##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 20-F





(Mark One)

|☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2016

OR



|☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

OR



|☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report

Commission file number 001-37452





CELYAD S.A.

(Exact name
of Registrant as specified in its charter and translation of Registrants name into English)





Belgium

(Jurisdiction of incorporation or organization)

Rue Edouard Belin 2

1435 Mont-Saint-Guibert, Belgium

(Address of principal executive offices)



Christian Homsy, MD, MBA

Chief Executive Officer

Celyad SA

Rue Edouard
Belin 2

1435 Mont-Saint-Guibert, Belgium

Tel: +32 10 394 100 Fax: +32 10 394 141

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.



|                                                                  |  |                                          
|----------------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                               |  | Name of each exchange on which
registered
|American Depositary Shares, each representing one ordinary share, |  | The Nasdaq Stock Market LLC              
|Ordinary shares*                                                  |  | The Nasdaq Stock Market LLC*             



|* | Not for trading, but only in connection with the registration of the American Depositary Shares.
|- | ------------------------------------------------------------------------------------------------

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the Annual
Report.

Ordinary shares: 9,313,603 as of December 31, 2016





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    ☐  Yes    ☒  No

If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ☐  Yes    ☒  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☐  Yes    ☒  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐               
  Accelerated filer  ☐                 Non-accelerated filer  ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
|U.S. GAAP  ☐ |  | International Financial Reporting Standards as issued
by the International Accounting Standards Board  ☒ |  | Other  ☐

If Other has been checked in response to the previous question, indicate by check mark which financial statement
item the registrant has elected to follow.    ☐  Item 17    ☐  Item 18

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No









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TABLE OF CONTENTS



|                                                  |  |                                                            |  |      |     | 
|------------------------------------------------- |  | ---------------------------------------------------------- |  | ---- | --- | 
|                                                  |  |                                                            |  | PAGE |    
|INTRODUCTION                                      |  |                                                            |  |     
|                                                  | 
|SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS |  |                                                            |  |     
|                                                  |  |                                                           
|PART I                                            |  |                                                            |  |      |     | 
|Item 1.                                           |  | Directors, Senior Management and Employee                  |  |      | 4   | 
|Item 2.                                           |  | Offer Statistics and Expected Timetable                    |  |      | 4   | 
|Item 3.                                           |  | Key Information                                            |  |      | 4   | 
|                                                  |  | A. Selected Financial Data                                 |  |      | 4   | 
|                                                  |  | B. Capitalization and Indebtedness                         |  |      | 5   | 
|                                                  |  | C. Reasons for the Offer and Use of Proceeds               |  |      | 5   | 
|                                                  |  | D. Risk Factors                                            |  |      | 5   | 
|Item 4.                                           |  | Information on the Company                                 |  |      | 42  | 
|                                                  |  | A. History And Development Of The Company                  |  |      | 42  | 
|                                                  |  | B. Business Overview                                       |  |      | 42  | 
|                                                  |  | C. Organizational Structure                                |  |      | 71  | 
|                                                  |  | D. Property, Plants and Equipment                          |  |      | 71  | 
|Item 4A.                                          |  | Unresolved Staff Comments                                  |  |      | 72  | 
|Item 5.                                           |  | Operating and Financial Review and Prospects               |  |      | 73  | 
|                                                  |  | A. Operating Results                                       |  |      | 75  | 
|                                                  |  | B. Liquidity and Capital Resources                         |  |      | 83  | 
|                                                  |  | C. Research and Development                                |  |      | 87  | 
|                                                  |  | D. Trend Information                                       |  |      | 87  | 
|                                                  |  | E. Off-Balance Sheet Arrangements                          |  |      | 87  | 
|                                                  |  | F. Tabular Disclosure of Contractual Obligations           |  |      | 87  | 
|                                                  |  | G. Safe Harbor                                             |  |      | 88  | 
|Item 6.                                           |  | Directors, Senior Management and Employees                 |  |      | 88  | 
|                                                  |  | A. Directors and Senior Management                         |  |      | 88  | 
|                                                  |  | B. Compensation of Directors and Executive Management Team |  |      | 93  | 
|                                                  |  | C. Board Practices                                         |  |      | 97  | 
|                                                  |  | D. Employees                                               |  |      | 98  | 
|                                                  |  | E. Share Ownership                                         |  |      | 98  | 
|Item 7.                                           |  | Major Shareholders and Related Party Transactions          |  |      | 98  | 
|                                                  |  | A. Major Shareholders                                      |  |      | 98  | 
|                                                  |  | B. Related Party Transactions                              |  |      | 100 | 
|                                                  |  | C. Interests of Experts and Counsel                        |  |      | 102 | 
|Item 8.                                           |  | Financial Information                                      |  |      | 103 | 
|                                                  |  | A. Consolidated Statements and Other Financial
Information |  |      | 103 | 
|                                                  |  | B. Significant Changes                                     |  |      | 103 | 
|Item 9.                                           |  | The Offer and Listing                                      |  |      | 103 | 
|                                                  |  | A. Offer and Listing Details                               |  |      | 103 | 
|                                                  |  | B. Plan of Distribution                                    |  |      | 104 | 
|                                                  |  | C. Markets                                                 |  |      | 104 | 
|                                                  |  | D. Selling Shareholders                                    |  |      | 104 | 
|                                                  |  | E. Dilution                                                |  |      | 104 | 
|                                                  |  | F. Expenses of the Issue                                   |  |      | 104 | 
|Item 10.                                          |  | Additional Information                                     |  |      | 105 | 
|                                                  |  | A. Share Capital                                           |  |      | 105 | 
|                                                  |  | B. Memorandum and Articles of Association                  |  |      | 105 | 
|                                                  |  | C. Material Contracts                                      |  |      | 105 | 
|                                                  |  | D. Exchange Controls                                       |  |      | 105 | 
|                                                  |  | E. Taxation                                                |  |      | 105 | 
|                                                  |  | F. Dividends and Paying Agents                             |  |      | 114 | 
|                                                  |  | G. Statement by Experts                                    |  |      | 114 | 
|                                                  |  | H. Documents on Display                                    |  |      | 114 | 
|                                                  |  | I. Subsidiary Information                                  |  |      | 114 | 



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|          |  |                                                                              |  |  |     | 
|--------- |  | ---------------------------------------------------------------------------- |  |  | --- | 
|Item 11.  |  | Quantitative and Qualitative Disclosures About Market Risk.                  |  |  | 114 | 
|Item 12.  |  | Description of Securities Other than Equity Securities                       |  |  | 116 | 
|          |  | A. Debt Securities                                                           |  |  | 116 | 
|          |  | B. Warrants and Rights                                                       |  |  | 116 | 
|          |  | C. Other Securities                                                          |  |  | 116 | 
|          |  | D. American Depositary Shares                                                |  |  | 116 | 
|          |  |                                                                             
|PART II   |  |                                                                              |  |  |     | 
|Item 13.  |  | Defaults, Dividend Arrearages and Delinquencies                              |  |  | 118 | 
|Item 14.  |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  |  | 118 | 
|Item 15.  |  | Controls and Procedures                                                      |  |  | 119 | 
|Item 16.  |  | Reserved                                                                     |  |  |     | 
|Item 16A. |  | Audit Committees - Financial Expert                                          |  |  | 120 | 
|Item 16B. |  | Code of Business and Ethics                                                  |  |  | 120 | 
|Item 16C. |  | Principal Accountant Fees and Services                                       |  |  | 121 | 
|Item 16D. |  | Exemptions from the Listing Standards for Audit Committees                   |  |  | 122 | 
|Item 16E. |  | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |  |  | 122 | 
|Item 16F. |  | Change in Registrants Certifying Accountant                                 |  |  | 122 | 
|Item 16G. |  | Corporate Governance                                                         |  |  | 122 | 
|Item 16H. |  | Mine Safety Disclosure                                                       |  |  | 123 | 
|          |  |                                                                             
|PART III  |  |                                                                              |  |  |     | 
|Item 17.  |  | Financial Statements                                                         |  |  | 124 | 
|Item 18.  |  | Financial Statement                                                          |  |  | 124 | 
|Item 19.  |  | Exhibits                                                                     |  |  | 124 | 



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INTRODUCTION

Unless otherwise indicated, Celyad, the company, our company, we, us and our refer to
Celyad S.A. and its consolidated subsidiaries.

We own various trademark registrations and applications, and unregistered trademarks and service marks,
including CELYAD, C-CATH, C-CURE, -CATH, C-CATHez, CARDIO 3
BIOSCIENCES and our corporate logo. All other trademarks or trade names referred to in this Annual Report on Form 20-F are the property of their respective owners. Trade names, trademarks and service
marks of other companies appearing in this Annual Report on Form 20-F are the property of their respective holders. Solely for convenience, the trademarks and trade names in this Annual Report on Form 20-F may be referred to without the ® and  symbols, but such references should not be construed as any indicator that their respective owners will not
assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by
the International Accounting Standards Board, or IASB. Our consolidated financial statements are presented in euros. All references in this Annual Report on Form 20-F to $, US$,
U.S.$, U.S. dollars, dollars and USD mean U.S. dollars and all references to , EUR, and euros mean euros, unless otherwise noted. Throughout this Annual Report
on Form 20-F, references to ADSs mean ADSs or ordinary shares represented by ADSs, as the case may be.



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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F, or Annual Report, contains forward-looking statements. All statements other than
present and historical facts and conditions contained in this Annual Report, including statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are
forward-looking statements. When used in this Annual Report, the words anticipate, believe, can, could, estimate, expect, intend, is designed to,
may, might, plan, potential, predict, objective, should, or the negative of these and similar expressions identify forward-looking statements. Forward-looking
statements include, but are not limited to, statements about:



| |  | the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development programs;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to advance drug product candidates into, and successfully commence and complete, clinical trials;
|- |  | -------------------------------------------------------------------------------------------------------------



| |  | our reliance on the success of our drug product candidates;
|- |  | -----------------------------------------------------------



| |  | the timing or likelihood of regulatory filings and approvals;
|- |  | -------------------------------------------------------------



| |  | our ability to develop sales and marketing capabilities;
|- |  | --------------------------------------------------------



| |  | the commercialization of our drug product candidates, if approved;
|- |  | ------------------------------------------------------------------



| |  | the pricing and reimbursement of our drug product candidates, if approved;
|- |  | --------------------------------------------------------------------------



| |  | the implementation of our business model, strategic plans for our business, drug product candidates and technology;
|- |  | -------------------------------------------------------------------------------------------------------------------



| |  | the scope of protection we are able to establish and maintain for intellectual property rights covering our drug product candidates and technology;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  | cost associated with defending intellectual property infringement, product liability and other claims;
|- |  | ------------------------------------------------------------------------------------------------------



| |  | regulatory developments in the United States, the European Union and other jurisdictions where we plan to market our drug product candidates;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | estimates of our expenses, future revenues, capital requirements and our needs for additional financing and ability to obtain such financing when needed;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;
|- |  | ------------------------------------------------------------------------------------------------------------------



| |  | our ability to maintain and establish collaborations or obtain additional grant funding or subsidies;
|- |  | -----------------------------------------------------------------------------------------------------



| |  | the rate and degree of market acceptance of our drug product candidates;
|- |  | ------------------------------------------------------------------------



| |  | developments relating to our competitors and our industry, including competing therapies;
|- |  | -----------------------------------------------------------------------------------------



| |  | our ability to effectively manage our anticipated growth;
|- |  | ---------------------------------------------------------



| |  | our ability to attract and retain qualified employees and key personnel;
|- |  | ------------------------------------------------------------------------



| |  | our ability to build our finance infrastructure, improve our accounting systems and controls and remedy the material weaknesses identified in our internal control over financial reporting;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act;
|- |  | ---------------------------------------------------------------------------------------------------------------



| |  | statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and share performance;
|- |  | ------------------------------------------------------------------------------------------------------------------------------



| |  | our expectations regarding our PFIC status;
|- |  | -------------------------------------------



| |  | the future trading price of our ADSs and our ordinary shares and impact of securities analysts reports on these prices; and
|- |  | ----------------------------------------------------------------------------------------------------------------------------



| |  | other risks and uncertainties, including those listed under the caption Risk factors.
|- |  | ---------------------------------------------------------------------------------------



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You should refer to the section of this Annual Report titled Risk factors (ITEM 3, D) for a
discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this
Annual Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard
these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as
a result of new information, future events or otherwise, except as required by law.

You should read this Annual Report and the documents that we
reference in this Annual Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This Annual Report contains market data and industry forecasts that were obtained from industry publications. These data involve a number of assumptions and
limitations, and you are cautioned not to give undue weight to such estimates. While we believe the market position, market opportunity and market size information included in this Annual Report is generally reliable, such information is inherently
imprecise.



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|ITEM 1. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEE
|------- | -----------------------------------------

Not applicable.

ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. - KEY
INFORMATION

A Selected Financial Data

Statement of Income (Loss) Data:



|                                                                   |  |                                |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|------------------------------------------------------------------ |  | ------------------------------ | --------- | - | ---- |  | --------- | ---- |  |  | --------- | - |  |  | --------- | -
|(000)                                                            |  | For the year ended
December 31 |           |   |      | 
|                                                                   |  | 2016                           |           |   | 2015 |  |           | 2014 |  |  | 2013      |  
|Revenues                                                           |  |                                | 8,523     |   |      |  | 3         |      |  |  | 146       |   |  |  | 0         |  
|Cost of sales                                                      |  |                                | (53       | ) |      |  | (1        | )    |  |  | (115      | ) |  |  | 0         |  
|Gross profit                                                       |  |                                | 8,471     |   |      |  | 2         |      |  |  | 31        |   |  |  | 0         |  
|Research and Development expenses                                  |  |                                | (27,675   | ) |      |  | (22,766   | )    |  |  | (15,865   | ) |  |  | (9,046    | )
|General administrative expenses                                    |  |                                | (9,744    | ) |      |  | (7,230    | )    |  |  | (5,016    | ) |  |  | (3,972    | )
|Other operating income                                             |  |                                | 3,340     |   |      |  | 322       |      |  |  | 4,413     |   |  |  | 64        |  
|Operating Loss                                                     |  |                                | (25,609   | ) |      |  | (29,672   | )    |  |  | (16,437   | ) |  |  | (12,954   | )
|Financial Result                                                   |  |                                | 1,997     |   |      |  | 306       |      |  |  | 236       |   |  |  | (1,535    | )
|Share of Loss of investments accounted for using the equity method |  |                                |          |   |      |  | 252       |      |  |  | (252      | ) |  |  | 0         |  
|Loss before taxes                                                  |  |                                | (23,612   | ) |      |  | (29,114   | )    |  |  | (16,453   | ) |  |  | (14,489   | )
|Income taxes                                                       |  |                                | 6         |   |      |  |          |      |  |  |          |   |  |  |          |  
|Loss for the year [2]                                              |  |                                | (23,606   | ) |      |  | (29,114   | )    |  |  | (16,453   | ) |  |  | (14,489   | )
|                                                                   |  |                                |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Basic and diluted loss per share (in )                            |  |                                | (2.53     | ) |      |  | (3.43     | )    |  |  | (2.44     | ) |  |  | (3.53     | )
|                                                                   |  |                                |           |   |      |  |           |      |  |  |           |   |  |  |           |  
|Weighted average number of outstanding shares                      |  |                                | 9,313,603 |   |      |  | 8,481,583 |      |  |  | 6,750,383 |   |  |  | 4,099,216 |  
|                                                                   |  |                                |           |   |      |  |           |      |  |  |           |   |  |  |           |  

Statement of Financial Position Data:



|                                           |  |      |        |  |      |  |        |      |  |  |         |  |  |       |         |  |  |  |         | 
|------------------------------------------ |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------- |  |  | ----- | ------- |  |  |  | ------- | 
|                                           |  | 2013 |        |  | 2014 |  |        | 2015 |  |  | 2016    |  |  |       |        
|                                           |  | Euro |        |  | Euro |  |        | Euro |  |  | Euro    |  |  | US(1) |        
|Cash and cash equivalents                  |  |      | 19,058 |  |      |  | 27,633 |      |  |  | 100,175 |  |  |       | 48,357  |  |  |  | 50,973  | 
|Short term deposits                        |  |      | 3,000  |  |      |  | 2,671  |      |  |  | 7,338   |  |  |       | 34,230  |  |  |  | 36,082  | 
|Total assets                               |  |      | 32,386 |  |      |  | 43,976 |      |  |  | 159,525 |  |  |       | 138,806 |  |  |  | 146,316 | 
|Total shareholders equity                 |  |      | 16,898 |  |      |  | 26,684 |      |  |  | 111,473 |  |  |       | 90,885  |  |  |  | 95,801  | 
|Trade non-current liabilities              |  |      | 12,099 |  |      |  | 11,239 |      |  |  | 36,562  |  |  |       | 36,646  |  |  |  | 38,629  | 
|Total current liabilities                  |  |      | 3,389  |  |      |  | 6,053  |      |  |  | 11,490  |  |  |       | 11,275  |  |  |  | 11,885  | 
|Total liabilities                          |  |      | 15,488 |  |      |  | 17,292 |      |  |  | 48,052  |  |  |       | 47,922  |  |  |  | 50,514  | 
|Total liabilities and shareholders equity |  |      | 32,386 |  |      |  | 43,976 |      |  |  | 159,525 |  |  |       | 138,806 |  |  |  | 146,316 | 
|                                           |  |      |        |  |      |  |        |      |  |  |         |  |  |       |         |  |  |  |         | 



|(1) | At closing rate of 1.0541 $/ on December 31, 2016
|--- | --------------------------------------------------



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Exchange Rate Information

The following table sets forth, for each period indicated, the low and high exchange rates for euros expressed in U.S. dollars, the exchange rate at the end of
such period and the average of such exchange rates on the last day of each month during such period, based on the noon buying rate of the Federal Reserve Bank of New York for the euro. As used in this document, the term noon buying rate
refers to the rate of exchange for the euro, expressed in U.S. dollars per euro, as certified by the Federal Reserve Bank of New York for customs purposes. The exchange rates set forth below demonstrate trends in exchange rates, but the actual
exchange rates used throughout this Annual Report may vary.



|                        |  |      |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|----------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                        |  | 2012 |        |  | 2013 |  |        | 2014 |  |  | 2015   |  |  | 2016 |       
|High                    |  |      | 1.3463 |  |      |  | 1.3816 |      |  |  | 1.3927 |  |  |      | 1.2015 |  |  |  | 1.1569 | 
|Low                     |  |      | 1.2062 |  |      |  | 1.2774 |      |  |  | 1.2101 |  |  |      | 1.0524 |  |  |  | 1.0364 | 
|Rate at end of period   |  |      | 1.3186 |  |      |  | 1.3779 |      |  |  | 1.2101 |  |  |      | 1.0927 |  |  |  | 1.0541 | 
|Average rate per period |  |      | 1.2859 |  |      |  | 1.3281 |      |  |  | 1.3297 |  |  |      | 1.1104 |  |  |  | 1.1069 | 

The following table sets forth, for each of the last six months, the low and high exchange rates for euros expressed in U.S.
dollars and the exchange rate at the end of the month based on the noon buying rate as described above.



|                      |  |               |        |  |             |  |        |              |  |  |              |  |  |             |        |  |              |  |        |  |  |  |        | 
|--------------------- |  | ------------- | ------ |  | ----------- |  | ------ | ------------ |  |  | ------------ |  |  | ----------- | ------ |  | ------------ |  | ------ |  |  |  | ------ | 
|                      |  | September2016 |        |  | October2016 |  |        | November2016 |  |  | December2016 |  |  | January2017 |        |  | February2017 | 
|High                  |  |               | 1.1296 |  |             |  | 1.1236 |              |  |  | 1.1095       |  |  |             | 1.0762 |  |              |  | 1.0755 |  |  |  | 1.0808 | 
|Low                   |  |               | 1.1146 |  |             |  | 1.0872 |              |  |  | 1.0548       |  |  |             | 1.0364 |  |              |  | 1.0385 |  |  |  | 1.0513 | 
|Rate at end of period |  |               | 1.1212 |  |             |  | 1.1026 |              |  |  | 1.0799       |  |  |             | 1.0543 |  |              |  | 1.0614 |  |  |  | 1.0643 | 

On February 28th, 2017, the noon buying rate of the Federal Reserve Bank of New York for the euro was 1.00 = 1.0643$

B - Capitalization and Indebtedness

Not applicable.

