract, the Company undertakes to pay to Professor Alain Carpentier and Matra Défense 2% of the net sales proceeds of the CARMAT artificial heart manufactured and distributed by CARMAT SAS, this amount to be divided between the two beneficiaries in proportion to their respective share in the capital of the Company on the date of its creation. These royalties will be payable every 6 months within thirty days after the end of each six-month period, from the first marketing of the CARMAT Artificial Heart and until the expiry of the patents presented in Appendix 1 of the Contract.

The Company is also authorized to redeem at any time the right to benefit from these royalties for an amount of

  • 30,000,000 reduced by the royalties already paid under this contract, this total amount being divided between the two beneficiaries in proportion to their respective share in the capital of the Company on the date of its creation. This amount of 30,000,000 euros is indexed to the Produ- cer Price Index of the Business Services Industry - Euro- area orthopedic and orthopedic equipment.

The rights thus allocated to Professor Alain Carpentier and Matra Défense are not transferable.

As at December 31, 2019, since your Company has not yet obtained the CE marking and the marketing authorization from the FDA, no royalty has been paid under the Contract.

Signed in Neuilly-Sur-Seine and Paris,

Thursday March 12, 2020,

The statutory auditors

PRICEWATERHOUSCOOPERS

LISON CHOURAKI

AUDIT

AUDIT

THIERRY CHARRON

LISON CHOURAKI

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ADDITIONAL

information

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6.1 AUTHOR OF THE UNIVERSAL REGISTRATION DOCUMENT

6.1.1

name of the author of the

universal registration

document

Stéphane Piat, CARMAT's chief executive officer, is the author of the universal registration document.

6.1.2 declaration of the author of the UNIVERSAL registration document

"Having taken all reasonable steps to verify the contents of this 2019 universal registration document, I affirm that the information contained therein is accurate to the best of my knowledge, and that no material information has been omitted.

that the management report, for which a cross-reference table appears at paragraph 6.7.2 of this document, gives a true and fair picture of changes to the business, results and financial situation of the Company and and that it describes the main risks and uncertainties it faces."

Vélizy-Villacoublay, Thursday, March 12, 2020,

I confirm, to the best of my knowledge, that the financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the Company's financial situation and results, and

Stéphane Piat

Chief executive officer, CARMAT

6.2 statutory auditors

6.2.1 statutory auditors in office

PricewaterhouseCoopers Audit, member of the Regional Auditors' Association of Versailles.

Represented by Mr Thierry Charron

63, rue de Villiers - 92200 Neuilly-sur-Seine

Date of commencement of duties: appointed upon the incorporation of the Company on June 25, 2008. Duration of current term: 6 financial years, following renewal of the mandate at the general meeting of June 24, 2015.

Expiry of current term: at the end of the general sharehol- ders' meeting to approve the accounts for the year ending December 31, 2020.

Lison Chouraki Audit, member of the Auditors' Association of Paris

Represented by Ms Lison CHOURAKI

3, rue Anatole de la Forge - 75017 Paris

Date of commencement of duties: Wednesday, June 24, 2015.

Duration of current term: 6 financial years.

Expiry of current term: at the end of the general sharehol- ders' meeting to approve the accounts for the year ending December 31, 2020.

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6.2.2 alternate auditors

Mr Jean-ChristopheGEORGHIOU, member of the Regional Auditors' Association of Versailles

63, rue de Villiers - 92200 Neuilly-sur-Seine

Date of commencement of duties: Wednesday, June 24, 2015.

Duration of current term: 6 financial years.

Expiry of current term: at the end of the general sharehol- ders' meeting to approve the accounts for the year ending December 31, 2020.

Ms. Soulika BENZAQUEN, member of the Auditors' Association of Paris

5, rue de Prony - 75017 Paris

Date of commencement of duties: October 16, 2008.

Duration of current term: 6 financial years, following renewal of the mandate at the general meeting of June 24, 2015.

Expiry of current term: at the end of the general sharehol- ders' meeting to approve the accounts for the year ending December 31, 2020.

statutory auditors who

Since their appointment, the statutory auditors and their

6.2.3 resigned, were dismissed

substitutes have not been dismissed from their positions,

or were not reinstated

nor have they resigned.

6.3 Information from third parties, declarations by experts and declarations of interest

None.

6.4 Publicly accessible documents and 2017-2018 historical information

Copies of this universal registration document are available free of charge from the Company and from the Com- pany's website (www.carmatsa.com) and from the website of the French Financial Markets Authority (www.amf- france.org).