C. - Reasons for
the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Our business faces significant risks. You should carefully consider all of the information set forth in this Annual Report and
in our other filings with the United States Securities and Exchange Commission, or the SEC, including the following risk factors which we face and which are faced by our industry. Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as
a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See Special Note Regarding Forward-Looking Statements above.



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Risks Related to Our Financial Position and Need for Additional Capital

We have incurred losses in each period since our inception and anticipate that we will continue to incur losses for the foreseeable future.

We are not profitable and have incurred losses in each period since our inception. For the years ended December 31, 2016, 2015 and 2014, we incurred a
loss for the year of 23.6 million, 29,1 million and 16.5 million, respectively. As of December 31, 2016, we had a retained loss of 124.0 million. We expect these losses to increase as we continue to
incur significant research and development and other expenses related to our ongoing operations, continue to advance our drug product candidates through preclinical studies and clinical trials, seek regulatory approvals for our drug product
candidates, scale-up manufacturing capabilities and hire additional personnel to support the development of our drug product candidates and to enhance our operational, financial and information management
systems.

Even if we succeed in commercializing one or more of our drug product candidates, we will continue to incur losses for the foreseeable future
relating to our substantial research and development expenditures to develop our technologies. We anticipate that our expenses will increase substantially if and as we:



| |  |  | continue our research, preclinical and clinical development of our drug product candidates;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | expand the scope of therapeutic indications of our current clinical trials for our drug product candidates;
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| |  |  | initiate additional preclinical studies or additional clinical trials of existing drug product candidates or new drug product candidates;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | further develop the manufacturing processes for our drug product candidates;
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| |  |  | seek regulatory approvals for our drug product candidates that successfully complete clinical trials;
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| |  |  | establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval, in the European Union and the United States;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | make milestone or other payments under any in-license agreements;
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| |  |  | maintain, protect and expand our intellectual property portfolio; and
| | - |  | ---------------------------------------------------------------------



| |  |  | create additional infrastructure to support our operations as a U.S. public company.
| | - |  | ------------------------------------------------------------------------------------

We may encounter
unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future losses will depend, in part, on the rate of future growth of our expenses and our ability to generate
revenue.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our shareholders equity and working
capital. Further, the losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period to period comparison of our results of operations may not be a good indication of our future performance.

We have generated only limited revenue from sales of
C-Cathez to date, and do not expect to generate material revenue until we receive regulatory approval for one of our drug product candidates.

We have generated only limited revenue from sales of C-Cathez, our proprietary catheter for injecting cells into the heart, to research laboratories and clinical stage companies. We expect that revenue from sales of
C-Cathezwill remain insignificant as we sell C-Cathez
only to research laboratories and clinical stage companies. We have no drug products approved for commercial sale, have not generated any revenue from drug product sales, and do not anticipate generating any revenue from drug product sales until
after we have received regulatory approval, if at all, for the commercial sale of a drug product candidate. Our ability to generate revenue and achieve profitability depends significantly on our success in many factors, including:



| |  |  | completing research regarding, and preclinical and clinical development of, our drug product candidates;
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| |  |  | pursuing regulatory approvals and marketing authorizations for drug product candidates for which we complete clinical trials;
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| |  |  | developing a sustainable and scalable commercial-scale manufacturing process for our drug product candidates, including establishing our own manufacturing capabilities and infrastructure or establishing and maintaining
commercially viable supply relationships with third parties;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | launching and commercializing drug product candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | obtaining market acceptance of our drug product candidates as viable treatment options;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | addressing any competing technological and market developments;
| | - |  | ---------------------------------------------------------------



| |  |  | identifying, assessing, acquiring and/or developing new drug product candidates;
| | - |  | --------------------------------------------------------------------------------



| |  |  | negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;
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| |  |  | maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | attracting, hiring, and retaining qualified personnel.
| | - |  | ------------------------------------------------------

Even if one or more of the drug product candidates
that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved drug product candidate. Our expenses could increase beyond expectations if we are required by the U.S. Food and
Drug Administration, or the FDA, European Medicines Agency, or EMA, or other applicable regulatory agencies, to change our manufacturing processes or assays, or to perform clinical, preclinical, or other types of studies in addition to those that we
currently anticipate. If we are successful in obtaining regulatory approvals to market one or more of our drug product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory
approval, the accepted price for the drug product, the ability to get coverage and adequate reimbursement, and whether we own the commercial rights for that territory. If the number of our addressable disease patients is not as significant as we
estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue
from sales of such products, even if approved. If we are not able to generate revenue from the sale of any approved drug products, we may never become profitable.

If we fail to obtain additional financing, we will be unable to complete the development and commercialization of our drug product candidates.

Our operations have required substantial amounts of cash since inception. We expect to continue to spend substantial amounts to continue the
clinical development of our drug product candidates, including our ongoing and planned clinical trials for CART-T NKR-2 and any of our future drug product candidates. If
approved, we will require significant additional amounts in order to launch and commercialize our drug product candidates.

As of December 31, 2016,
we had 48.4 million in cash and 34.2 million in short term investments.

We believe that our existing cash and short term
investments, will be sufficient to fund our operations until mid 2019. However, changing circumstances may cause us to increase our spending significantly faster than we currently anticipate, and we may need to spend more money than currently
expected because of circumstances beyond our control. We may require additional capital for the further development and commercialization of our drug product candidates and may need to raise additional funds sooner if we choose to expand more
rapidly than we presently anticipate.

We cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed
source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our drug product
candidates or other research and development initiatives. Our licenses may also be terminated if we are unable to meet the payment obligations under the agreements. We could be required to seek collaborators for our drug product candidates at an
earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our drug product candidates in markets where we otherwise would seek to
pursue development or commercialization ourselves. Any these events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our American Depositary Shares, or ADSs, or ordinary shares to
decline.



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Raising additional capital may cause dilution to our existing shareholders, restrict our operations or
require us to relinquish rights to our drug product candidates or technologies.

We may seek additional funding through a combination of equity
offerings, debt financings, collaborations and/or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include
liquidation or other preferences that adversely affect your rights as a holder of the ADSs or the ordinary shares. The incurrence of indebtedness and/or the issuance of certain equity securities could result in increased fixed payment obligations
and could also result in certain additional restrictive covenants, such as limitations on our ability to incur additional debt and/or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other
operating restrictions that could adversely impact our ability to conduct our business. In addition, issuance of additional equity securities, or the possibility of such issuance, may cause the market price of the ADSs or the ordinary shares to
decline. In the event that we enter into collaborations and/or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to
technologies or drug product candidates that we otherwise would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve more favorable terms.

Risks Related to Product Development, Regulatory Approval and Commercialization

We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory
authorities.

Before obtaining regulatory approval or marketing authorization from regulatory authorities for the sale of our drug product
candidates, if at all, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the drug product candidates in humans. Clinical testing is expensive, time-consuming and uncertain as to outcome. We cannot guarantee that any
clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:



| |  |  | delays in raising, or inability to raise, sufficient capital to fund the planned clinical trials;
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| |  |  | delays in reaching a consensus with regulatory agencies on trial design;
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| |  |  | identifying, recruiting and training suitable clinical investigators;
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| |  |  | delays in reaching agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites;
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| |  |  | delays in obtaining required Investigational Review Board, or IRB, or ethics committee approval at each clinical trial site;
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| |  |  | delays in recruiting suitable patients to participate in our clinical trials;
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| |  |  | delays due to changing standard of care for the diseases we are studying;
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| |  |  | adding new clinical trial sites;
| | - |  | --------------------------------



| |  |  | imposition of a clinical hold by regulatory agencies, including after an inspection of our clinical trial operations or trial sites or for the class of drugs in which our drug product candidates belong;
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| |  |  | failure by our CROs, other third parties or us to adhere to clinical trial requirements;
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| |  |  | catastrophic loss of drug product candidates due to shipping delays or delays in customs in connection with delivery to foreign countries for use in clinical trials;
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| |  |  | failure to perform in accordance with the FDAs good clinical practices, or GCPs, or applicable regulatory requirements and guidelines in other countries;
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| |  |  | delays in the testing, validation, manufacturing and delivery of our drug product candidates to the clinical sites;
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| |  |  | delays in having patients complete participation in a trial or return for post-treatment follow-up;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | clinical trial sites or patients dropping out of a trial;
| | - |  | ---------------------------------------------------------



| |  |  | occurrence of serious adverse events associated with the drug product candidate that are viewed to outweigh its potential benefits; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.
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Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenues
from product sales, regulatory and commercialization milestones and royalties. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our drug product candidates or allow our competitors to
bring products to market before we do, which could impair our ability to successfully commercialize our drug product candidates and may harm our business and results of operations.

If the results of our clinical trials are inconclusive or if there are safety concerns or adverse events associated with our drug product candidates, we may:



| |  |  | be delayed in obtaining marketing approval for our drug product candidates, if at all;
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| |  |  | obtain approval for indications or patient populations that are not as broad as intended or desired;
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| |  |  | obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
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| |  |  | be subject to changes in the way the product is administered;
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| |  |  | be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;
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| |  |  | have regulatory authorities withdraw their approval of the product or impose restrictions on its distribution in the form of a risk evaluation and mitigations strategy, or REMS, plan;
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| |  |  | be subject to the addition of labeling statements, such as warnings or contraindications;
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| |  |  | be sued; or
| | - |  | -----------



| |  |  | experience damage to our reputation.
| | - |  | ------------------------------------

Our drug product candidates could potentially cause other adverse events
that have not yet been predicted. As described above, any of these events could prevent us from achieving or maintaining market acceptance of our drug product candidates and impair our ability to commercialize our products if they are ultimately
approved by applicable regulatory authorities.

Our drug product candidates may cause undesirable side effects or have other properties that could
halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

As with most biological drug products, use of our drug product candidates could be associated with side effects or adverse events which can vary in severity
from minor reactions to death and in frequency from infrequent to prevalent. Undesirable side effects or unacceptable toxicities caused by our drug product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical
trials. The FDA, EMA, or comparable foreign regulatory authorities could delay or deny approval of our drug product candidates for any or all targeted indications and negative side effects could result in a more restrictive label for any product
that is approved. Side effects such as toxicity or other safety issues associated with the use of our drug product candidates could also require us or our collaborators to perform additional studies or halt development or sale of these drug product
candidates.

Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial, or could
result in potential product liability claims. In addition, these side effects may not be appropriately or timely recognized or managed by the treating medical staff. Any of these occurrences may materially and adversely harm our business, financial
condition and prospects.



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Additionally, if one or more of our drug product candidates receives marketing approval, and we or others later
identify undesirable side effects caused by such products, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our products, a number of
potentially significant negative consequences could result, including:



| |  |  | regulatory authorities may withdraw approvals of such product;
| | - |  | --------------------------------------------------------------



| |  |  | regulatory authorities may require additional warnings on the label;
| | - |  | --------------------------------------------------------------------



| |  |  | we may be required to create a REMS plan which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, and/or other elements
to assure safe use;
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| |  |  | we could be sued and held liable for harm caused to patients; and
| | - |  | -----------------------------------------------------------------



| |  |  | our reputation may suffer.
| | - |  | --------------------------

Any of the foregoing could prevent us from achieving or maintaining market
acceptance of the particular drug product candidate, if approved, and could significantly harm our business, results of operations, and prospects.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely
affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a
sufficient number of patients who remain in the trial until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons, including:



| |  |  | the size and nature of the patient population;
| | - |  | ----------------------------------------------



| |  |  | the patient eligibility criteria defined in the protocol;
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| |  |  | the size of the population required for analysis of the trials primary endpoints;
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| |  |  | the proximity of patients to trial sites;
| | - |  | -----------------------------------------



| |  |  | the design of the trial;
| | - |  | ------------------------



| |  |  | our ability to recruit clinical trial investigators with the appropriate competencies and experience;
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| |  |  | competing clinical trials for similar therapies;
| | - |  | ------------------------------------------------



| |  |  | clinicians and patients perceptions as to the potential advantages and side effects of the drug product candidate being studied in relation to other available therapies, including any new drugs or treatments
that may be approved for the indications we are investigating;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to obtain and maintain patient consents; and
| | - |  | --------------------------------------------------------



| |  |  | the risk that patients enrolled in clinical trials will not complete a clinical trial.
| | - |  | --------------------------------------------------------------------------------------

In addition, our
clinical trials will compete with other clinical trials for drug product candidates that are in the same therapeutic areas as our drug product candidates, and this competition will reduce the number and types of patients available to us, because
some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Because the number of qualified clinical investigators is limited, we expect to conduct some of our clinical
trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. Moreover, because our drug product candidates represent a
departure from more commonly used methods for ischemic heart failure, or HF and cancer treatment, potential patients and their doctors may be inclined to use conventional therapies, rather than enroll patients in our clinical trials.

Even if we are able to enroll a sufficient number of patients in our clinical trials, delays in patient enrollment may result in increased costs or may affect
the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our drug product candidates.



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Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier
studies and trials as well as data from any interim analysis of ongoing clinical trials may not be predictive of future trial results. Clinical failure can occur at any stage of clinical development.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical
trial process. Although drug product candidates may demonstrate promising results in early clinical (human) trials and preclinical (animal) studies, they may not prove to be effective in subsequent clinical trials. For example, testing on animals
may occur under different conditions than testing in humans and therefore the results of animal studies may not accurately predict human experience. Likewise, early clinical trials may not be predictive of eventual safety or effectiveness results in
larger-scale pivotal clinical trials. The results of preclinical studies and previous clinical trials as well as data from any interim analysis of ongoing clinical trials of our drug product candidates, as well as studies and trials of other
products with similar mechanisms of action to our drug product candidates, may not be predictive of the results of ongoing or future clinical trials. Drug product candidates in later stages of clinical trials may fail to show the desired safety and
efficacy traits despite having progressed through preclinical studies and earlier clinical trials. In addition to the safety and efficacy traits of any drug product candidate, clinical trial failures may result from a multitude of factors including
flaws in trial design, dose selection, placebo effect and patient enrollment criteria. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety
profiles, notwithstanding promising results in earlier trials, and it is possible that we will as well. Based upon negative or inconclusive results, we or our collaborators may decide, or regulators may require us, to conduct additional clinical
trials or preclinical studies. In addition, data obtained from trials and studies are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval.

The regulatory approval processes of the FDA, EMA and other comparable regulatory authorities is lengthy, time-consuming, and inherently
unpredictable, and we may experience significant delays in the clinical development and regulatory approval, if any, of our drug product candidates.

The research, testing, manufacturing, labeling, approval, selling, import, export, marketing, and distribution of drug products, including biologics, are
subject to extensive regulation by the FDA, EMA and other comparable regulatory authorities. We are not permitted to market any biological product in the United States until we receive a Biologics License Application, or BLA, from the FDA or a
marketing authorization application, or MAA, from the EMA. We have not previously submitted a BLA to the FDA, MAA to the EMA, or similar approval filings to comparable foreign authorities. A BLA must include extensive preclinical and clinical data
and supporting information to establish that the drug product candidate is safe, pure, and potent for each desired indication. The BLA must also include significant information regarding the chemistry, manufacturing, and controls for the product,
and the manufacturing facilities must complete a successful pre-license inspection. We expect the nature of our biologic product candidates to create further challenges in obtaining regulatory approval. For
example, the FDA and EMA have limited experience with commercial development of genetically modified T-cell therapies for cancer. The FDA may also require a panel of experts, referred to as an Advisory
Committee, to deliberate on the adequacy of the safety and efficacy data to support licensure. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain licensure of the drug product
candidates based on the completed clinical trials. Accordingly, the regulatory approval pathway for our drug product candidates may be uncertain, complex, expensive, and lengthy, and approval may not be obtained.

Obtaining and maintaining regulatory approval of our drug product candidates in one jurisdiction does not mean that we will be successful in obtaining
regulatory approval of our drug product candidates in other jurisdictions.

If we obtain and maintain regulatory approval of our drug product
candidates in one jurisdiction, such approval does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a
negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a drug product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing,
marketing and promotion of the drug product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional
preclinical studies or clinical trials as



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clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a drug product candidate must
be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us
and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or to receive applicable marketing approvals, our target market will be reduced and
our ability to realize the full market potential of our drug product candidates will be harmed.

A Breakthrough Therapy Designation by the FDA for
our drug product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our drug product candidates will receive marketing approval.

We may seek a Breakthrough Therapy Designation for some of our drug product candidates. A breakthrough therapy is defined as a product that is intended, alone
or in combination with one or more other products, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or
more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For drug product candidates that have been designated as breakthrough therapies, interaction and communication between the FDA and
the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Drug product candidates designated as breakthrough therapies by the FDA
are also eligible for accelerated approval.

Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe
one of our drug product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy Designation for a drug
product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more of
our drug product candidates qualify as breakthrough therapies, the FDA may later decide that the drug product candidates no longer meet the conditions for qualification.

A Fast Track Designation by the FDA may not actually lead to a faster development or regulatory review or approval process.