All documents which must be made available to shareholders (such as the articles of association, minutes of general meetings, historical financial information and the valuations and declarations made by an expert at the Company's request included or referred to in this universal registration document) may be consulted at the Com- pany's registered office at 36, avenue de l'Europe - 78140 Vélizy-Villacoublay.

All regulatory information, as defined in Article 221-1 of the General Regulations of the AMF, is available on the Com- pany's website.

The historical financial information as at December 31, 2017 and December 31, 2018 that is incorporated by reference into the present universal registration document was previously presented in the 2017 registration document and the 2018 registration document, which were filed with the Financial Markets Authority respectively on March 22, 2018 under number D.18-0169 and on March 12, 2019 under number D.19-0135, and was the subject of reports by the statutory auditors which contained no observations.

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6.5 information on holdings

As at the date of this universal registration document, the Company did not have any holdings in the share capital of other companies.

6.6 recent events

Since the end of the 2019 financial year, the Company has published the following press releases:

  • On February 5, 2020, a press release entitled: CARMAT announces FDA full approval to initiate US clinical fea- sibility study of its total artificial heart.
  • On February 12, 2020, a press release entitled: CAR- MAT reports its 2019 annual results and confirms its 2020 development prospects.
  • On February 17, 2020, a press release entitled: CARMAT confirms the submission of a « Forfait Innovation » dossier in France and its eligibility with observations received from the French National Autho- rity for Health (HAS).
  • On March 10, 2020, a press release entitled: CARMAT announces that it has achieved record individual sup- port of 2 years with its bioprosthesis.

The full text of these press releases may be viewed on the Company's website, http://www.carmatsa.com/fr/ investisseurs/documentation/communiques-de-presse.

CARMAT plans to communicate on the overall progress of the CE marking or on the completion of significant milestones in its clinical trials. In accordance with good clinical practice and subject to regulatory requirements or special circumstances, CARMAT will not communicate individually on patient implantations and their health status.

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6.7 cross-reference tables

6.7.1 cross-reference table of

the universal registration document

CHAPTER 1

PERSONS RESPONSABLE

1.1. Name of the author of the registration document

Paragraph 6.1.1

1.2. Declaration of the author of the registration document

Paragraph 6.1.2

1.3. Experts reports

Not applicable

1.4. Information sourced from a third party

Not applicable

1.5. Statement from the designated authority with no prior aprroval

Page 2

CHAPTER 2

STATUTORY AUDITORS

2.1. Statutory auditors in office and alternate auditors

Paragraphs 6.2.1 and 6.2.2

2.2. Statutory auditors who resigned, were dismissed or were not reinstated

Paragraph 6.2.3

CHAPTER 3

RISK FACTORS

3.1. Risks relating to the Company's activity

Chapter 2

CHAPTER 4

INFORMATION CONCERNING THE ISUER

4.1. Legal and commercial name of the issuer

Paragraph 5.1.1

4.2. Place, number of registration and LEI

Paragraph 5.1.2

4.3. Date of incorporation and lengh of life of the issuer

Paragraph 5.1.3

4.4. Headquarter and legal form of the issuer, applicable legislation

Paragraph 5.1.4

CHAPTER 5.

BUSINESS OVERVIEW

5.1. Main activities

Paragraph 1.3

5.2. Main markets

Paragraphs 1.1 and 1.2

5.3. Important events in the development of the Company

Paragraphs 3.1.1, 3.1.3 and 3.1.4

5.4. Issuer strategy and objectives

Paragraph 1.5

  • 5.5. Degree of dependency on patents, licenses, manufacturing, sales or financial contracts

or new manufacturing processes

Paragraph 1.5.4

5.6. Assessment of the Company's competitive position

Paragraph 1.2.2

5.7. Main investments

Paragraph 3.1.2

CHAPTER 6.

ORGANIZATIONAL STRUCTURE

6.1. Summary description of the group

Paragraph 5.1.5

6.2. List of major subsidiaries

Not applicable

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CHAPTER 7.

OPERATING AND FINANCIAL REVIEW

7.1. Financial condition

Paragraph 3.1.1

7.2. Operating result

Paragraph 3.1.1

CHAPTER 8.

CAPITAL RESOURCES

8.1. Information on the capital

Paragraph 3.2.1

8.2. Cash flow

Paragraph 3.2.1

8.3. Borrowing conditions and financing structure

Paragraphs 3.1.1 and 3.1.10

8.4. Restrictions on the use of capital

Paragraph 3.1.10

8.5. Anticipated sources of finance

Paragraph 3.1.1

CHAPTER 9.

REGULATORY ENVIRONMENT

9.1. Regulatory environment

Paragraph 1.4

CHAPTER 10.

TREND INFORMATION

10.1. Main trends since the end of the previous fiscal year

Paragraph 3.1.4

10.2. Known trend or event likely to influence the outlook of the issuer

Paragraph 3.1.4

CHAPTER 11.

PROFIT FORECASTS OR ESTIMATES

11.1 Profit forecasts or estimates

Not applicable

11.2. Main assumptions relating to forecasts

Not applicable

11.3. Compliance and comparability of forecasts with respect to the issuer's accounting methods

Not applicable

CHAPTER 12.

ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

12.1. Administrative bodies

Paragraph 4.1

12.2. Conflicts of interest

Paragraph 4.2

CHAPTER 13.

REMUNERATION AND BENEFITS

13.1. Remuneration and benefits in kind

Paragraph 4.5.1

  • 13.2. Total amount of sums provisioned or otherwise booked for payment of pensions,

retirement or other benefits

Paragraph 4.5.2

CHAPTER 14.

BOARD PRACTICES

14.1. Management and governance of the Company

Paragraphs 4.4.2 to 4.4.6

14.2. Service contracts with the members of the administrative, management and supervisory bodies Not applicable

14.3. Information on committees

Paragraph 4.3

14.4. Compliance with the corporate governance recommendations

Paragraph 4.4.1

14.5. Potential significant impacts on corporate governance

Not applicable

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CHAPTER 15.

EMPLOYEES

15.1. Number of employees

Paragraph 4.6.1

15.2. Investment and stock options

Paragraph 4.6.2

15.3. Employee involvement in issuer's capital

Paragraph 4.6.3

CHAPTER 16.

MAJOR SHAREHOLDERS

16.1. Shareholders holding as at December 31, 2016

Paragraph 5.3.1

16.2. Existence of different voting rights

Paragraphs 5.3.1 and 5.3.2

16.3. Control of the issuer

Paragraph 5.3.3

16.4. Agreements that could bring about a change in control

Paragraphs 5.3.3 and 5.3.4

CHAPTER 17.

RELATED PARTY TRANSACTIONS

17.1. Related agreements description

Paragraph 5.6.1

CHAPTER 18.

FINANCIAL INFORMATION CONCERNING THE ISSUER'S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES

18.1. Historical financial information

Paragraph 3.2

18.2. Interim and other financial information

Not applicable

18.3. Auditing of the annual historical financial information

Paragraph 3.3

18.4. Pro-forma financial information

Not applicable

18.5. Dividend policy

Paragraph 3.1.7

18.6. Legal and arbitration proceedings

Not applicable *

18.7. Significant changes in the financial or trading position

Not applicable

CHAPTER 19.

SUPPLEMENTARY INFORMATION

19.1. Share capital

Paragraph 5.2.1

19.2. Memorandum and Articles of Association

Paragraph 5.4

CHAPTER 20.

IMPORTANTS CONTRACTS

20. Importants constracts

Paragraph 3.1.10

CHAPTER 21.

DOCUMENTS ON DISPLAY

21.1. Publicly accessible documents

Paragraph 6.4

*: To the best of the Company's knowledge, there is no litigation, arbitration, governmental or judicial procedure, or exceptional event, likely to have or having had in the last 12 months significant effects on the financial situation or the profitability of the Company.

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6.7.2 CROSS REFERENCE TABLE OF THE ANNUAL FINANCIAL REPORT

DECLARATION OF THE PERSON RESPONSIBLE FOR THE ANNUAL FINANCIAL REPORT

Declaration of the person responsible for the annual financial report

Paragraph 6.1.2

MANAGEMENT REPORT

Analysis of the financial situation

Paragraphe 3.1

Risks factors

Chapter 2

  • Information related to share capital and elements likely to have an influence in

the case of a public offering

Paragraph 5.2

Acquisition by the Company of its own shares

Paragraph 5.5.2

  • Summary table of currently valid delegations made by the shareholders' general meeting

to the board of directors concerning capital increases

Paragraph 5.2.6

Participation of employees in the capital

Paragraph 5.5.2

Remuneration of corporate board members and management and list of mandates

Paragraphs 4.5.1 and 4.1.1

  • Internal control and risk management procedures relating to the preparation and processing

of accounting and financial information

Paragraph 3.4

FINANCIAL STATEMENTS AND REPORTS

Corporate financial statements

Paragraph 3.2

Auditors'report on the corporate financial statements

Paragraph 3.3

Consolidated financial statements

Not applicable

Auditors'report on the consolidated financial statements

Not applicable

Auditors'fees

Paragraph 3.2.2.5

6.7.3 CROSS REFERENCE TABLE OF THE corporate governance report

List of mandates and functions fulfilled by each corporate officer during the financial year