We may seek Fast Track Designation for some of our drug product candidates. If a product is intended for the treatment of a serious or life-threatening
condition and the product demonstrates the potential to address unmet medical needs for this condition, the product sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we
believe a particular drug product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive Fast Track Designation, we may not experience a faster development process, review or
approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

We may seek Orphan Drug Designation for some of our drug product candidates, and we may be unsuccessful or may be unable to maintain the benefits
associated with Orphan Drug Designation, including the potential for market exclusivity.

As part of our business strategy, we may seek Orphan
Drug Designation for some of our drug product candidates, and we may be unsuccessful. Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate products for relatively small patient populations
as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a product intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals
annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the product will be recovered from sales in the United States. In the United
States, Orphan Drug Designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.



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Similarly, in the European Union, after recommendation from the EMAs Committee for Orphan Medicinal
Products, the European Commission grants Orphan Drug Designation to promote the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions affecting not more than
five in 10,000 persons in the European Union and for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or the product would be a significant benefit to those affected). Additionally, designation is granted for
products intended for the diagnosis, prevention, or treatment of a life-threatening, seriously debilitating or serious and chronic condition and when, without incentives, it is unlikely that sales of the product in the European Union would be
sufficient to justify the necessary investment in developing the product. In the European Union, Orphan Drug Designation entitles a party to financial incentives such as reduction of fees or fee waivers.

Generally, if a drug product candidate with an Orphan Drug Designation subsequently receives the first marketing approval for the indication for which it has
such designation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same product and indication for that time period, except in limited
circumstances. The applicable period is seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a product no longer meets the criteria for Orphan Drug Designation or if the drug is
sufficiently profitable so that market exclusivity is no longer justified.

Even if we obtain orphan drug exclusivity for a product, that exclusivity may
not effectively protect the product from competition because different products can be approved for the same condition or the same products can be approved for different conditions. If one of our drug product candidates that receives an orphan drug
designation is approved for a particular indication or use within the rare disease, the FDA may later approve the same product for additional indications or uses within that rare disease that are not protected by our exclusive approval. Even after
an orphan drug is approved, the FDA can subsequently approve the same product for the same condition if the FDA concludes that the later product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to
patient care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Moreover, orphan drug exclusive marketing rights in
the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of patients with the rare disease or
condition or if another product with the same active moiety is determined to be safer, more effective, or represents a major contribution to patient care. Orphan Drug Designation neither shortens the development time or regulatory review time of a
product nor gives the product any advantage in the regulatory review or approval process. While we intend to seek Orphan Drug Designation for some of our drug product candidates, we may never receive such designations. Even if we do receive such
designations, there is no guarantee that we will enjoy the benefits of those designations.

Even if we receive regulatory approval of our drug
product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or
experience unanticipated problems with our drug product candidates.

If our drug product candidates are approved, they will be subject to ongoing
regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both
federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.

Manufacturers and manufacturers
facilities are required to comply with extensive FDA, and comparable foreign regulatory authority, requirements, including ensuring that quality control and manufacturing procedures conform to current Good Manufacturing Practices, or cGMP, and in
certain cases Good Tissue Practices, or cGTP, regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance, to the extent applicable, with cGMP and adherence to commitments made in
any BLA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing,
production, and quality control.

Any regulatory approvals that we receive for our drug product candidates may be subject to limitations on the approved
indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of
the drug product candidate. The FDA may also require a



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REMS program as a condition of approval of our drug product candidates, which could entail requirements for long-term patient follow-up, a medication
guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or a comparable foreign regulatory authority
approves our drug product candidates, we will have to comply with requirements including submissions of safety and other post-marketing information and reports, establishment registration, as well as continued compliance with cGMPs and cGCPs for any
clinical trials that we conduct post-approval.

The FDA may impose consent decrees or withdraw approval if compliance with regulatory requirements and
standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our drug product candidates, including adverse events of unanticipated severity or frequency, or with our
third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess
new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:



| |  |  | restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market, or voluntary or mandatory product recalls;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | fines, untitled or warning letters, or holds on clinical trials;
| | - |  | ----------------------------------------------------------------



| |  |  | refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | product seizure or detention, or refusal to permit the import or export of our drug product candidates; and
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | injunctions or the imposition of civil or criminal penalties.
| | - |  | -------------------------------------------------------------

The FDA strictly regulates marketing, labeling,
advertising, and promotion of products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the approved label. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. The policies
of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our drug product candidates. We cannot predict the likelihood, nature or extent
of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies,
or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

We will need to obtain FDA approval of any proposed product trade names, and any failure or delay associated with such approval may adversely impact our
business.

Any trade name we intend to use for our drug product candidates will require approval from the FDA, regardless of whether we have
secured a formal trademark registration from the United States Patent and Trademark Office, or USPTO. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names and/or
medication or prescribing errors. The FDA may also object to any product name we submit if it believes the name inappropriately implies medical claims. If the FDA objects to any of our proposed product names, we may be required to adopt an
alternative name for our drug product candidates. If we adopt an alternative name, we would lose the benefit of our existing trademark applications for such drug product candidate, and may be required to expend significant additional resources in an
effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. We may be unable to build a successful brand identity for a new trademark
in a timely manner or at all, which would limit our ability to commercialize our drug product candidates.



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Even if we obtain regulatory approval of our drug product candidates, the products may not gain market
acceptance among physicians, patients, hospitals and others in the medical community.

Our autologous engineered-cell therapies may not become
broadly accepted by physicians, patients, hospitals, and others in the medical community. Numerous factors will influence whether our drug product candidates are accepted in the market, including:



| |  |  | the clinical indications for which our drug product candidates are approved;
| | - |  | ----------------------------------------------------------------------------



| |  |  | physicians, hospitals, and patients considering our drug product candidates as a safe and effective treatment;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the potential and perceived advantages of our drug product candidates over alternative treatments;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | the prevalence and severity of any side effects;
| | - |  | ------------------------------------------------



| |  |  | product labeling or product insert requirements of the FDA, EMA, or other regulatory authorities;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | limitations or warnings contained in the labeling approved by the FDA or EMA;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the timing of market introduction of our drug product candidates as well as competitive products;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | the cost of treatment in relation to alternative treatments;
| | - |  | ------------------------------------------------------------



| |  |  | the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | the willingness of patients to pay out-of-pocket in the absence of coverage by third-party payors and government authorities;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | the effectiveness of our sales and marketing efforts.
| | - |  | -----------------------------------------------------

In addition, although we are not utilizing embryonic
stem cells in our drug product candidates, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure
of such trials to demonstrate that these therapies are safe and effective may limit market acceptance of our drug product candidates due to the perceived similarity between our drug product candidates and these other therapies. If our drug product
candidates are approved but fail to achieve market acceptance among physicians, patients, hospitals, or others in the medical community, we will not be able to generate significant revenue.

Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced
that are more favorably received than our products, are more cost effective or render our products obsolete.

Coverage and reimbursement may be
limited or unavailable in certain market segments for our drug product candidates, which could make it difficult for us to sell our drug product candidates profitably.

Successful sales of our drug product candidates, if approved, depend on the availability of adequate coverage and reimbursement from third-party payors. In
addition, because our drug product candidates represent novel approaches to the treatment of ischemic HF and cancer, we cannot accurately estimate the potential revenue from our drug product candidates. Patients who are provided medical treatment
for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial
payors are critical to new product acceptance.

Government authorities and third-party payors, such as private health insurers and health maintenance
organizations, decide which drugs and treatments they will cover and the amount of reimbursement. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payors determination that use of
a product is:



| |  |  | a covered benefit under its health plan;
| | - |  | ----------------------------------------



| |  |  | safe, effective and medically necessary;
| | - |  | ----------------------------------------



| |  |  | appropriate for the specific patient;
| | - |  | -------------------------------------



| |  |  | cost-effective; and
| | - |  | -------------------



| |  |  | neither experimental nor investigational.
| | - |  | -----------------------------------------



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In the United States, no uniform policy of coverage and reimbursement for products exists among third-party
payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and
cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. Even if we
obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high.
Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of our products. Patients are unlikely to use our drug product
candidates unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our drug product candidates. Because our drug product candidates have a higher cost of goods than conventional therapies, and may
require long-term follow up evaluations, the risk that coverage and reimbursement rates may be inadequate for us to achieve profitability may be greater.

We intend to seek approval to market our drug product candidates in the United States, European Union, and in selected other foreign jurisdictions. If we
obtain approval in one or more foreign jurisdictions for our drug product candidates, we will be subject to rules and regulations in those jurisdictions. For example, in the countries of the European Union, the pricing of biologics is subject to
governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after obtaining marketing approval of a drug product candidate. In addition, market acceptance and sales of our drug product
candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for our drug product candidates and may be affected by existing and future health care reform measures.

Healthcare legislative reform measures and constraints on national budget social security systems may have a material adverse effect on our business and
results of operations.

Third-party payors, whether domestic or foreign, or governmental or private, are developing increasingly sophisticated
methods of controlling healthcare costs. In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products
profitably. In particular, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or the ACA, was enacted, which, among other things, subjected biologic products to potential
competition by lower-cost biosimilars, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the
minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, subjected
manufacturers to new annual fees and taxes for certain branded prescription drugs, and provided incentives to programs that increase the federal governments comparative effectiveness research. Some of the provisions of the Affordable Care Act
have yet to be fully implemented, while certain provisions have been subject to judicial and Congressional challenges. In January 2017, Congress voted to adopt a budget resolution for fiscal year 2017, that while not a law, is widely viewed as the
first step toward the passage of legislation that would repeal certain aspects of the Affordable Care Act. Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities
under the Affordable Care Act to waive, defer, grant exemptions from, or delay the implementation of any provision of the Affordable Care Act that would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on
individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Congress also could consider subsequent legislation to replace elements of the Affordable Care Act that are repealed. Thus, the full impact
of the Affordable Care Act, any law replacing elements of it, and the political uncertainty surrounding any repeal or replacement legislation on our business remains unclear.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. In August 2011, the Budget Control Act
of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was
unable to reach required goals, thereby triggering the legislations automatic reduction to several government programs. This includes aggregate reductions of Medicare payments to providers of 2% per fiscal year, which went into effect in
April 2013, and will remain in effect through 2025 unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act of 2012, was signed into



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law, which, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the
government to recover overpayments to providers from three to five years.

There have been, and likely will continue to be, legislative and regulatory
proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts
of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect:



| |  |  | the demand for our drug product candidates, if we obtain regulatory approval;
| | - |  | -----------------------------------------------------------------------------



| |  |  | our ability to set a price that we believe is fair for our products;
| | - |  | --------------------------------------------------------------------



| |  |  | our ability to generate revenue and achieve or maintain profitability;
| | - |  | ----------------------------------------------------------------------



| |  |  | the level of taxes that we are required to pay; and
| | - |  | ---------------------------------------------------



| |  |  | the availability of capital.
| | - |  | ----------------------------

Any denial in coverage or reduction in reimbursement from Medicare or other
government programs may result in a similar denial or reduction in payments from private payors, which may adversely affect our future profitability.

Our drug product candidates are biologics, which are complex to manufacture, and we may encounter difficulties in production, particularly with respect
to process development or scaling-out of our manufacturing capabilities. If we or any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our drug product candidates
for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.

Our drug product candidates are biologics and the process of manufacturing our products is complex, highly-regulated and subject to multiple risks. The
manufacture of our drug product candidates involves complex processes, including harvesting cells from patients, selecting and expanding certain cell types, engineering or reprogramming the cells in a certain manner to create either cardiopoietic
cells or NKR-T cells, expanding the cell population to obtain the desired dose, and ultimately infusing the cells back into a patients body. As a result of the complexities, the cost to manufacture our
drug product candidates, is higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult to reproduce. Our manufacturing process is susceptible to product loss or failure due to
logistical issues associated with the collection of blood cells, or starting material, from the patient, shipping such material to the manufacturing site, shipping the final product back to the patient, and infusing the patient with the product,
manufacturing issues associated with the differences in patient starting materials, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment, vendor or operator error,
inconsistency in cell growth, and variability in product characteristics. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. For example, we were only
able to produce C-Cure for 70% of the patients that we attempted to produce drug product candidate for in our Phase 2 clinical trial. If for any reason we lose a patients starting material or
later-developed product at any point in the process, the manufacturing process for that patient will need to be restarted and the resulting delay may adversely affect that patients outcome. If microbial, viral, or other contaminations are
discovered in our drug product candidates or in the manufacturing facilities in which our drug product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the
contamination. Because our drug product candidates are manufactured for each particular patient, we are required to maintain a chain of identity with respect to materials as they move from the patient to the manufacturing facility, through the
manufacturing process, and back to the patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in adverse patient outcomes, loss of product, or regulatory action including withdrawal of our products
from the market. Further, as drug product candidates are developed through preclinical to late stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods,
are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our drug product candidates to perform differently and
affect the results of ongoing clinical trials or other future clinical trials.



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Although we are working, or will be working, to develop commercially viable processes for the manufacture of our
drug product candidates, doing so is a difficult and uncertain task, and there are risks associated with scaling to the level required for later-stage clinical trials and commercialization, including, among others, cost overruns, potential problems
with process scale-out, process reproducibility, stability issues, lot consistency, and timely availability of reagents or raw materials. We may ultimately be unable to reduce the cost of goods for our drug
product candidates to levels that will allow for an attractive return on investment if and when those drug product candidates are commercialized.

In
addition, the manufacturing process that we develop for our drug product candidates is subject to FDA and foreign regulatory authority approval process, and we will need to make sure that we or our contract manufacturers, or CMOs, if any, are able
to meet all FDA and foreign regulatory authority requirements on an ongoing basis. If we or our CMOs are unable to reliably produce drug product candidates to specifications acceptable to the FDA or other regulatory authorities, we may not obtain or
maintain the approvals we need to commercialize such drug product candidates. Even if we obtain regulatory approval for any of our drug product candidates, there is no assurance that either we or our CMOs will be able to manufacture the approved
product to specifications acceptable to the FDA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges
could have an adverse effect on our business, financial condition, results of operations and growth prospects.

We may face competition from
biosimilars, which may have a material adverse impact on the future commercial prospects of our drug product candidates.

Even if we are
successful in achieving regulatory approval to commercialize a drug product candidate faster than our competitors, we may face competition from biosimilars. The Biologics Price Competition and Innovation Act of 2009, or BPCI Act, created an
abbreviated approval pathway for biological products that are demonstrated to be biosimilar to, or interchangeable with, an FDA-approved biological product. Biosimilarity means that the biological
product is highly similar to the reference product notwithstanding minor differences in clinically inactive components and there are no clinically meaningful differences between the biological product and the reference product in terms of safety,
purity, and potency of the product. To meet the higher standard of interchangeability, an applicant must provide sufficient information to show biosimilarity and demonstrate that the biological product can be expected to produce the same
clinical result as the reference product in any given patient and, if the biological product is administrated more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between the use of the
biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.

A reference
biological product is granted 12 years of exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years
after first licensure. First licensure typically means the initial date the particular product at issue was licensed in the United States. This does not include a supplement for the biological product or a subsequent application by the same sponsor
or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or
strength, unless that change is a modification to the structure of the biological product and such modification changes its safety, purity, or potency. Whether a subsequent application, if approved, warrants exclusivity as the first licensure of a
biological product is determined on a case-by-case basis with data.

This
data exclusivity does not prevent another company from developing a product that is highly similar to the innovative product, generating its own data, and seeking approval. Data exclusivity only assures that another company cannot rely upon the data
within the application for the reference biological product to support the biosimilar products approval.

In the European Union, the European
Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In the European Union, a competitor may reference
data supporting approval of an innovative biological product, but will not be able do so until eight years after the time of approval of the



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innovative product and to get its biosimilar on the market until ten years from the aforementioned approval. This 10-year marketing exclusivity period will
be extended to 11 years if, during the first eight of those ten years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies. In
addition, companies may be developing biosimilars in other countries that could compete with our products.

If competitors are able to obtain marketing
approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences.

We currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales
capabilities or enter into agreements with third parties to market and sell our drug product candidates, we may not be able to generate product revenue.

We currently have no sales, marketing, or commercial product distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources and time. We will have to compete with other pharmaceutical and biotechnology companies to
recruit, hire, train and retain marketing and sales personnel. If we are unable or decide not to establish internal sales, marketing and commercial distribution capabilities for any or all products we develop, we will likely pursue collaborative
arrangements regarding the sales and marketing of our products. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces.
Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales may be lower than
if we had commercialized our drug product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our drug product candidates.

There can be no assurance that we will be able to develop in-house sales and commercial distribution capabilities or
establish or maintain relationships with third-party collaborators to successfully commercialize any product in the United States, the European Union, overseas, and as a result, we may not be able to generate product revenue.

We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced or
effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our drug product candidates.

We face competition both in the United States and internationally, including from major multinational pharmaceutical companies, biotechnology companies and
universities and other research institutions. In addition, many universities and private and public research institutes are active in our target disease areas. As of the date of this Annual Report, our main competitors for C-Cure include Capricor Inc., Mesoblast Ltd, Biocardia Inc. and Vericel Corporation. As of the date of this Annual Report, our main competitors for NKR-2 and our other NKR-T cell product candidates include Bellicum Pharmaceuticals, Inc., Bluebird bio, Inc., Cellectis S.A., Juno Therapeutics, Inc., Kite Pharma Inc., Novartis AG, NantKwest Inc and Ziopharm Oncology, Inc.

Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced
marketing and manufacturing organizations. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed
in developing, acquiring or licensing on an exclusive basis, products that are more effective or less costly than any drug product candidate that we may develop, or achieve earlier patent protection, regulatory approval, product commercialization
and market penetration than we do. Additionally, technologies developed by our competitors may render our potential drug product candidates uneconomical or obsolete, and we may not be successful in marketing our drug product candidates against
competitors.

In addition, as a result of the expiration or successful challenge of our patent rights, we could face litigation with respect to the
validity and/or scope of patents relating to our competitors products. The availability of our competitors products could limit the demand, and the price we are able to charge, for any products that we may develop and commercialize.



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Risks Related to our Reliance on Third Parties

Cell-based therapies rely on the availability of specialty raw materials, which may not be available to us on acceptable terms or at all.

Engineered-cell therapies require many specialty raw materials, some of which are manufactured by small companies with limited resources and experience to
support a commercial product. The suppliers may be ill-equipped to support our needs, especially in non-routine circumstances like an FDA inspection or medical crisis,
such as widespread contamination. We also do not have contracts with many of these suppliers, and may not be able to contract with them on acceptable terms or at all. Accordingly, we may experience delays in receiving key raw materials to support
clinical or commercial manufacturing.

In addition, some raw materials are currently available from a single supplier, or a small number of suppliers. We
cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these materials for our intended purpose.

We rely on third parties to conduct, supervise and monitor our clinical trials. If these third parties do not successfully carry out their contractual
duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug product candidates and our business could be substantially harmed.

We rely on CROs, clinical investigators and clinical trial sites to ensure our clinical trials are conducted properly and on time. While we will have
agreements governing their activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs activities. Nevertheless, we will be responsible for ensuring that each of our clinical
trials is conducted in accordance with the applicable protocol, legal, and regulatory requirements and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our clinical investigators and CROs are required to comply with the GCPs for conducting, recording and reporting the results of clinical trials to
assure that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected. The FDA, the Competent Authorities of the Member States of the EEA, and comparable
foreign regulatory authorities, enforce these GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If we or our clinical investigators and CROs fail to comply with applicable GCPs, the clinical data
generated in our clinical trials may be deemed unreliable and the FDA, the EMA, or other foreign regulatory authorities may require us to perform additional clinical trials before approving any marketing applications. Upon inspection, the FDA or
other regulatory authorities may determine that our clinical trials did not comply with GCPs. In addition, our clinical trials will require a sufficient number of test subjects to evaluate the safety and effectiveness of our drug product candidates.
Accordingly, if our clinical investigators or CROs fail to comply with these regulations or fail to recruit a sufficient number of patients, we may be required to repeat such clinical trials, which would delay the regulatory approval process.

Our clinical investigators and CROs are not our employees, and we are therefore unable to directly monitor whether or not they devote sufficient time and
resources to our clinical programs. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities that could
harm our competitive position. If our clinical investigators or CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is
compromised due to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or
successfully commercialize, our drug product candidates. If any such event were to occur, our financial results and the commercial prospects for our drug product candidates would be harmed, our costs could increase, and our ability to generate
revenues could be delayed.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with
alternative CROs or to do so on commercially reasonable terms. Further, switching or adding additional CROs involves additional costs and requires management time and focus. In addition, there is a natural transition period when a new CRO commences
work. As a result, delays occur, which



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could materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not
encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

Risks Related to Intellectual Property

We depend
on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

We are dependent on patents, know-how, and proprietary technology, both our own and licensed from others. We license
technology from the Mayo Foundation for Medical Education and Research, or the Mayo Clinic, and the Trustees of Dartmouth College, or Dartmouth College. The Mayo Clinic may terminate our license agreement with them, or the Mayo License, on a product-by-product basis or licensed invention-by-licensed invention basis if we default in
making payment when due and payable or under other circumstances specified in the Mayo License, subject to 120 days prior written notice and opportunity to cure. The Mayo Clinic may also terminate the Mayo License if we deliberately make
false statements in reports delivered to the Mayo Clinic. Further, the Mayo Clinic may terminate the Mayo License immediately for our insolvency or bankruptcy. Dartmouth College may terminate either our 2010 license or 2014 license, if we fail to
meet a milestone within the specified time period, unless we pay the corresponding milestone payment. Dartmouth College may terminate either the 2010 license or 2014 license in the event we default or breach any of the provisions of the applicable
license, subject to 30 days prior notice and opportunity to cure. In addition, each of the 2010 license and 2014 license automatically terminates in the event we become insolvent, make an assignment for the benefit of creditors or file, or
have filed against us, a petition in bankruptcy. Furthermore, Dartmouth College may terminate our 2010 license, after April 30, 2024, if we fail to meet the specified minimum net sales obligations for any year, unless we pay to Dartmouth
College the royalty we would otherwise be obligated to pay had we met such minimum net sales obligation. Any termination of these licenses could result in the loss of significant rights and could harm our ability to commercialize our drug product
candidates. Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including those relating to:



| |  |  | the scope of rights granted under the license agreement and other interpretation-related issues;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our right to sublicense patent and other rights to third parties under collaborative development relationships;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | the amount and timing of milestone and royalty payments;
| | - |  | --------------------------------------------------------



| |  |  | whether we are complying with our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our drug product candidates; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and by us and our partners.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements
on acceptable terms, we may be unable to successfully develop and commercialize the affected drug product candidates. We are generally also subject to all of the same risks with respect to protection of intellectual property that we license as we
are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize our products could suffer.

We could be unsuccessful in obtaining or maintaining adequate patent protection for one or more of our drug product candidates.

The patent application process is expensive and time-consuming, and we and our current or future licensors and licensees may not be able to apply for or
prosecute patents on certain aspects of our drug product candidates or deliver technologies at a reasonable cost, in a timely fashion, or at all. It is also possible that



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we or our current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before
it is too late to obtain patent protection on them. Therefore, our patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. It is possible that defects of form in the preparation or
filing of our patents or patent applications may exist, or may arise in the future, such as with respect to proper priority claims, inventorship, claim scope or patent term adjustments. Under our existing license agreements with the Mayo Clinic and
Dartmouth College, we have the right, but not the obligation, to enforce our licensed patents. If our current licensors, or any future licensors or licensees, are not fully cooperative or disagree with us as to the prosecution, maintenance or
enforcement of any patent rights, such patent rights could be compromised and we might not be able to prevent third parties from making, using, and selling competing products. If there are material defects in the form or preparation of our patents
or patent applications, such patents or applications may be invalid and unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how. Any of these outcomes
could impair our ability to prevent competition from third parties, which may have an adverse impact on our business, financial condition and operating results.

We currently have issued patents and patent applications directed to our drug product candidates and medical devices, and we anticipate that we will file
additional patent applications both in the United States and in other countries, as appropriate. However, we cannot predict:



| |  |  | if and when any patents will issue from patent applications;
| | - |  | ------------------------------------------------------------



| |  |  | the degree and range of protection any issued patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent our patents;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | whether others will apply for or obtain patents claiming aspects similar to those covered by our patents and patent applications; or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | whether we will need to initiate litigation or administrative proceedings to defend our patent rights, which may be costly whether we win or lose.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------

We cannot be certain, however, that the claims in our pending patent applications will be considered patentable by the USPTO or by patent offices in foreign
countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries.

The strength of patents in the biotechnology and pharmaceutical field can be uncertain, and evaluating the scope of such patents involves complex legal and
scientific analyses. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our drug product candidates or uses thereof in the United States or in other
foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, or held unenforceable. Furthermore, even if they
are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing their products to avoid being covered by our claims. If the breadth or strength of protection provided by the
patent applications we hold with respect to our drug product candidates is threatened, this could dissuade companies from collaborating with us to develop, and could threaten our ability to commercialize, our drug product candidates. Further,
because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our drug product candidates.
Furthermore, for U.S. applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of
the subject matter covered by the patent claims of our applications. For U.S. applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law in view of the passage of
the America Invents Act, which brought into effect significant changes to the U.S. patent laws, including new procedures for challenging pending patent applications and issued patents.

European patent EP2432482, entitled Pharmaceutical composition for the treatment of heart diseases, was granted by the European Patent Office
(EPO) on April 15, 2015. The granted claims relate to compositions comprising specific cells committed to the generation of heart tissue. A notice of opposition to this patent was filed at the EPO on January 15, 2016 by an
anonymous third party. The opposition requests revocation of the patent in its entirety. Both parties presented additional arguments in writing, oral proceedings took place at the EPO on March 6, 2017. The oral proceedings resulted in
revocation of the patent, a decision that still needs to be confirmed in writing. This decision can be appealed.



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US Patent No. 9,181,527, entitled T cell receptor-deficient T cell compositions, was issued by
the USPTO on November 10, 2015. The issued claims relate to isolated primary human T-cells that have been specifically modified. A request for ex parte
re-examination of claim 1 of the issued patent was filed at the USPTO on February 10, 2016 by an anonymous third party. The request for re-examination was granted,
and the proceeding has been completed. A re-examination certificate was issued on January 6, 2017, confirming the patentability of claim 1 as amended. The patent thus remains valid and enforceable.

A new request for ex parte re-examination of claim 3 of the same patent (US 9,181,527) was filed at the USPTO
on December 27, 2016 by an anonymous third party. On March 14, 2017, the USPTO has issued a decision denying the request for re-examination, as no substantial new question of patentability was
raised. The patent thus remains valid and enforceable.

Patents have a limited lifespan. In the United States, the natural expiration of a patent is
generally 20 years after it is filed. Various extensions may be available; however the life of a patent, and the protection it affords, is limited. Further, the extensive period of time between patent filing and regulatory approval for a drug
product candidate limits the time during which we can market a drug product candidate under patent protection, which may particularly affect the profitability of our early-stage drug product candidates. If we encounter delays in our clinical trials,
the period of time during which we could market our drug product candidates under patent protection would be reduced. Without patent protection for our drug product candidates, we may be open to competition from biosimilar versions of our drug
product candidates.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on drug product candidates in all countries throughout the world would be prohibitively expensive, and our
intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal
and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the
United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have
patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems
of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult
for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. For example, an April 2014 report from the Office of the United States Trade Representative identified a number of
countries, including India and China, where challenges to the procurement and enforcement of patent rights have been reported. Several countries, including India and China, have been listed in the report every year since 1989. Proceedings to enforce
our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent
applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly,
our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.

In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect
proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and any other elements of our product discovery and development processes that
involve proprietary know-how, information, or technology that is not covered by patents. Trade secrets, however, may be difficult to protect. We seek to protect our proprietary



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processes, in part, by entering into confidentiality agreements with our employees, consultants, outside scientific advisors, contractors and collaborators. Although we use reasonable efforts to
protect our trade secrets, our employees, consultants, outside scientific advisors, contractors, and collaborators might intentionally or inadvertently disclose our trade secret information to competitors. In addition, competitors may otherwise gain
access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the
United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property
to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and
financial condition.

Third-party claims of intellectual property infringement against us or our collaborators may prevent or delay our product
discovery and development efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of
third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including
interference, derivation, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Recently, due to changes in U.S. law referred to as patent reform, new procedures including inter
partes review and post-grant review have been implemented. This reform adds uncertainty to the possibility of challenge to our patents in the future.

Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we are developing our drug
product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our drug product candidates may give rise to claims of infringement of the patent rights of others.

Although we have conducted analyses of the patent landscape with respect to our drug product candidates, and based on these analyses, we believe that we will
be able to commercialize our drug product candidates, third parties may nonetheless assert that we infringe their patents, or that we are otherwise employing their proprietary technology without authorization, and may sue us. There may be
third-party patents of which we are currently unaware with claims to compositions, formulations, methods of manufacture, or methods of use or treatment that cover our drug product candidates. Because patent applications can take many years to issue,
there may be currently pending patent applications that may later result in issued patents that our drug product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies or the
manufacture, use, or sale of our drug product candidates infringes upon these patents. If any such third-party patents were held by a court of competent jurisdiction to cover our technologies or drug product candidates, the holders of any such
patents may be able to block our ability to commercialize the applicable drug product candidate unless we obtain a license under the applicable patents, or until such patents expire or are finally determined to be held invalid or unenforceable. Such
a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, our ability to commercialize our drug product candidates may be
impaired or delayed, which could in turn significantly harm our business.

Third parties asserting their patent rights against us may seek and obtain
injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our drug product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and
would be a substantial diversion of management and other employee resources from our business, and may impact our reputation. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble
damages and attorneys fees for willful infringement, obtain one or more licenses from third parties, pay royalties, or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. In that
event, we would be unable to further develop and commercialize our drug product candidates, which could harm our business significantly.



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We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which
could be expensive, time-consuming, and unsuccessful.

Competitors may infringe our patents or the patents of our licensors. To cease such
infringement or unauthorized use, we may be required to file patent infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding or a declaratory judgment action against us, a court may decide that one
or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense
proceeding could put one or more of our patents at risk of being invalidated, held unenforceable, interpreted narrowly, or amended such that they do not cover our drug product candidates. Such results could also put our pending patent applications
at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. Interference or derivation proceedings provoked by
third parties or brought by the USPTO may be necessary to determine the priority of inventions with respect to, or the correct inventorship of, our patents or patent applications or those of our licensors. An unfavorable outcome could result in a
loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on
commercially reasonable terms. Litigation, interference, or derivation proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of
our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts
or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our ordinary shares.

Issued patents
covering our drug product candidates could be found invalid or unenforceable if challenged in court or before the USPTO or comparable foreign authority.

If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering one of our drug product candidates, the
defendant could counterclaim that the patent covering our drug product candidate is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there are
numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such
mechanisms include re-examination, inter partes review, post-grant review, and equivalent proceedings in foreign jurisdictions, such as opposition or derivation proceedings. Such proceedings could result in
revocation or amendment to our patents in such a way that they no longer cover and protect our drug product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity of our
patents, for example, we cannot be certain that there is no invalidating prior art of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or
unenforceability, we would lose at least part, and perhaps all, of the patent protection on our drug product candidates. Such a loss of patent protection could have a material adverse impact on our business.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and
enforcing patents in the biopharmaceutical industry involves, both technological and legal complexity, and is therefore costly, time-consuming, and inherently uncertain. Numerous recent changes to the patent laws and proposed changes to the rules of
the USPTO may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. For example, the Leahy-Smith America Invents Act, or AIA, enacted in 2011 involves significant changes in patent
legislation. An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a first-to-file
system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before us
could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent
application.



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Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent
infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO
proceedings compared to the evidentiary standard in United States federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even
though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been
invalidated if first challenged by the third party as a defendant in a district court action.

In addition, recent court rulings in cases such as
Association for Molecular Pathology v. Myriad Genetics, Inc. (Myriad I); BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig.,(Myriad II); and Promega Corp. v. Life Technologies Corp. have narrowed the scope of patent
protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created
uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our
ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. For example, in a recent case, Assoc. for Molecular Pathology v. Myriad Genetics, Inc., the U.S. Supreme Court held that certain
claims to naturally-occurring substances are not patentable. Although we do not believe that any of the patents owned or licensed by us will be found invalid based on this decision, we cannot predict how future decisions by the courts, the U.S.
Congress, or the USPTO may impact the value of our patents.

We may be subject to claims that our employees, consultants, or independent contractors
have wrongfully used or disclosed confidential information of third parties.

We have received confidential and proprietary information from third
parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or
otherwise used or disclosed confidential information of these third parties or our employees former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation
could result in substantial cost and be a distraction to our management and employees.

Failure to comply with proper procedure for obtaining and
maintaining patents could have an adverse effect on our business.

Obtaining and maintaining our patent protection depends on compliance with
various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these
requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the
lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. Although an inadvertent
lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in
partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents. In any such event, our competitors might be able to enter the market, which would have a material adverse effect on our business.



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Risks Related to Our Organization, Structure and Operation

Our future results will suffer if we do not effectively manage our expanded operations as a result of our acquisition of OnCyte.

We obtained access to our CAR-T NKR cell drug product candidates and related technology, including technology licensed
from Dartmouth College, in January 2015, through our acquisition of OnCyte, LLC, or OnCyte, from Celdara Medical, LLC, a privately-held U.S. biotechnology company. Our acquisition of OnCyte significantly changed the composition of our operations,
markets and drug product candidate mix. Our future success depends, in part, on our ability to address these changes, and, where necessary, to attract and retain new personnel that possess the requisite skills called for by these changes.

Our failure to adequately address the financial, operational or legal risks of the OnCyte acquisition, or any future acquisitions, license arrangements, other
strategic transactions could harm our business. Financial aspects of these transactions that could alter our financial position, reported operating results or ADS or ordinary share price include:



| |  |  | use of cash resources;
| | - |  | ----------------------



| |  |  | higher than anticipated acquisition costs and expenses;
| | - |  | -------------------------------------------------------



| |  |  | potentially dilutive issuances of equity securities;
| | - |  | ----------------------------------------------------



| |  |  | the incurrence of debt and contingent liabilities, impairment losses or restructuring charges;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | large write-offs and difficulties in assessing the relative percentages of in-process research and development expense that can be immediately written off as compared to the
amount that must be amortized over the appropriate life of the asset; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amortization expenses related to other intangible assets.
| | - |  | ---------------------------------------------------------

Operational risks that could harm our existing
operations or prevent realization of anticipated benefits from these transactions include:



| |  |  | challenges associated with managing an increasingly diversified business;
| | - |  | -------------------------------------------------------------------------



| |  |  | disruption of our ongoing business;
| | - |  | -----------------------------------



| |  |  | difficulty and expense in assimilating the operations, products, technology, information systems or personnel of the acquired company;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | diversion of managements time and attention from other business concerns;
| | - |  | --------------------------------------------------------------------------



| |  |  | entry into a geographic or business market in which we have little or no prior experience;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | inability to maintain uniform standards, controls, procedures and policies;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the assumption of known and unknown liabilities of the acquired business or asset, including intellectual property claims; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | subsequent loss of key personnel.
| | - |  | ---------------------------------

Our future success depends, in part, upon our ability to manage our
expansion opportunities. Integrating new operations into our existing business in an efficient and timely manner, successfully monitoring our operations, costs, regulatory compliance and customer relationships, and maintaining other necessary
internal controls pose substantial challenges for us. As a result, we cannot assure you that our expansion or acquisition opportunities will be successful, or that we will realize our expected operating efficiencies, cost savings, revenue
enhancements, synergies or other benefits.

We are highly dependent on our Chief Executive Officer and members of our executive management team, and
if we are not successful in motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract, motivate and retain highly
qualified managerial, scientific and medical personnel. We are highly dependent on members of our executive management team, particularly our chief executive officer, Christian Homsy (permanent representative of LSS Consulting SPRL). We do not
maintain key man insurance on the life of Christian Homsy, or the lives of any of our other employees. The loss of the services of any members of our executive management team, and our inability to find suitable replacements, could
result in delays in product development and harm our business.



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Competition for skilled personnel in the biotechnology and pharmaceutical industries is intense and the turnover
rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

To induce valuable employees
to remain at our company, in addition to salary and cash incentives, we have provided warrants that vest over time. The value to employees of these equity grants that vest over time may be significantly affected by movements in our share price that
are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.

We will need to grow the size
and capabilities of our organization, and we may experience difficulties in managing this growth.

As of February 28, 2017, we had 70
full-time, 4 part-time employees and 6 self-employed collaborators. As our drug product candidates move into later stage clinical development and towards commercialization, we must add a significant number of additional managerial, operational,
sales, marketing, financial, and other personnel. Future growth will impose significant added responsibilities on members of management, including:



| |  |  | identifying, recruiting, integrating, maintaining, and motivating additional employees;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | managing our internal development efforts effectively, including the clinical and FDA review process for our drug product candidates, while complying with our contractual obligations to contractors and other third
parties; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | improving our operational, financial and management controls, reporting systems, and procedures.
| | - |  | ------------------------------------------------------------------------------------------------

Our future
financial performance and our ability to commercialize our drug product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention
away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able
to successfully implement the tasks necessary to further develop and commercialize our drug product candidates and, accordingly, may not achieve our research, development, and commercialization goals.