Paragraph 4.1

Regulated agreements

Paragraph 5.6

Share capital authorized by the general meeting

Paragraph 5.2.6

Choice in terms of the methods of exercise of the general management (Chairman vs CEO)

Paragraph 4.4.4

6.8 glossary

Accident vasculaire cérébral (AVC)

Sudden neurological deficit of vascular origin caused by an infarctus or a hemorrhage in the brain.

Actuator

A device that controls the movement of a fluid or a solid.

Clinical Trial Authorization (CTA)

Authorization issued by the ANSM. One of two authorizations required to carry out biomedical research on humans

in France, the other being that of the Ethics Committee (Comité de Protection des Personnes - CPP: see corresponding entry).

AFSSAPS

French Health Products Safety Agency (Agence Française de Sécurité Sanitaire des Aliments et Produits de Santé). This agency judges and monitors the safe use of health products, examines their quality in the laboratory and inspects their production, distribution and testing sites. It

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also produces information campaigns to ensure the cor-

Coagulation (blood)

rect use of health products. It was replaced by the ANSM

Phenomenon of blood clot formation. It is the body's nor-

(see corresponding entry) through law n° 2011-2012 of

mal reaction to stop a hemorrhage. Nevertheless, when

December 29, 2011.

clots form in the heart, a blood vessel or in a device, they

may obstruct a blood vessel and can cause a pulmonary

Annuloplasty

embolism or cerebrovascular accident

Intervention with the aim of correcting a mitral insuffi-

ciency linked to an expansion of the mitral annulus.

Total orthotopic artificial heart

Artificial cardiac prosthesis (or total artificial heart - TAH)

ANSM

intended to completely replace the natural heart. It is

French National Agency for Medicines and Health Pro-

different from ventricular assistance which functions in

ducts Safety (Agence nationale de sécurité du médica-

parallel to the diseased heart.

ment et des produits de santé - ANSM). This is a French

public institution whose objective is to evaluate the health

Critical Event Committee (CEC)

risks of health products for humans. It has authority over

Committee consisting of members who are totally inde-

the regulation of biomedical research.

pendent of the sponsor and study investigators, esta-

blished as part of the ISO 13485 standard and the Good

Platelet antiaggregant

Clinical Practice (GCP) guidelines: its role is to review all

Drug preventing the blood platelets, which are partly res-

adverse events, serious or otherwise, and to determine

ponsible for the coagulation phenomenon (see correspon-

their causal link with the device under investigation.

ding entry) of blood, from sticking together and forming

the beginning of a clot. The most well known is aspirin.

Ethics Committee (Comité de Protection des Personnes

- CPP)

Anticoagulant

Ethics committee whose role is to ensure that all biome-

Drug limiting blood-clotting to avoid the formation of

dical research projects on humans carried out in France

clots by acting on coagulation factors other than plate-

complies with the various considerations (medical, ethi-

lets (see previous entry). Their dosing is complicated:

cal and legal) aimed at ensuring the protection of the per-

too much risks hemorrhages, not enough risks throm-

sons participating in the research.

boembolic accidents. Their use at high doses is required

for all implantable metallic or plastic devices which

Safety Committee (DSMB)

are not hemocompatible and are the source of many

DSMB: Data Safety and Monitoring Board.

complications.

Committee consisting of members who are totally inde-

pendent of the sponsor and study investigators, esta-

Aorta

blished as part of the ISO 13485 standard and the Good

The aorta is the largest artery of the body and allows

Clinical Practice (GCP) guidelines: its role is to review

oxygenated blood to be supplied from the left ventricle to

all study data and to issue an opinion to the sponsor on

all parts of the body.

whether to continue with inclusions in the clinical study.

Pulmonary artery

Arteries that carry blood from the heart to the lungs.

Compliance

In medical terms, the ability of an organic cavity to change volume under the influence of a variation in pressure.

Betablockers

Drugs which reduce the cardiac rhythm and output to

Research Tax Credit (RTC)

decrease blood pressure.

Financial aid created to encourage research and develop-

ment efforts in companies.

Bioprosthetic (valve) or bioprosthesis

Artificial valve manufactured from animal tissues in order

Diastole

to replace a failing heart valve. By extension, it refers to a

Relaxation phase of the muscle of a cardiac cavity that

medical device containing biological components.

allows it to be filled.

Bpifrance

Diuretic

French public investment bank - Banque Publique d'Inves-

Drug to remove excess fluids and, in this way, lighten the

tissement française (which has incorporated the activities

load on the heart and prevent pulmonary edema.

of Oseo Innovation, e.g. ANVAR, aiming to promote inno-

vation through financial guarantees and partnerships).

Pulmonary embolism

Situation where a blood clot blocks a pulmonary artery.

Cardiogenic shock

Inability of the myocardial pump to generate a blood flow

Ex vivo

rate sufficient for the peripheral organs.

Refers to tests which are performed on cadavers (see In

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vivo).

Etiology

Medical field which studies and analyses the causes of diseases.

FDA - Food & Drug Administration.

American regulatory agency that authorizes the marketing of drugs and medical devices in the United States.

Altered ejection fraction:

Is termed terminal chronic heart failure affecting a patient whose ejection capacities are reduced to less than 40%.

HDE - Humanitarian Device Exemption

FDA approval process allowing a device to be marketed without evidence of effectiveness (only data relating to the safety of the device are required). The FDA calls a device approved in this way an HUD (Humanitarian Use Device : Device for compassionate use). This approval limits the number of devices that can be released on the US market to 4,000 per year.

Red blood corpuscles

Red blood cells.

Hemocompatibility

The biological compatibility quality of non-living materials used in a medical device in contact with blood and other biological organs.

Hemolysis

Destruction of red corpuscles with the release of hemoglobin into the blood plasma, thus reducing the capacity to transport oxygen.

HUD

See HDE.

Hyperlipidemia

Pathology referring to the dysfunctions caused by an increased level of fat in the blood.

High blood pressure

Cardiovascular disease characterized by an arterial pressure greater than the norm and causing an increase in the left ventricular volume.

Hypertrophy

Excessive growth of an organ or an element of the body.

IDE - Investigational Device Exemption

Approval process allowing a device to be used during a clinical study with the aim of generating the safety and efficacy data required to obtain a PMA.

Immunosuppressant

An agent that limits the immune reactions of the organism in order to reduce the rejection risks following

the transplantation of a graft. The most well known is cyclosporin.

Incidence

The number of new cases of a disease observed during a given period and in a determined population. It differs from the prevalence, which is a status measurement which counts all the cases (new or not) at a given time.

Myocardial infarction

Necrosis (death) of part of the cardiac muscle. In plain lan- guage, heart attack. It occurs when one or more coronary arteries become blocked so that the cells of the myocardium (the muscle that makes up the heart), irrigated by this artery (or these arteries), are no longer oxygenated, thereby causing them to suffer (pain felt) and possibly resulting in their death.

Angiotensin-convertingenzyme (ACE) inhibitorsDrugs reducing vascular resistance.

Inotrope

Drug increasing the contractility of the cardiac muscle. Dependence on inotropes marks the terminal phase of heart failure.

In silico

Refers to tests which are performed on computers and/or by digital simulation.

Acute cardiac insufficiency

Sudden incapacity of the heart to provide a sufficient blood flow to deal with the oxygen needs of the various organs. The symptoms are severe. It occurs either following a heart attack (see myocardial infarction) that caused lesions to an area of the heart, or following a sudden incapacity of the body to compensate for chronic cardiac insufficiency (see decompensation).

Chronic cardiac insufficiency

The incapacity of the heart to provide sufficient blood flow to deal with the oxygen needs of the various organs. The main causes of chronic cardiac insufficiency are angina and myocardial infarction, high blood pressure, valvular disease and degenerative diseases of the myocardium. In each of these cases, the result is the progressive destruction of the cardiac muscle with loss of its contractile power.

In vitro

Refers to tests which take place outside of the organism, in the laboratory or on a test bench. Originally, these tests were carried out in glass tubes.

In vivo

Refers to tests which are performed in living organisms. (also see ex vivo)

Ischemia

Decrease of the arterial blood flow to an organ.