If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur
debt or assume contingent liabilities, and subject us to other risks.

We may evaluate various acquisitions and strategic partnerships, including
licensing or acquiring complementary products, intellectual property rights, technologies, or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:



| |  |  | increased operating expenses and cash requirements;
| | - |  | ---------------------------------------------------



| |  |  | the assumption of additional indebtedness or contingent liabilities;
| | - |  | --------------------------------------------------------------------



| |  |  | assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the diversion of our managements attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or drug product candidates and regulatory approvals; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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In addition, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations,
incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities and this
inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

If
we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use,
storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally
contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials, which could cause an interruption of our commercialization efforts, research and development
efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and
specified waste products. Although we believe that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot
guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or
other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot
predict the impact of such changes and cannot be certain of our future compliance. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future
laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions. We do not currently carry biological or hazardous
waste insurance coverage.

Although we maintain workers compensation insurance to cover us for costs and expenses we may incur due to injuries to
our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.

Risks from the improper conduct of employees, agents, contractors, consultants or collaborators could adversely affect our reputation and our business,
prospects, operating results, and financial condition.

We cannot ensure that our compliance controls, policies, and procedures will in every
instance protect us from acts committed by our employees, agents, contractors, or collaborators that would violate the laws or regulations of the jurisdictions in which we operate, including, without limitation, healthcare, employment, foreign
corrupt practices, environmental, competition, and patient privacy and other privacy laws and regulations. Such improper actions could subject us to civil or criminal investigations, and monetary and injunctive penalties, and could adversely impact
our ability to conduct business, operating results, and reputation. In particular, our business activities may be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery or anti-corruption laws, regulations or rules of other
countries in which we operate, including the U.K. Bribery Act. The FCPA generally prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a
non-U.S. government official in order to influence official action, or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly
reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of
non-U.S. governments.

Additionally, in many other countries, the health care providers who prescribe
pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA. Recently the Securities and
Exchange Commission, or SEC, and Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical companies. There is no certainty that all of our



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employees, agents, contractors, consultants or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of
these laws. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities
in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage
our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results, and financial condition.

Our relationships with health care professionals, customers, independent contractors, consultants and third-party payors may be subject, directly or
indirectly, to applicable anti-kickback laws, fraud and abuse laws, false claims laws, health information privacy and security laws, transparency laws and other healthcare laws and regulations, which could expose us to penalties, and could result in
contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

Our arrangements with health care
professionals, customers, independent contractors, consultants and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and
relationships.

In addition, we may be subject to health information privacy and security regulation of the European Union, the United States and other
jurisdictions in which we conduct our business. For example, the laws that may affect our ability to operate include:



| |  |  | the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid
programs;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | U.S. federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties against individuals or entities for knowingly
presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to
the federal government;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit
program and making false statements relating to healthcare matters;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | HIPAA, as amended by the Health Information Technology and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose certain obligations, including mandatory contractual terms,
on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the federal Open Payments Program that was created under the ACA, which requires certain manufacturers of covered pharmaceutical drugs, biologics, devices and medical supplies to track and report annually all payments
or other transfers of value provided to physicians and teaching hospitals and certain ownership and investment interests held by physicians or their family members in applicable manufacturers and group purchasing organizations; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | analogous state and laws and regulations in other jurisdictions, such as state anti-kickback and false claims laws, which may be broader in scope and also apply to sales or marketing arrangements and claims involving
healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and state and laws in other jurisdiction governing the privacy and security of health information in
certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws
and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or
other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties,
including, without limitation, damages, fines, imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations or other sanctions. If any of
the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws and regulations, it may be subject to criminal, civil or administrative sanctions, including exclusions
from participation in government funded healthcare programs.

Failure to build our finance infrastructure and improve our accounting systems and
controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.

As a
U.S. public company, we operate in an increasingly demanding regulatory environment that requires us to comply with, among things, the Sarbanes-Oxley Act of 2002, or SOX as from December 31, 2016, and related rules and regulations
of the SECs substantial disclosure requirements, accelerated reporting requirements and complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal
control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.

We have limited accounting personnel and other resources to address our internal controls and procedures. Our independent registered public accounting firm
has not conducted an audit of our internal control over financial reporting. However, in connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2016, we identified a material weakness in our
internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, such that there is reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will
not be prevented or detected on a timely basis by our employees. The material weakness identified is related to a lack of segregation of duties given the size of our finance and accounting team.

As of December 31, 2014, we reported three material weaknesses. Since then, we have taken several remedial actions to address these material weaknesses.
In particular, we have hired in 2015 additional staff for the finance and legal departments, including a corporate controller and legal advisor. Also, the Group has worked in 2016 with an independent firm to better define, formalize and upgrade our
internal controls and processes with the goal of being compliant with the SOX regulation by end of 2016. Under the supervision of the Companys management, an independent firm tested our internal controls and processes respectively in September
2016 and January 2017 in light of the SOX regulation. No additional material weaknesses were identified other than those related to the segregation of duties. Management will be addressing the recommendations of the independent firm in view of a
continuous improvement of our processes.

As a result of these actions, two out of three material weaknesses identified as of December 31, 2014 are
no longer valid. The lack of accounting resources to fulfill the reporting requirements of IFRS and the lack of comprehensive knowledge of IFRS accounting policies are no longer identified as material weaknesses as of December 31, 2016.

Furthermore, we believe it is possible that if our independent registered public accounting firm had performed an audit of our internal control over financial
reporting, other material weaknesses may have been identified. Section 404 of the Sarbanes-Oxley Act, or Section 404, requires that we include a report of management on our internal control over financial reporting in our annual report on
Form 20-F beginning with our annual report for the fiscal year ending December 31, 2016. However, until we cease to be an emerging growth company, as that term is defined in the Jumpstart Our
Business Startups Act of 2012, or the JOBS Act, our independent registered public accounting firm will not be required to attest to and report on the effectiveness of our internal control over financial reporting.



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Our management may conclude that our internal control over financial reporting is not effective. Moreover, even
if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied
with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations
may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation, testing and any required remediation.

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended
from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment,
we could experience material misstatements in our consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our
access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of
corporate assets and subject us to potential delisting from The NASDAQ Global Market, or NASDAQ, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements for prior periods.

Our business and operations would suffer in the event of system failures.

Despite the implementation of security measures, our internal computer systems and those of our current and future CROs and other contractors and consultants
are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident or security breach to
date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future
clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data
or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our third-party research institution collaborators, CROs, CMOs, suppliers, and other contractors and consultants, could be
subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, and other natural or man-made
disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. Damage or extended periods of interruption to our corporate,
development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized entry or other events could cause us to cease or delay development of some or all of our drug product candidates. Although we maintain
property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under such circumstances and our business may be seriously harmed by such delays and interruption.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug
product candidates.

We face an inherent risk of product liability as a result of the clinical testing of our drug product candidates and will
face an even greater risk if we commercialize any products. For example, we may be sued if our drug product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing
or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be
asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our drug product candidates.



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Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:



| |  |  | decreased demand for our products;
| | - |  | ----------------------------------



| |  |  | injury to our reputation;
| | - |  | -------------------------



| |  |  | withdrawal of clinical trial participants and inability to continue clinical trials;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | initiation of investigations by regulators;
| | - |  | -------------------------------------------



| |  |  | costs to defend the related litigation;
| | - |  | ---------------------------------------



| |  |  | a diversion of managements time and our resources;
| | - |  | ---------------------------------------------------



| |  |  | substantial monetary awards to trial participants or patients;
| | - |  | --------------------------------------------------------------



| |  |  | product recalls, withdrawals or labeling, marketing or promotional restrictions;
| | - |  | --------------------------------------------------------------------------------



| |  |  | loss of revenue;
| | - |  | ----------------



| |  |  | exhaustion of any available insurance and our capital resources;
| | - |  | ----------------------------------------------------------------



| |  |  | the inability to commercialize any drug product candidate; and
| | - |  | --------------------------------------------------------------



| |  |  | a decline in our share price.
| | - |  | -----------------------------

Our inability to obtain sufficient product liability insurance at an acceptable
cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with collaborators. Although our clinical trials are currently covered by a clinical trial insurance, the
amount of such insurance coverage may not be adequate, we may be unable to maintain such insurance, or we may not be able to obtain additional or replacement insurance at a reasonable cost, if at all. Our insurance policies may also have various
exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our
insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or
adequate should any claim arise.

Our international operations subject us to various risks, and our failure to manage these risks could adversely
affect our results of operations.

We face significant operational risks as a result of doing business internationally, such as:



| |  |  | fluctuations in foreign currency exchange rates;
| | - |  | ------------------------------------------------



| |  |  | potentially adverse and/or unexpected tax consequences, including penalties due to the failure of tax planning or due to the challenge by tax authorities on the basis of transfer pricing and liabilities imposed from
inconsistent enforcement;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | potential changes to the accounting standards, which may influence our financial situation and results;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | becoming subject to the different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | reduced protection of, or significant difficulties in enforcing, intellectual property rights in certain countries;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | difficulties in attracting and retaining qualified personnel;
| | - |  | -------------------------------------------------------------



| |  |  | restrictions imposed by local labor practices and laws on our business and operations, including unilateral cancellation or modification of contracts; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | rapid changes in global government, economic and political policies and conditions, political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events, and potential failure in
confidence of our suppliers or customers due to such changes or events; and tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers.
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We are subject to certain covenants as a result of certain
non-dilutive financial support we have received to date.

We have received
non-dilutive financial support totaling 23.1 million as of December 31, 2016, to support various research programs from the Walloon Region, or the Region. The support has been granted in the
form of recoverable cash advances, or RCAs, and subsidies.

In the event we decide to exploit any discoveries or products from the research funded by
under an RCA, the relevant RCA becomes refundable, otherwise the RCA is not refundable. We own the intellectual property rights which result from the research programs partially funded by the Region, unless we decide not to exploit, or cease to
exploit, the results of the research in which case the results and intellectual property rights are transferred to the Region. Subject to certain exceptions, however, we cannot grant to third parties, by way of license or otherwise, any right to use
the results without the prior consent of the Region. We also need the consent of the Region to transfer an intellectual property right resulting from the research programs or a transfer or license of a prototype or installation. Obtaining such
consent from the Region could give rise to a review of the applicable financial terms. The RCAs also contain provisions prohibiting us from conducting research for any other person which would fall within the scope of a research program of one of
the RCAs. Most RCAs provide that this prohibition is applicable during the research phase and the decision phase but a number of RCAs extend it beyond these phases.

Subsidies received from the Region are dedicated to funding research programs and patent applications and are not refundable. We own the intellectual property
rights which result from the research programs or with regard to a patent covered by a subsidy. Subject to certain exceptions, however, we cannot grant to third parties, by way of license, transfer or otherwise, any right to use the patents or
research results without the prior consent of the Region. In addition, certain subsidies require that we exploit the patent in the countries where the protection was granted and to make an industrial use of the underlying invention. In case of
bankruptcy, liquidation or dissolution, the rights to the patents covered by the patent subsidies will be assumed by the Region by operation of law unless the subsidy is reimbursed. Furthermore, we would lose our qualification as a small or medium-sized enterprise, the patent subsidies will terminate and no additional expenses will be covered by such patent subsidies.

We may be exposed to significant foreign exchange risk.

We incur portions of our expenses, and may in the future derive revenues, in currencies other than the euro, in particular, the U.S. dollar. As a result, we
are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future
exchange rates between particular foreign currencies and the euro. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to have a negative impact on our revenue and earnings growth as U.S. dollar
revenue and earnings, if any, would be translated into euros at a reduced value. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of
operations and cash flows.

The requirements of being a U.S. public company may strain our resources and divert managements attention.

We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, the
Securities and Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations adopted by the SEC and the Public Corporation Accounting Oversight Board. Further, compliance with various regulatory reporting requires significant
commitments of time from our management and our directors, which reduces the time available for the performance of their other responsibilities. Our failure to track and comply with the various rules may materially adversely affect our reputation,
ability to obtain the necessary certifications to financial statements, lead to additional regulatory enforcement actions, and could adversely affect the value of the ADSs or the ordinary shares.



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The investment of our cash and cash equivalents may be subject to risks that may cause losses and affect the
liquidity of these investments.

As of December 31, 2016, we had cash and cash equivalents of 48.4 million and short term investments
of 34.2 million. We historically have invested substantially all of our available cash and cash equivalents in corporate bank accounts. Pending their use in our business, we may invest the net proceeds of the global offering in
investments that may include corporate bonds, commercial paper, certificates of deposit and money market funds. These investments may be subject to general credit, liquidity, and market and interest rate risks. We may realize losses in the fair
value of these investments or a complete loss of these investments, which would have a negative effect on our financial statements.

Risks Related to
Ownership of our Ordinary Shares and ADSs

The market price for the ADSs may be volatile or may decline regardless of our operating performance.

The trading price of the ADSs has fluctuated, and is likely to continue to fluctuate, substantially. The trading price of the ADSs depends on a
number of factors, many of which are beyond our control and may not be related to our operating performance, including, among others:



| |  |  | actual or anticipated fluctuations in our financial condition and operating results;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | actual or anticipated changes in our growth rate relative to our competitors;
| | - |  | -----------------------------------------------------------------------------



| |  |  | competition from existing products or new products that may emerge;
| | - |  | -------------------------------------------------------------------



| |  |  | announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | issuance of new or updated research or reports by securities analysts;
| | - |  | ----------------------------------------------------------------------



| |  |  | fluctuations in the valuation of companies perceived by investors to be comparable to us;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | additions or departures of key management or scientific personnel;
| | - |  | ------------------------------------------------------------------



| |  |  | disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes to coverage policies or reimbursement levels by commercial third-party payors and government payors and any announcements relating to coverage policies or reimbursement levels;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | announcement or expectation of additional debt or equity financing efforts;
| | - |  | ---------------------------------------------------------------------------



| |  |  | sales of the ADSs or ordinary shares by us, our insiders or our other shareholders; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | general economic and market conditions.
| | - |  | ---------------------------------------

These and other market and industry factors may cause the market
price and demand for the ADSs to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their ADSs and may otherwise negatively affect the liquidity of our ADSs shares. In
addition, the stock market in general, and biotechnology and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these
companies.

Fluctuations in the exchange rate between the U.S. dollar and the euro may increase the risk of holding the ADSs.

Our shares currently trade on Euronext Brussels and Euronext Paris in euros, while the ADSs trade on NASDAQ in U.S. dollars. Fluctuations in the exchange rate
between the U.S. dollar and the euro may result in differences between the value of the ADSs and the value of our ordinary shares, which may result in heavy trading by investors seeking to exploit such differences. In addition, as a result of
fluctuations in the exchange rate between the U.S. dollar and the euro, the U.S. dollar equivalent of the proceeds that a holder of the ADSs would receive upon the sale in Belgium of any ordinary shares withdrawn from the depositary upon calculation
of the corresponding ADSs and the U.S. dollar equivalent of any cash dividends paid in euros on our ordinary shares represented by the ADSs could also decline.



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Holders of the ADSs are not treated as shareholders of our company.

Holders of the ADSs are not treated as shareholders of our company, unless they cancel the ADSs and withdraw our ordinary shares underlying the ADSs. The
depositary (or its nominee) is the shareholder of the ordinary shares underlying the ADSs. Holders of ADSs therefore do not have any rights as shareholders of our company, other than the rights that they have pursuant to the deposit agreement.

If securities or industry analysts do not publish research or publish inaccurate research or unfavorable research about our business, the price
of the ordinary shares and the ADSs and trading volume could decline.

The trading market for the ordinary shares and the ADSs depends in
part on the research and reports that securities or industry analysts publish about us or our business. If no or few securities or industry analysts cover our company, the trading price for the ordinary shares and the ADSs would be negatively
impacted. If one or more of the analysts who covers us downgrades the ordinary shares or the ADSs or publishes incorrect or unfavorable research about our business, the price of the ordinary shares and the ADSs would likely decline. If one or more
of these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades the ordinary shares or the ADSs, demand for the ADSs and ordinary shares could decrease, which could cause the price of the ADSs and ordinary
shares or trading volume to decline.

We have no present intention to pay dividends on our ordinary shares in the foreseeable future and,
consequently, your only opportunity to achieve a return on your investment during that time is if the price of the ADSs or the ordinary shares increases.

We have no present intention to pay dividends in the foreseeable future. Any recommendation by our board of directors to pay dividends will depend on many
factors, including our financial condition (including losses carried-forward), results of operations, legal requirements and other factors. Furthermore, pursuant to Belgian law, the calculation of amounts available for distribution to shareholders,
as dividends or otherwise, must be determined on the basis of our non-consolidated statutory accounts prepared in accordance with Belgian accounting rules. In addition, in accordance with Belgian law and our
articles of association, we must allocate each year an amount of at least 5% of our annual net profit under our non-consolidated statutory accounts to a legal reserve until the reserve equals 10% of our share
capital. Therefore, we are unlikely to pay dividends or other distributions in the foreseeable future. If the price of the ADSs or the ordinary shares declines before we pay dividends, you will incur a loss on your investment, without the likelihood
that this loss will be offset in part or at all by potential future cash dividends.

Our shareholders residing in countries other than Belgium may
be subject to double withholding taxation with respect to dividends or other distributions made by us.

Any dividends or other distributions we
make to shareholders will, in principle, be subject to withholding tax in Belgium at a rate of 25%, except for shareholders which qualify for an exemption of withholding tax such as, among others, qualifying pension funds or a company qualifying as
a parent company within the meaning of the Council Directive (90/435/EEC) July 23, 1990, known as the Parent-Subsidiary Directive, or that qualify for a lower withholding tax rate or an exemption by virtue of a tax treaty. Various
conditions may apply and shareholders residing in countries other than Belgium are advised to consult their advisers regarding the tax consequences of dividends or other distributions made by us. Our shareholders residing in countries other than
Belgium may not be able to credit the amount of such withholding tax to any tax due on such dividends or other distributions in any other country than Belgium. As a result, such shareholders may be subject to double taxation in respect of such
dividends or other distributions. Belgium and the United States have concluded a double tax treaty concerning the avoidance of double taxation, or the U.S.-Belgium Tax Treaty. The U.S.-Belgium Tax Treaty reduces the applicability of Belgian
withholding tax to 15%, 5% or 0% for U.S. taxpayers, provided that the U.S. taxpayer meets the limitation of benefits conditions imposed by the U.S.-Belgium Tax Treaty. The Belgian withholding tax is generally reduced to 15% under the U.S.-Belgium
Tax Treaty. The 5% withholding tax applies in case where the U.S. shareholder is a company which holds at least 10% of the shares in the company. A 0% Belgian withholding tax applies when the shareholder is a company which has held at least 10% of
the shares in the company for at least 12 months, or is, subject to certain conditions, a U.S. pension fund. The U.S. shareholders are encouraged to consult their own tax advisers to determine whether they can invoke the benefits and meet the
limitation of benefits conditions as imposed by the U.S.-Belgium Tax Treaty.



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We believe that we were a passive foreign investment company (a PFIC) for the 2015 taxable year
and in prior taxable years, but that we likely were not a PFIC for our 2016 taxable year. It is uncertain whether we will be a PFIC in future taxable years. Our status as a PFIC is a fact intensive determination and we cannot provide any assurances
regarding our PFIC status for past, current or future taxable years. U.S. holders of the ADSs may suffer adverse tax consequences if we are characterized as a PFIC for any taxable year.

Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assets
that produce passive income or are held for the production of passive income, including cash, we would be characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. For purposes of these tests, passive
income includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or
business. If we are characterized as a PFIC, U.S. holders of the ADSs may suffer adverse tax consequences, including having gains realized on the sale of the ADSs treated as ordinary income, rather than capital gain, the loss of the preferential
rate applicable to dividends received on the ADSs by individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of the ADSs.

Our status as a PFIC will depend on the composition of our income, including the receipt of milestones, and the composition and value of our assets (which may
be determined in large part by reference to the market value of the ADSs and ordinary shares, which may be volatile) from time to time.

We believe we
were a PFIC in our 2015 taxable year and in prior taxable years, but that we likely were not a PFIC for our 2016 taxable year. With respect to our 2017 taxable year and possibly future taxable years, it is uncertain whether we will be a PFIC based
upon the expected value of our assets, including any goodwill, and the expected composition of our income and assets. Our status as a PFIC is a fact intensive determination made on an annual basis and we cannot provide any assurances regarding our
PFIC status for past, current or future taxable years.

Future Sales Of Ordinary Shares Or ADSs By Existing Shareholders Could Depress The Market
Price Of The ADSs.

If our existing shareholders sell, or indicate an intent to sell, substantial amounts of ordinary shares or ADSs in the public
market, the trading price of the ADSs could decline significantly. In the future we may file one or more registration statements with the SEC covering ordinary shares available for future issuance under our equity incentive plans. Upon effectiveness
of such registration statements, any shares subsequently issued under such plans will be eligible for sale in the public market, except to the extent that they are restricted by the lock-up agreements referred
to above and subject to compliance with Rule 144 in the case of our affiliates. Sales of a large number of the shares issued under these plans in the public market could have an adverse effect on the market price of the ADSs and the ordinary shares.

We are a Belgian public limited liability company, and shareholders of our company may have different and in some cases more limited shareholder
rights than shareholders of a U.S. listed corporation.

We are a public limited liability company incorporated under the laws of Belgium. Our
corporate affairs are governed by Belgian corporate and securities law. The rights provided to our shareholders under Belgian corporate law and our articles of association differ in certain respects from the rights that you would typically enjoy as
a shareholder of a U.S. corporation under applicable U.S. federal and state laws. Under Belgian corporate law, other than certain information that we must make public and except in certain limited circumstances, our shareholders may not ask for an
inspection of our corporate records, while under Delaware corporate law any shareholder, irrespective of the size of its shareholdings, may do so. Shareholders of a Belgian corporation have more limited rights to initiate a derivative action, a
remedy typically available to shareholders of U.S. companies, in order to enforce a right of our Company, in case we fail to enforce such right ourselves.

A liability action can be instituted for our account by one or more of our shareholders who, individually or together, hold securities representing at least
1.0% of the votes or a part of the capital worth at least 1.25 million and have not approved of the discharge from liability that was granted to the directors. If the court orders the directors to pay damages, they are due to us, though
the amounts advanced by the minority shareholders (for example attorneys fees) are to be reimbursed by us. If the action is disallowed, the minority shareholders may be ordered to pay the costs, and, should there be grounds therefor, to pay
damages to the directors, for example for having conducted provocative and reckless legal proceedings.



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In addition, a majority of our shareholders present or represented at our meeting of shareholders may release a
director from any claim of liability we may have, provided that the financial position of the company is accurately reflected in the annual accounts. This includes a release from liability for any acts of the directors beyond their statutory powers
or in breach of the Belgian Company Code, provided that the relevant acts were specifically mentioned in the convening notice to the meeting of shareholders deliberating on the discharge. In contrast, most U.S. federal and state laws prohibit a
company or its shareholders from releasing a director from liability altogether if he or she has acted in bad faith or has breached his or her duty of loyalty to the company. Finally, Belgian corporate law does not provide any form of appraisal
rights in the case of a business combination. As a result of these differences between Belgian corporate law and our articles of association, on the one hand, and the U.S. federal and state laws, on the other hand, in certain instances, you could
receive less protection as an ADS holder of our company than you would as a shareholder of a listed U.S. company.

Takeover provisions in the
national law of Belgium may make a takeover difficult.

Public takeover bids on our shares and other voting securities, such as warrants or
convertible bonds, if any, are subject to the Belgian Act of April 1, 2007 on public takeover bids, as amended and implemented by the Belgian Royal Decree of April 27, 2007, or Royal Decree, and to the supervision by the Belgian Financial
Services and Markets Authority, or FSMA. Public takeover bids must be made for all of our voting securities, as well as for all other securities that entitle the holders thereof to the subscription to, the acquisition of or the conversion into
voting securities. Prior to making a bid, a bidder must issue and disseminate a prospectus, which must be approved by the FSMA. The bidder must also obtain approval of the relevant competition authorities, where such approval is legally required for
the acquisition of our company. The Belgian Act of April 1, 2007 provides that a mandatory bid will be required to be launched for all of our outstanding shares and securities giving access to ordinary shares if a person, as a result of its own
acquisition or the acquisition by persons acting in concert with it or by persons acting on their account, directly or indirectly holds more than 30% of the voting securities in a company that has its registered office in Belgium and of which at
least part of the voting securities are traded on a regulated market or on a multilateral trading facility designated by the Royal Decree. The mere fact of exceeding the relevant threshold through the acquisition of one or more shares will give rise
to a mandatory bid, irrespective of whether or not the price paid in the relevant transaction exceeds the current market price.

There are several
provisions of Belgian company law and certain other provisions of Belgian law, such as the obligation to disclose important shareholdings and merger control, that may apply to us and which may make an unfriendly tender offer, merger, change in
management or other change in control, more difficult. These provisions could discourage potential takeover attempts that third parties may consider and thus deprive the shareholders of the opportunity to sell their shares at a premium (which is
typically offered in the framework of a takeover bid).

Holders of ADSs do not have the same voting rights as holders of our ordinary
shares.

Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the
provisions of the deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our ordinary shares, the depositary will fix a record date for the determination of ADS holders who shall be entitled to
give instructions for the exercise of voting rights. Upon timely receipt of notice from us, if we so request, the depositary shall distribute to the holders as of the record date (1) the notice of the meeting or solicitation of consent or proxy
sent by us and (2) a statement as to the manner in which instructions may be given by the holders. You may instruct the depositary of your ADSs to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able to exercise your
right to vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may not know about the meeting far enough in advance to withdraw those ordinary shares. We cannot guarantee you that you will receive the voting
materials in time to ensure that you can instruct the depositary to vote your ordinary shares or to withdraw your ordinary shares so that you can vote them yourself. In addition, the depositary and its agents are not responsible for failing to carry
out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote, and there may be nothing you can do if the ordinary shares underlying your ADSs are not voted as you
requested.



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Holders of ADSs may be subject to limitations on the transfer of their ADSs and the withdrawal of the
underlying ordinary shares.

ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from
time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of your ADSs generally when our books or the books of the depositary are closed, or at any
time if we or the depositary think it is advisable to do so because of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for any other reason, subject to your right to cancel your ADSs and
withdraw the underlying ordinary shares. Temporary delays in the cancellation of your ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the
transfer of ordinary shares is blocked to permit voting at a shareholders meeting or we are paying a dividend on our ordinary shares.

In addition,
you may not be able to cancel your ADSs and withdraw the underlying ordinary shares when you owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations
that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities.

We are an emerging growth company and are
availing ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make the ADSs or the ordinary shares less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot
predict if investors will find the ADSs or the ordinary shares less attractive because we may rely on these exemptions. If some investors find the ADSs or the ordinary shares less attractive as a result, there may be a less active trading market for
the ADSs or the ordinary shares and the price of the ADSs or the ordinary shares may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We would cease to be an emerging growth
company upon the earliest to occur of (1) the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; (2) the date we qualify as a large accelerated filer, with at least $700 million of
equity securities held by non-affiliates; (3) the issuance, in any three-year period, by our company of more than $1.0 billion in non-convertible debt
securities held by non-affiliates; and (4) December 31, 2020. We may choose to take advantage of some but not all of these exemptions.

Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company which would allow us to take
advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding
executive compensation. We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading
market for our ordinary shares and our share price may be more volatile.

As a foreign private issuer, we are exempt from a number of rules under
the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of ADSs or ordinary shares.

We are a foreign private issuer, as defined in the SECs rules and regulations and, consequently, we are not subject to all of the disclosure
requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act, that regulate disclosure obligations and procedural requirements related to the solicitation of
proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. In addition, our officers and directors are exempt from the reporting and
short-swing profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, while we currently make annual and semi-annual filings with respect to
our listing on Euronext Brussels and Euronext Paris, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. domestic issuers and will not be required to file quarterly reports on
Form 10-Q or current reports on Form 8-K under the Exchange Act. Accordingly, there will be less publicly available information concerning our company than there would
be if we were not a foreign private issuer.



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As a foreign private issuer, we are permitted to adopt certain home country practices in relation to
corporate governance matters that differ significantly from NASDAQ corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing
standards.

As a foreign private issuer listed on NASDAQ, we are subject to corporate governance listing standards. However, rules permit a
foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in Belgium, which is our home country, may differ significantly from corporate governance listing standards. For
example, neither the corporate laws of Belgium nor our articles of association require a majority of our directors to be independent and we could include non-independent directors as members of our Nomination
and Remuneration Committee, and our independent directors would not necessarily hold regularly scheduled meetings at which only independent directors are present. Currently, we intend to follow home country practice to the maximum extent possible.
Therefore, our shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers.

We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.

While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of an
issuers most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2017. In the future, we would lose our foreign private issuer status if we to fail to meet the
requirements necessary to maintain our foreign private issuer status as of the relevant determination date. For example, if more than 50% of our securities are held by U.S. residents and more than 50% of the members of our executive management team
or members of our board of directors are residents or citizens of the United States, we could lose our foreign private issuer status.

The regulatory and
compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly more than costs we incur as a foreign private issuer. If we are not a foreign private issuer, we will be required to file periodic reports and
registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required under current SEC rules to prepare our financial
statements in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, rather than IFRS, and modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers. Such conversion of
our financial statements to U.S. GAAP will involve significant time and cost. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private
issuers such as the ones described above and exemptions from procedural requirements related to the solicitation of proxies.

It may be
difficult for investors outside Belgium to serve process on, or enforce foreign judgments against, us or our directors and senior management.

We are a Belgian public limited liability company. Less than a majority of the members of our board of directors and members of our executive management team
are residents of the United States. All or a substantial portion of the assets of such non-resident persons and most of our assets are located outside the United States. As a result, it may not be possible for
investors to effect service of process upon such persons or on us or to enforce against them or us a judgment obtained in U.S. courts. Original actions or actions for the enforcement of judgments of U.S. courts relating to the civil liability
provisions of the federal or state securities laws of the United States are not directly enforceable in Belgium.

The United States and Belgium do not
currently have a multilateral or bilateral treaty providing for reciprocal recognition and enforcement of judgments, other than arbitral awards, in civil and commercial matters. In order for a final judgment for the payment of money rendered by U.S.
courts based on civil liability to produce any effect on Belgian soil, it is accordingly required that this judgment be recognized or be declared enforceable by a Belgian court in accordance with Articles 22 to 25 of the 2004 Belgian Code of Private
International Law. Recognition or enforcement does not imply a review of the merits of the case and is irrespective of any reciprocity requirement. A U.S. judgment will, however, not be recognized or declared enforceable in Belgium if it infringes
upon one or more of the grounds for refusal that are exhaustively listed in Article 25 of the Belgian Code of Private International Law. Actions for the enforcement of judgments of U.S. courts might be successful only if the Belgian court confirms
the substantive correctness of the judgment of the U.S. court and is satisfied that:



| |  |  | the effect of the enforcement judgment is not manifestly incompatible with Belgian public policy;
| | - |  | -------------------------------------------------------------------------------------------------



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| |  |  | the judgment did not violate the rights of the defendant;
| | - |  | ---------------------------------------------------------



| |  |  | the judgment was not rendered in a matter where the parties transferred rights subject to transfer restrictions with the sole purpose of avoiding the application of the law applicable according to Belgian international
private law;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the judgment is not subject to further recourse under U.S. law;
| | - |  | ---------------------------------------------------------------



| |  |  | the judgment is not compatible with a judgment rendered in Belgium or with a subsequent judgment rendered abroad that might be recognized in Belgium;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a claim was not filed outside Belgium after the same claim was filed in Belgium, while the claim filed in Belgium is still pending;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Belgian courts did not have exclusive jurisdiction to rule on the matter;
| | - |  | -----------------------------------------------------------------------------



| |  |  | the U.S. court did not accept its jurisdiction solely on the basis of either the nationality of the plaintiff or the location of the disputed goods; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the judgment submitted to the Belgian court is authentic.
| | - |  | ---------------------------------------------------------

In addition to recognition or enforcement, a
judgment by a federal or state court in the United States against us may also serve as evidence in a similar action in a Belgian court if it meets the conditions required for the authenticity of judgments according to the law of the state where it
was rendered. The findings of a federal or state court in the United States will not, however, be taken into account to the extent they appear incompatible with Belgian public policy.

We may be subject at an increased risk of securities class action litigation.

Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk
is especially relevant for us because biotechnology and biopharmaceutical companies have experienced significant share price volatility in recent years. If we were to be sued, it could result in substantial costs and a diversion of managements
attention and resources, which could harm our business.



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ITEM 4 INFORMATION ON THE COMPANY

A. History And Development Of The Company

Our legal and commercial name is Celyad SA. Prior to May 5, 2015, our corporate name was Cardio3 Biosciences SA. We are a limited liability company
incorporated in the form of a naamloze vennootschap/société anonyme under Belgian law. We are registered with the Register of Legal Entities (RPM Nivelles) under the enterprise number 891.118.115. We were incorporated in Belgium
on July 24, 2007 for an unlimited duration. Our fiscal year ends December 31.

Our principal executive and registered offices are located at rue
Edouard Belin 2, 1435 Mont-Saint-Guibert, Belgium and our telephone number is +32 10 394 100. Our agent for service of process in the United States is CT Corporation System. We also maintain a website at www.celyad.com. The reference to our website
is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this Annual Report.

Our actual capital expenditures for the years ended December 31, 2014,2015 and 2016 amounted to 0.6 million, 0.8 million and
1.8 million, respectively. These capital expenditures primarily consisted of the acquisition of laboratory equipment and industrial tools, the refurbishment of our research and development laboratories and leasehold improvements of our
corporate offices located in Belgium and the United States. We expect our capital expenditures to increase in absolute terms in the near term as we continue to advance our research and development programs and grow our operations. We anticipate our
capital expenditure in 2017 to be financed mostly from finance leases and partly with proceeds of our global offering.

B.
Business Overview

Overview

We are a leader in
engineered cell therapy treatments with clinical programs currently targeting indications in immune-oncology.

Our lead product candidate in oncology is CAR-T NKR-2, an autologous chimeric antigen receptor, or CAR, using NKG2D, an activating receptor of Natural Killer, or NK, cells transduced on
T-lymphocytes. We successfully completed in 2016 our first clinical trial for this product candidate, called the CM-CS1 trial. The
CM-CS1 trial was a Phase 1 dose escalation study that was conducted at the Dana Farber Cancer Institute in Boston, Massachusetts. It enrolled patients with refractory or relapsed acute myeloid leukemia, or
AML, or multiple myeloma, or MM. The outcome of the CM-CS1 trial was presented at the 2016 American Society of Hematology, or ASH, Annual Meeting in December 2016. No treatment-related safety concerns were
reported at the four doses tested. First signals of activity were also identified and reported.

In December 2016, a second Phase 1 clinical trial was
initiated. The THINK trial (THerapeutic Immunotherapy with CAR-T NKR-2) is a multinational (EU/US) open-label Phase 1b trial to assess the safety and clinical activity
of multiple administrations of autologous CAR-T NKR-2 cells in seven refractory cancers, including five solid tumors (colorectal, ovarian, bladder, triple-negative
breast and pancreatic cancers) and two hematological tumors (AML and MM). The THINK trial will test three dose levels adjusted to body weight: up to 3x108, 1x109 and 3x109CAR-T NKR-2 cells. At each dose, the patients will
receive three successive administrations, two weeks apart, of CAR-T NKR-2 cells. The dose escalation part of the study will enroll up to 24 patients while the extension
phase would enroll 86 additional patients. The dose escalation part is expected to be completed in the last quarter of 2017.

In July 2016, we announced
the signing of an exclusive licensing agreement with the Japanese immuno-oncology company ONO Pharmaceutical Co. Ltd., or ONO, for the development and commercialization of our allogeneic CAR-T NKR-2 immunotherapy. The license agreement with ONO grants them the exclusive right to develop and commercialize our allogeneic CAR-T
NKR-2 T-Cell immunotherapy in Japan, Korea and Taiwan. In exchange for receiving a license in these countries, ONO will pay us up to $311.5 million in development
and commercial milestones, including an upfront payment of $12.5 million plus double digit royalties on net sales in ONO territories.

Our lead drug
product candidate in cardiovascular disease is called C-Cure, an autologous cell therapy for the treatment of patients with ischemic heart failure, or HF. C-Cure was
evaluated in CHART-1, a Phase 3 trial conducted in Europe and Israel with 290 patients suffering from advanced ischemic HF. Topline results from the CHART-1 trial were
reported in June 2016. Results indicated that the trial was overall neutral but with a positive trend, consistent across all parameters tested. Although the primary endpoint of the randomized trial was not met among the entire CHART-1 patient population, a significant



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subpopulation representing more than 60% of the overall trial patients, defined by their Left Ventricular End Diastolic Volume, did meet the trial primary endpoint with a P value of 0.015. Based
on the results of the CHART-1 trial, a U.S. trial, or CHART-2, has been designed to exclusively enroll the subset of patients that met the primary endpoint of the CHART-1 trial. We are currently seeking partners to further develop and commercialize C-Cure.