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Coronary disease

Decrease in the power of one or more arteries of the heart (or coronary arteries) and brings about angina and myocar- dial infarction (or heart attack).

CE marking

A declaration from the manufacturer certifying that the product complies with the applicable legal requirements and with the European directives (meeting a number of safety, efficacy and traceability of manufacture, etc. conditions).

Mitral (valve)

Cardiac valve which separates the left auricle from the left ventricle.

New York Heart Association (NYHA)

A scale based on symptoms that aims to quantify and monitor the functional impact (on activity) of cardiac insufficiency for an individual.

ISO standard

Standard created by the International Organization for Standardization (ISO) in order to guarantee reliable and good quality products and services.

Pulmonary edema

Invasion of the pulmonary alveoli by blood plasma that has passed through the wall of the capillaries (small vessels). Acute pulmonary edema (APE) is an absolute emergency and the common consequence of cardiac decompression.

Medical Board

Professional, administrative and legal body for the defense and regulation of the medical profession in France.

Auricle (atrium)

One of two small upper cavities in the heart which receives blood before passing it into the corresponding ventricle. Each auricle communicates with the corresponding ventricle through an atrioventricular valve, the tricuspid valve on the right and the mitral valve on the left.

Orthotopic

Refers to the transplantation of an organ to its normal anatomical location.

Chemically treated animal pericardium

A double-walled sack that contains the heart and the roots of the large blood vessels of animal origin (bovine, porcine or equine) treated with a sterilizing fixative, glutaraldehyde. It is known to be the least thrombogenic biomaterial and does not bring about the rejection phenomenon.

Fuel cell

Cell in which electricity is produced through the oxidation on an electrode of a reduction fuel (for example hydrogen) coupled with the reduction on the other electrode of an oxidant, such as oxygen from the air.

PMA - Pre-Market Approval

FDA approval process before the marketing of a device. It requires exhaustive safety and effectiveness data, notably by means of a clinical study (IDE).

Prevalence

Measurement of the state of health of a population at a given time which can be expressed as a percentage. For a given pathology, the prevalence is obtained by dividing the number of people affected at a given time by the size of the total population.

Product Lifecycle Management (PLM)

The software used to create and maintain the definition of products throughout their life cycle, from the issuing of the quotation until the end of its life. PLM covers the management of the definition of products, including configuration management, development management and project management.

Polyetheretherketone (PEEK)

A high performance plastic with a unique combination of properties, used for its strength in the medical, aeronautical, automobile, electronics, food and industrial sectors.

Polyurethane

A plastic material used in varnishes, paints and synthetic rubbers obtained by polymerization.

Proteinic Concerning proteins.

PulsatileAnimated by rhythmic pulsations of the heart beat.

Clean room

Room or suite of rooms where the concentration of particles is controlled in order to minimize the introduction, generation and retention of particles inside, generally with a specific industrial or research aim. Parameters such as temperature, humidity and relative pressure are also maintained at a precise level.

Whole human blood

This is blood with all its constituents, in particular plasma, red corpuscles, white corpuscles and platelets.

Septicemia

Serious generalized infection of an organism due to the discharges of pathogenic bacteria in the blood.

HIL simulator

A real time simulator that makes the computers believe they are navigating the actual system (Hardware in the Loop test principle).

Stasis

In medical terms, this refers to the abnormal stagnation of blood in an organ.

Systole

Phase of contraction of the muscle of a cardiac cavity

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allowing ejection of the blood it contains.

Telemetry

Means of monitoring certain biological, particularly car- dio-respiratory, parameters or technical parameters, at a distance.

Thrombosis

Obturation, through the formation of a clot (thrombus), of an arterial or venous blood vessel or of a cardiac cavity (embolism). The blood no longer flows and the organs are no longer supplied with it.

Thromboembolic

Ailment characterized by the formation of coagulated blood clots in veins (thrombus) which, upon detaching, risk causing embolisms (sudden blockages of blood vessels).

Thrombogenic, thrombogenicity

Refers to causing a thrombus (blood clot).

Destination therapy

Definitive implantation - Destination Therapy, as opposed to the pending transplantation indication (Bridged Therapy) Transplantation Surgical operation consisting of replacing a diseased organ with a healthy one.

Vasodilator

Drug which relaxes the blood vessels to increase the blood and oxygen flow to the heart without increasing its workload.

Design and production:

Genesta Finance - 33 1 45 63 68 60

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Carmat SA published this content on 13 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2020 17:39:06 UTC