Strategy

Our goal is to become a leader in CAR-T cell therapies dedicated to the treatment of cancer. The key elements of this strategy are as follows:



| |  |  | Rapidly advanceCAR-T NKR-2 clinical development for the treatment of hematological and solid indications targeted in
our THINK trial. We are currently enrolling patients with refractory or relapsed AML, MM, colorectal, bladder, ovarian, pancreatic and triple negative breast cancers in a Phase 1b clinical trial of
CAR-T NKR-2 in Belgium and in the United States. We intend to progress CAR-T NKR-2 in
further stages of development in the indications that demonstrate clinical activity.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Explore the potentially synergistic effect of the combination of CAR-T NKR-2 with standard chemotherapy in first or
second line metastatic colorectal cancer patients. We believe there is an opportunity to study the properties of increased ligand expression in tumor cells exposed to aggressive chemotherapy regime, with the administration of CAR-T NKR-2 in between the chemotherapy cycles.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Explore the potential of CAR-T NKR-2 administered loco regionally.We believe there is an opportunity to study the safety and
effectiveness of administration of CAR-T NKR-2 in the liver in colorectal cancer patients with liver metastasis.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Develop our allogeneic CAR-T NKR-2 clinical program. We are developing a proprietary approach to inhibit T-cell receptor, or TCR, expression in CAR-T cells that allows us to use donor cells as opposed to the patients own T lymphocytes, which may make the administration of CAR-T therapies feasible in patients lacking sufficient T lymphocytes, and, potentially, provide an approach to the administration of CAR-T cells in certain conditions where
the resident immune system can be temporarily inhibited.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Make manufacturing and logistics of autologous CAR-T therapies feasible to address large indications. While current autologous approaches may be suited for
relatively small indications, and allogeneic approaches have yet to demonstrate their equivalent effectiveness in non-hematological malignancies, we believe it is important to find manufacturing and supply
chain solutions that allow the administration of CAR-T cells in large indications feasible, cost effective and safe. Building on our experience in autologous cell therapy from our C-Cure program, we, with external partners, are developing a fully automated point of care manufacturing solution that will may provide a paradigm shift in the field of autologous cell therapy.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Leverage our expertise and knowledge of engineered-cell therapies to expand our NKR-T cell therapy drug product candidate pipeline. In addition, we are continuing
preclinical studies of our other preclinical product candidates, including NKp30, which is another activating receptor of NK cells, and B7H6, which is a NKp30 ligand expressed on cancer cells. We expect that B7H6 will enter clinical development in
2018 for the treatment of a pediatric rare and serious malignancy neuroblastoma.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Find a partner to continue the development of our cardiovascular assets, in particular C-Cure. Based on the results from our previous trials, we believe that C-Cure is a promising candidate for the treatment of ischemic HF. We are actively seeking a partner that could leverage that data and conduct CHART-2 for registration of C-Cure in the United States and in Europe.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Drug product candidates

We currently hold worldwide rights to develop and commercialize all of our drug product candidates.

Our most advanced product candidates are autologous cell therapy treatments. In autologous procedures, a patients cells are harvested, selected,
reprogrammed and expanded, and then infused back into the same patient. A benefit of autologous therapies is that autologous cells are not recognized as foreign by patients immune systems. We believe that we are well positionned to effectively
advance autologous cell therapy treatments for cancer and other indications as a result of the expertise and know-how that we have acquired through our development of
C-Cure.



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Oncology



LOGO

Cancer is the second leading cause of death in the United States after cardiovascular diseases, according to the U.S.
Centers for Disease Control and Prevention. According to the American Cancer Society, in 2014, there were an estimated 1.6 million new cancer cases diagnosed and over 550,000 cancer deaths in the United States alone. In the past decades, the
cornerstones of cancer therapies have been surgery, chemotherapy and radiation therapy. Since 2001, molecules that specifically target cancer cells have emerged as standard treatments for a number of cancers. For example, Gleevec is marketed by
Novartis AG for the treatment of leukemia, and Herceptin is marketed by Genentech, Inc. for the treatment of breast and gastric cancer. Although targeted therapies have significantly improved the outcomes for certain patients with these cancers,
there is still a high unmet need for the treatment of these and many other cancers.

Below are the statistics regarding certain forms of solid and
hematological cancers and their estimated death rates in the United States for 2017:



|                              |  |                           |         |  |        |  |         | 
|----------------------------- |  | ------------------------- | ------- |  | ------ |  | ------- | 
|                              |  | 2017 estimates for the US |        
|                              |  | New cases                 |         |  | Deaths | 
|Acute myeloid leukemia        |  |                           | 21,380  |  |        |  | 11,960  | 
|Multiple myeloma              |  |                           | 30,280  |  |        |  | 12,790  | 
|Colorectal cancer             |  |                           | 135,430 |  |        |  | 50,260  | 
|Pancreatic cancer             |  |                           | 53,670  |  |        |  | 43,090  | 
|Urinary bladder cancer        |  |                           | 79,030  |  |        |  | 16,870  | 
|Ovary cancer                  |  |                           | 22,440  |  |        |  | 14,080  | 
|Triple negative breast cancer |  |                           | 30,620  |  |        |  | >>4,900 | 

Source: SEER, American Cancer Society

CAR T-Cell Therapy

The immune system has a natural response to cancer, as cancer cells express antigens that can be recognized by cells of the immune system. Upon recognition of
a cancer antigen, activated T-cells release substances that kill cancer cells and attract other immune cells to assist in the killing process. However, cancer cells can develop the ability to release
inhibitory factors that allow them to evade immune response, resulting in the formation of cancers.



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CAR T-cell therapy is a new technology that broadly involves engineering
patients own T-cells to express CARs so that these re-engineered cells recognize and kill cancer cells, overcoming cancer cells ability to evade the immune
response. CARs are comprised of the following elements:



| |  |  | binding domains that encode proteins, such as variable fragments of antibodies that are expressed on the surface of a T-cell and allow the
T-cell to recognize specific antigens on cancer cells;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | intracellular signaling domains derived from T-cell receptors that activate the signaling pathways responsible for the immune response following binding to cancer cells. This
allows the T cell to trigger the killing activity of the target cancer cell once it is recognized; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | costimulatory and adaptor domains, which enhance the effectiveness of the T-cells in their immune response.
| | - |  | -----------------------------------------------------------------------------------------------------------

Once activated, CAR T-cells proliferate and kill cancer cells directly through the secretion of cytotoxins that
destroy cancer cells, and these cytokines attract other immune cells to the tumor site to assist in the killing process.

The CAR T-cell manufacturing process starts with collecting cells from a patients blood. T-cells are then selected, following which the CAR is introduced into the T-cells using vectors. The CAR T-cells are then expanded prior to injection back into the patient.

Current Investigational Treatments of Cancer using CAR T-Cells

CAR-T cell therapy is an emerging approach for the treatment of some cancers, such as
B-cell malignancies.

CAR CD19 is the most studied CAR. CAR CD19 has an antigen binding domain that recognizes the
CD19 antigen that is present on all B lymphocytes. This means that if a cancer originates from B lymphocytes, such as Acute Lymphoblastic Leukemia (ALL), then a CAR bearing the CD19 antibody could potentially recognize it and destroy it. Indeed,
results of a clinical trial reported in the New England Journal of Medicine in October 2014 demonstrated that CAR CD19 CAR therapy was effective in treating patients with relapsed and refractory ALL. Treatment was associated with a complete
remission rate of 90% and sustained remissions of up to two year after treatment. Despite its promise, CAR CD19 therapy is inherently limited to the treatment of B-cell malignancies. CAR CD19 also targets
normal B lymphocytes leading to the need to treat those patients with gamma globulins.

Our Approach to CAR
T-Cell Therapy

Our approach to CAR-T cell therapy has the potential to
treat a broader range of cancers than CD19 CARs as we employ natural receptors that target multiple ligands, and not just CD 19. Our most advanced CAR technologies use activating receptors of NK cells, which are lymphocytes of the innate immune
system that kill diseased cells directly and indirectly, by secreting cytokines that attract other immune cells to assist in the killing process. The receptors of NK cells used in our therapies target the ligands that are activated in cancer cells,
but are absent or expressed at very low levels in normal cells.

CAR-T
NKR-2

Our lead CAR-T NKR-T
cell drug product candidate is CAR-T NKR-2. CAR-T NKR-2 uses the native sequence of NKG2D
in the CAR construct. In CAR-T NKR-2, the human natural sequence of NKG2D is expressed outside the T lymphocyte and bound to an intra cellular domain called CD3 Zeta.
This intracellular domain is the same as the one used in other CARs and is responsible for the activation of the T-cell once NKG2D recognizes and binds to its target. In addition, the complex NKG2D CD3 Zeta
binds to DAP 10 which is a co-stimulatory molecule present on T-cells, which means that the activation triggered by the primary stimulatory chain CD3 Zeta is further
strengthened by DAP 10, a secondary or co-stimulatory domain.

Ligands for the NKG2D receptor are expressed at the
surface of cancer cells, allowing for the targeting of multiple tumor types. NKG2D receptor ligands, such as ULBP1-6, MICA and MICB, are expressed in numerous solid tumors and blood cancers, including ovarian,
bladder, breast, lung and liver cancers, as well as leukemia, lymphoma and myeloma. Within a given cell population, we have observed in vitro effectiveness of CAR-T
NKR-2 even when as few as 7% of the cancer cells expressed a NKG2D receptor ligand.



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Preclinical Development

CAR-T NKR-2 has been tested in preclinical models of solid and blood cancers,
including lymphoma, ovarian cancer, melanoma and myeloma. In preclinical studies, treatment with CAR-T NKR-2 significantly increased survival. In studies, 100% of
treated mice survived through the follow-up period of the applicable study, which in one study was 325 days. All untreated mice died during the follow-up period of the
applicable study.

In one representative study, as shown in the figure below, the treatment with CAR-T NKR-2 completely prevented tumor development in mice injected with ovarian cancer cells and followed over a period of 225 days. In contrast, all mice injected with ovarian cancer cells that were treated with
unmodified T-cells developed cancerous tumors and died during that period.

Our lead CAR-T NKR-T cell drug product candidate is CAR-T NKR-2.
CAR-T NKR-2 uses the native sequence of NKG2D in the CAR construct. In CAR-T NKR-2, the
human natural sequence of NKG2D is expressed outside the T lymphocyte and bound to an intra cellular domain called CD3 Zeta. This intracellular domain is the same as the one used in other CAR and is responsible for the activation of the T cell once
NKG2D recognizes and binds to its target. In addition, the complex NKG2D CD3 Zeta binds to DAP 10 which is a co stimulatory molecule present on T cell, which means that the activation triggered by the primary stimulatory chain CD3 Zeta is further
strengthened by DAP 10 a secondary or co stimulatory domain.

Ligands for the NKG2D receptor are expressed at the surface of cancer cells, allowing for
the targeting of multiple tumor types. NKG2D receptor ligands, such as ULBP1-6, MICA and MICB, are expressed in numerous solid tumors and blood cancers, including ovarian, bladder, breast, lung and liver
cancers, as well as leukemia, lymphoma and myeloma. Within a given cell population, we have shown in vitro effectiveness of NKR-2 even when as few as 7% of the cancer cells expressed a NKG2D receptor
ligand.

Preclinical Development

CAR-T NKR-2 has been tested in preclinical models of solid and blood cancers, including lymphoma, ovarian cancer, melanoma and myeloma. In preclinical studies, treatment with NKR-2 significantly increased survival. In studies, 100% of treated mice survived through the follow-up period of the applicable study, which in one study was 325 days. All
untreated mice died during the follow-up period of the applicable study.

In one representative study, as shown in
the figure below, the treatment with NKR-2 completely prevented tumor development in mice injected with ovarian cancer cells and followed over a period of 225 days. In contrast, all mice injected with ovarian
cancer cells that were treated with unmodified T-cells developed cancerous tumors and died during that period.



LOGO

Our preclinical models have shown that administration of CAR-T NKR-2 is followed by changes in a tumors micro-environment resulting from the local release of chemokines, a family of small cytokines.

In a preclinical study, mice that had been injected with 5T33MM cancer cells (a myeloma cancer) and treated with CAR-T
NKR-2 were rechallenged, either with the 5T33MM cancer cells or a different tumor type (RMA lymphoma cells). The mice that were rechallenged with the same tumor type survived, while the mice that were
challenged with a different tumor type died, as shown in the figure below. Of note, at the time of the re-challenge of the surviving animals, no CAR-T NKR-2 were detected in the animals, hence the protection against the original tumor is linked to an adaptive immunity mechanism.



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LOGO

We do not believe that this effect has been observed with other CARs.

Moreover, preclinical studies have suggested that CART-T NKR-2 could
potentially have a direct effect on tumor vasculature. Tumor vessels express ligands for the NKG2D receptor that are not generally expressed by normal vessels. We believe that this expression may be linked to genotoxic stress, hypoxia and re-oxygenation in tumors and therefore that CART-T NKR-2 could potentially inhibit tumor growth by decreasing tumor vasculature, which
enhances the activity through a virtuous circle of anoxia of tumor cells and increased ligand expression of tumor cells.

Preclinical studies also suggest
that CART-T NKR-2 is active without lymphodepletion conditioning, which is the destruction of lymphocytes and T-cells, normally
by radiation. We believe this absence of a pre-conditioning regimen may significantly expand the range of patients eligible for CAR T-cell treatment, reduce costs,
reduce toxicity and thereby improve patient experience and acceptance.

No significant toxicology findings were reported from preclinical multiple-dose
studies at dose levels below 107CART-T NKR-2 per animal. Some temporary weight loss was noted in animals treated
with CART-T NKR-2 at doses of 2x107 per animal, a dose practically unattainable in human equivalents.

Clinical Development

CM-CS1 Phase 1a trial

On June 9, 2014, we filed an IND with the FDA in order to conduct a clinical trial for our CAR-T NKR-2 product candidate. This trial was called CM-CS1. The purpose of the trial was to evaluate the safety and feasibility of administering a single intravenous dose of CAR-T NKR-2 to patients with AML and MM. The trial was designed to start at low doses in order to evaluate the potential on target/off tumor toxicity, meaning the
undue targeting of healthy tissues.

All patients enrolled in the CM-CS1 trial were patients with (i) AML who
are not in remission and for which standard therapy options are not available or (ii) relapsed or refractory progressive MM. All patients received a single-dose intravenous administration of CAR-T NKR-2 T-cells without prior lymphodepletion conditioning. CM-CS1 was a dose escalation trial to test four different dose levels.
Patients received doses from 1×106 up to 3×107CAR-T
NKR-2 in a single intravenous injection. For each dose level, three patients, one with AML, one with MM, and one with either AML or MM, were recruited.

This trial was conducted at the Dana Farber Cancer Institute in the United States. The outcome of the trial was:



| |  | Among AML/MDS and MM patients, a single dose of CAR-T NKR-2 cells without lymphodepletion was feasible and well tolerated without dose
limiting toxicities, or DLTs, over a range of 1×106 to 3×107 T cells.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Cases of unexpected survival and/or improvement in hematologic parameters were noted in both AML and MM patients, some with and some without subsequent therapy.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | NKG2D CAR-T-specific activity against autologous tumor-containing cells was observed in vitro in the patients
tested.
|- |  | ---------------------------------------------------------------------------------------------------------------------

The CMCS-1 trial results that were presented at ASH in December 2016 and paved the way for
studies of multiple infusions and higher doses of CAR-T NKR-2 cells, closer to a potential therapeutic range, in numerous malignancies.



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THINK Phase 1b Trial

In December 2016, we initiated THINK, a second clinical trial with our CAR-T
NKR-2 product candidate.

THINK (THerapeutic Immunotherapy
with NKr-2) is a multinational (EU/US) open-label Phase Ib study to assess the safety and clinical activity of multiple administrations of autologous CAR-T NKR-2 cells in seven cancers, including five solid tumors (colorectal, ovarian, bladder, triple-negative breast and pancreatic cancers) and two hematological tumors (acute myeloid leukemia and multiple myeloma) in
patients who did not respond to or relapsed after first line therapies.

The trial will test three dose levels adjusted to body weight: up to 3x108, 1x109 and 3x109CAR-T
NKR-2 cells. At each dose, the patients will receive three successive administrations of the specified dose, two weeks apart. The dose escalation part of the study will enroll up to 24 patients while the
extension phase is planned to enroll a maximum of 86 additional patients.

Other CAR T-Cell Development

Additional Autologous Programs

We also have two
additional autologous NKR-T cells programs that are in preclinical development. One program involves the use of a NKR-T expressing NKp30, another activated receptor of
NK cells. NKR-T cells expressing NKp30 target ligands, which are expressed on many types of cancer cells, including lymphoma, leukemia and gastrointestional stromal tumors. The primary ligand of NKp30 is B7H6.
Previous preclinical studies performed at Dartmouth College and reported in the Journal of Immunology in 2012 demonstrated that NKR-T cells expressing NKp30 were able to kill cancer cells expressing NKp30
ligands both in vitro and in vivo. Another program involves the specific targeting of B7H6 to kill cancer cells that express B7H6. This program is a more canonical CAR using B7H6 as a single chain variable fragement antibody associated with primary
CD3 Zeta and co-stimulatory CD 28 domains, and with the lymphodepletion to allow in vivo proliferation. Previous preclinical studies performed at Dartmouth College and reported in the Journal of Immunology in
2015 demonstrated that therapy targeting B7H6 decreased tumor burden of melanoma- and ovarian cancer-bearing mice. We intend to initiate clinical development of CAR-T B7H6 in Neuroblastoma, a devastating
pediatric malignancy, in early 2018.

Allogeneic Platform

Autologous CAR-T cells have yielded impressive results in B cell malignancies. B cell malignancies represent a small
proportion of cancer patients. Addressing larger indications such as some solid tumors make autologous treatments using the current centralized manufacturing paradigm a challenging option both from a cost and logistical perspectives. Finding
alternative approaches for addressing those high unmet medical needs is therefore of paramount importance. An allogeneic approach must deal with two issues, one related to the rejection of the patient tissues by the grafted cells, ie, the graft
versus host disease, or GvHD, and another related to the rejection of the graft by the host immune system, the Transplant Rejection. A truly off the shelf approach must deal with those two issues. We are developing an allogeneic approach that may
render some of those challenges more addressable. We have developed a mechanism to prevent the GvHD by silencing the T-Cell Receptor, or TCR, complex on T Lymphocytes. This silencing suppresses the GvHD. In
hematological malignancies using the canonical CAR-T cells, lymphodepletion is used which reduces or eliminates transplant rejection during the time the transplant is alive and the patients immune system
is dampened. While this may indeed be feasible in this setting, expanding this to other type of cancers requires other approaches that we are currently investigating. We hope to enter clinical development of our allogeneic program beginning of 2018.



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Comparison of our NKR-T cell therapy approach to canonical CAR
Therapy.



LOGO

Cardiovascular Diseases

Cardiovascular diseases, which are diseases of the heart and blood vessels, are the largest cause of mortality in the world and, in 2012, approximately 31% of
all global deaths were attributable to cardiovascular diseases, according to the World Health Organization. A subset of cardiovascular diseases, cardiac diseases, which are diseases of the heart, represent the single largest cause of death in the
cardiovascular diseases population, according to the American Heart Association. If left untreated, cardiac diseases can lead to heart failure, or HF, a condition in which the heart is unable to pump enough blood to meet the bodys metabolic
needs.

Current Treatments of Heart Failure

Although
existing therapies have been somewhat effective in the treatment of HF, there is still great unmet medical need. In particular, in the case of ischemic HF, which is caused by insufficient oxygen to the heart, current treatments fail to address the
decrease in the number of functional myocytes in the heart that result from this lack of oxygen. Over time this functional decrease modifies the dynamics of cardiac contractions leading to tissue remodeling and loss of cardiac function. We believe
that cellular therapies have the potential to repair or replace the non-functioning myocytes of ischemic HF patients.

C-Cure

Our drug
product candidate, C-Cure, is an autologous cell therapy that we believe has the potential to treat moderate to severe HF. We have developed C-Cure based predominantly
on technology that we licensed from the Mayo Clinic.

To guide cardiac tissue formation, our C-Cure therapy
reprograms multipotent stem cells harvested from a patients bone marrow into cardio reparative cells using naturally occurring cytokines and growth factors that mimic the signaling that occurs in embryonic heart tissue development. In the C-Cure process, stem cells are collected from an ischemic HF patient through bone marrow aspiration. The stem cells are then harvested, selected, expanded and differentiated into cardio reparative cells at our
manufacturing facility, yielding a homogeneous and pure cell population. The cells are then re-injected into the heart of the ischemic HF patient with our C-Cathezcell injection catheter.



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Clinical Development Status

CHART-1

CHART-1 has been conducted in Europe and Israel and was first authorized in November 2012. CHART-1 is a 290-patient prospective
controlled randomized double-blinded trial, including NYHA Class III and IV ischemic HF patients. The primary endpoint of this trial is an improvement in the composite hierarchical endpoint using the Finkelstein-Schoenfeld statistical method.
The elements of this endpoint are, in hierarchical order, mortality, morbidity, quality of life, six minutes walk distance test, left ventricular end systolic volume (LVESV) and left ventricular ejection fraction (LVEF). Each patient in the C-Cure treatment group will be compared to each patient in the control group and a comprehensive score will be derived to compare one group against the other.

Outcome of CHART-1

The CHART-1 trial is the largest cardiovascular regenerative medicine trial to date addressing the effect of
cardiopoiesis-based cell therapy in ischemic HF patients with moderate to severe symptoms. In this at-risk population with limited therapeutic options, the trial was neutral regarding the primary endpoint, a
hierarchical composite encompassing all-cause mortality, worsening heart failure events, Minnesota Living with Heart Failure Questionnaire score, 6-min walk distance,
LVESV and LVEF assessed at 39 weeks. Exploration of the primary composite endpoint according to baseline heart failure severity revealed a clinically relevant population that appeared to benefit from cardiopoietic cell therapy and in which the
primary endpoint was met (p=0.015). This sizable target population (the responder population), representing 60% of the whole study cohort, was characterized by severe heart enlargement (baseline LVEDV 200370 mL). Patients displaying a lower
(< 200 mL) or greater (> 370 mL) LVEDV did not appear to respond to cell therapy in this study. We aim to confirm the present findings in subsequent studies with broader representation of women and
non-Caucasian racial groups.

CHART-2

On January 27, 2012, we filed our Investigational New Drug Application, or IND, for the use of C-Cure in CHART-2 with the FDA (NCT02317458). The purpose of the IND trial is to evaluate the efficacy and safety of bone marrow-derived mesenchymal cardiopoietic cells for improving exercise capacity in subjects with
advanced chronic ischemic HF. CHART-2 is expected to be conducted in the United States and Europe. CHART-2 has subsequently been amended and is currently a 400-patient prospective controlled randomized double-blinded trial, for which the patient population is limited to the responder population identified in CHART-1. The primary
efficacy endpoint of CHART-2 is the change in Mortality, Worsening Heart Failure Event and Quality of Life from pre-procedure to 12 months. We are looking for a partner
to run CHART-2 and continue the regulatory and commercial development of C-Cure.

Our Complementary Devices

We developed C-Cathez, which is CE-marked, with the goal of overcoming limitations of existing cell injection devices that we
discovered during our development of C-Cure. Due to continuous heart movements, we believe that injecting cells into the heart requires a stable needle that anchors into the tissue during injection. In
addition, excess pressure on cells during injection has an adverse impact on cell retention. To respond to these challenges, C-Cathez features a curved
needle that provides stability during the injection and multiple holes along the needle that increase the exit surface, reducing the pressure exerted on cells during the injection procedure. In preclinical studies, we obtained a higher retention
rate of injected cells through the use of C-Cathez as compared to other commercially available catheters. In a preclinical study of C-Cathez, use of C-Cathez did not cause myocardial perforation
or clinically relevant increases in the blood levels of cardiac enzymes were observed in pigs or dogs. We also market C Cathez in the European Union as a stand-alone medical device for delivery
of diagnostic and therapeutic agents indicated for delivery into the heart to research laboratories and clinical-stage companies only.

In addition, we
believe our heart access technology will enable cardiologists to take a unique access route directly to the patients left atrium, which may potentially enable the deployment of catheters or other necessary instruments for use in the treatment
of various indications such as mitral valve disorders and structural heart diseases, conditions often linked to HF. This heart access technology includes the heart access sheath, mitral valve neo-chordae, and
closure device. These devices are either in the discovery phase or preclinical development.

Licensing and Collaboration Agreements

Academic and clinical collaborations

We have core relationships
and collaborations with the Mayo Foundation for Medical Education and Research, or the Mayo Clinic, and the Trustees of Dartmouth College, or Dartmouth.



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Dartmouth College and Celdara

In January 2015, we entered into a stock purchase agreement, or the Celdara Agreement, with Celdara Medical, LLC, or Celdara, pursuant to which we purchased
all of the outstanding membership interests of OnCyte, LLC, or OnCyte, for a $10.0 million upfront payment to Celdara, $6.0 million of which was paid in cash and $4.0 million of which was paid in the form of 93,087 of our ordinary
shares. After this transaction we, Celdara and OnCyte entered into an asset purchase agreement, or OnCyte APA, pursuant to which Celdara sold to OnCyte, data, protocols, regulatory documents and intellectual property, including the rights and
obligations under license agreements between Celdara and Dartmouth College, related to our NKR-T cell therapy programs, or the Transferred Assets. Pursuant to the OnCyte APA, we are obligated to make
development-based milestone payments to Celdara of $40.0 million for clinical products and of $36.5 million for preclinical products, as well as sales-based milestone payments of up to $80.0 million for products based on the
Transferred Assets, or CAR Products. The OnCyte APA also requires us to make tiered single-digit royalty payments to Celdara in connection with the sales of CAR Products. Such royalties are payable on a CAR
Product-by CAR Product and country-by-country basis until the later of (i) the last day that at least one valid patent claim
covering the CAR Product exists, or (ii) the tenth anniversary of the day of the first commercial sale of the CAR Product in such country. Under the OnCyte APA, we can opt out of the development of any CAR Product if the data does not meet the
scientific criteria of success. We may also opt out of development of any CAR Product for any other reason upon payment of a termination fee of $2.0 million to Celdara.

2010 Dartmouth License Agreement

Under the exclusive
license agreement with Dartmouth College entered into in April 2010 and amended in February 2012, July 2013 and January 2015, Dartmouth College granted us (as successor in interest to Celdara) an exclusive, worldwide, royalty-bearing license to
certain know-how and patent rights to make, have made, use, and/or sell any product or process for human therapeutics, the manufacture, use or sale of which, is covered by such patent rights. Dartmouth College
reserves the right to use the licensed patent rights and licensed know-how, in the same field, for education and research purposes only. The patent rights covered by this agreement are related, in part, to
methods for treating cancer involving chimeric NKG2D and NKP30 receptor targeted therapeutics and T cell receptor-deficient T-cell compositions in treating tumor, infection, GvHD, transplant and radiation
sickness.

In consideration for the rights granted to us under the agreement, we are required to pay to Dartmouth College an annual license fee of $20,000
as well as a low single-digit royalty based on annual net sales of the licensed products by us and by our permitted sublicenses, with certain minimum net sales obligations beginning April 30, 2024 and continuing for each year of sales
thereafter. We are also obligated to pay to Dartmouth College a certain tiered percentage of sublicensing income ranging from the mid-single digits to the mid-teens
based on the development stage of the technology at the time the sublicense is granted. We are not required to pay sublicensing income on transactions in which we form a new spin-off entity and transfer at
least a portion of our assets. Additionally, the agreement requires that we exploit the licensed products, and we have agreed to meet certain developmental and regulatory milestones. Upon successful completion of such milestones, we are obligated to
pay to Dartmouth College certain milestone payments up to an aggregate amount of $1.5 million. We are responsible for all expenses in connection with the preparation, filing, prosecution and maintenance of the patents covered under the
agreement.

After April 30, 2024, Dartmouth College may terminate the license if we fail to meet the specified minimum net sales obligations for any
year, unless we pay to Dartmouth College the royalty we would otherwise be obligated to pay had we met such minimum net sales obligation. Dartmouth College may also terminate the license if we fail to meet a milestone within the specified time
period, unless we pay the corresponding milestone payment. Either party may terminate the agreement in the event the other party defaults or breaches any of the provisions of the agreement, subject to 30 days prior notice and opportunity to
cure. In addition, the agreement automatically terminates in the event we become insolvent, make an assignment for the benefit of creditors or file, or have filed against us, a petition in bankruptcy. Absent early termination, the agreement will
continue until the expiration date of the last to expire patent right included under the agreement in the last to expire territory. We expect that the last to expire patent right included under this agreement will expire in 2033, absent extensions
or adjustments.

2014 Dartmouth License Agreement

Under the exclusive license agreement with Dartmouth College entered into in June 2014 and amended in January 2015, Dartmouth College granted us (as successor
in interest to Celdara) an exclusive, worldwide, royalty-bearing license under certain know-how and patent rights to make, have made, use, modify, exploit,



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distribute, and/or sell any product or process for human therapeutics, the manufacture, use or sale of which, is covered by such patent rights. Our license is subject to any rights that may be
required to be granted to the government of the United States, and Dartmouth College reserves the right to use the licensed patent rights and licensed know-how, in the same field, for education and research
purposes only. The patent rights covered by this agreement are related, in part, to anti-B7-H6 antibody, fusion proteins and methods of using the same.

In consideration for the rights granted to us under the agreement, we are required to pay to Dartmouth College a license maintenance fee of $10,000 upon the
first anniversary of the agreement and an annual license maintenance fee of $20,000 thereafter. We are also required to pay to Dartmouth College a low single-digit royalty based on annual net sales of the licensed products by us and by our permitted
sub licensees, with a specified minimum royalty payment for each year of sales. We are obligated to pay to Dartmouth College a certain tiered percentage of sublicensing income ranging from the mid-single
digits to the mid-teens based on the time or development stage of the technology at the time the sublicense is granted. We are not required to pay sublicensing income on transactions in which we form a new spin-off entity and transfer at least a portion of our assets. Additionally, the agreement requires that we exploit the licensed products, and we have agreed to meet certain developmental and regulatory milestones.
Upon successful completion of such milestones for each licensed product, we are obligated to pay to Dartmouth College certain milestone payments up to an aggregate amount of $1.6 million. We are responsible for all expenses in connection with
the preparation, filing, prosecution and maintenance of the patents covered under the agreement.

Dartmouth College may, at its option, terminate the
license, upon thirty days written notice, if we fail to pay at least the minimum royalty payment amount or make such minimum payment within such thirty-day period. In addition, Dartmouth College has the right
to terminate if we fail to meet a milestone within the specified time period or fail to make the corresponding milestone payment, subject to 30 days prior written notice and opportunity to cure. We may unilaterally terminate the agreement by
giving three months advance written notice to Dartmouth College and paying a termination fee of $2,500. Either party may terminate the agreement in the event the other party defaults or breaches any of the provisions of the agreement, subject to 30
days prior notice and opportunity to cure. In addition, the agreement automatically terminates in the event we become insolvent, make an assignment for the benefit of creditors or file, or have filed against us, a petition in bankruptcy.
Absent early termination, the agreement will continue until the expiration date of the last to expire patent right included under the agreement in the last to expire territory. We expect that the last to expire patent right included under this
agreement will expire in 2033, absent extensions or adjustments.

Mayo Clinic

C-Cure is based on technology discovered at the Molecular Pharmacology and Experimental Therapeutics lab at the Mayo
Clinic, led by Dr. Andre Terzic. Under our technology license agreement with the Mayo Clinic entered into in June 2007 and amended in July 2008 and October 2010, or Mayo License, we were granted an exclusive, worldwide license to make, use,
modify, enhance, promote, market and/or sell the Cardiogenic Cocktail for the production of Cardiac Cells and Stem Cell Based Therapy for Non-ischemic Cardiomyopathic Heart Failure
within the field of cardiovascular regeneration or protection, including certain related patents. In addition, we were granted a non-exclusive, worldwide license to licensed
know-how in connection with the licensed inventions within the same field. The exclusive license is subject to the Mayo Clinics right to make and use the licensed inventions and licensed know-how within its affiliates own programs, and to the rights, if any, of the United States government. The Mayo Clinic has the right to purchase quantities of licensed invention from us at cost to meet its
and its affiliates internal needs.

In consideration for the rights granted to us under the Mayo License, we were required to pay an upfront fee to
Mayo Clinic of 9,500,000 upon the initial agreement and $3,193,125 upon the execution of the second amendment, which were subsequently converted into our share capital. We also paid the Mayo Clinic $337,000 for the purchase of equipment for
research purposes. Additionally, we are required to pay to the Mayo Clinic a low single-digit royalty on net commercial sales by us or by our permitted sublicensees from the commercialization of licensed products, on a licensed product-by-licensed product basis, beginning on the date of the first commercial sale of the relevant licensed product and extending until the earlier of (i) the 15 year
anniversary of the first commercial sale of such licensed product, (ii) the date on which the licensed product is no longer covered by a valid claim of a licensed patent in the applicable territory, or (iii) termination of the Mayo
License. The Mayo License permits a reduction of these royalties, not to exceed a specified floor, for amounts payable to third parties as required to in-license necessary third-party technology.



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Under the Mayo License, we are responsible for the development, manufacture and commercialization of the licensed
inventions. We committed to provide the Mayo Clinic with $500,000 of directed research funding per year for the years 2012 through 2014. Any results of this research will automatically be included as licensed inventions under the Mayo License. We
will also fund research at the Mayo Clinic in the amount of $1,000,000 per year for four years in the area of regeneration or protection for cardiovascular applications. Such payments will begin once we have achieved both commercial sale of a
licensed product and a positive cash flow from operations in the previous financial year. We will have an exclusive right of first negotiation to acquire an exclusive license to inventions that are the direct result of work carried out under these
grants, in accordance with the mechanism described in the Mayo License. The Mayo Clinic provided us with directed research and conducted a dose finding study for us at no additional cost. Subject to
pre-existing obligations, until October 18, 2015, we also have an exclusive right of first negotiation to obtain an exclusive license from the Mayo Clinic on any guided cardiopoiesis technology developed
by Dr. Andre Terzic or developed or co-developed by Dr. Atta Behfar, the senior investigator involved in the discovery of the cardiopoiesis technology. With respect to both of the foregoing rights of
first negotiation, if we and the Mayo Clinic do not reach agreement for a license for the applicable invention within the prescribed negotiation period or permitted extension, the Mayo Clinic is prohibited from entering into a license agreement for
such invention with a third party for a period of nine months.

The Mayo License will continue until the later of ten years or as long as the Mayo Clinic
has any rights to any part of the licensed inventions. The Mayo Clinic may terminate the license on a product-by-product basis or licensed
invention-by-licensed invention basis if we default in making payment when due and payable or under other circumstances specified in the Mayo License, subject to 120
days prior written notice and opportunity to cure. The Mayo Clinic may also terminate the Mayo License if we deliberately make false statements in reports delivered to Mayo Clinic. Additionally, Mayo Clinic may convert the license to non-exclusive or terminate the license upon final decision of an arbitral tribunal that we breached our diligence obligations under the Mayo License. Further, Mayo Clinic may terminate the agreement immediately for
our insolvency or bankruptcy, as described in the Mayo License.

In November 2014, we entered into a Preferred Access Agreement with the Mayo Clinic.
Pursuant to this agreement, the Mayo Clinic will review with us, on a quarterly basis, technologies arising from the Mayo Center for Regenerative Medicine, and we may review certain other technologies upon request. If, as a result of such reviews,
we and the Mayo Clinic decide to advance a certain technology, we will enter into a separate exclusive license agreement with respect to such technology. This agreement remains in effect until December 2017, and may be extended by mutual agreement.

ONO Pharmaceuticals

On July 11, 2016, we
entered into a license and collaboration agreement with ONO Pharmaceuticals Co., Ltd., or ONO, in connection with which we granted ONO an exclusive license for the development, manufacture and commercialization of allogenic products incorporating
our NKR-T cell technology in Japan, Korea and Taiwan. Under the terms of the collaboration, ONO is solely responsible for and bears all costs incurred in the research, development and commercialization of
such products in its geographies. In addition, we granted ONO an exclusive option to obtain an exclusive license to develop, manufacture and commercialize autologous products incorporating our autologous
CAR-T NKR-2 cell technology in Japan, Korea and Taiwan.

In consideration
for the rights granted to ONO under the agreement, we received an up-front payment in the amount of 1.25 billion JPY ($12.5 million) and we are eligible to receive additional milestones for up to
30.075 billion JPY ($299 million) in development and commercial milestones. In addition, we are entitled to receive double digit royalties on nets sales of licensed products in licensed territories.

Intellectual Property

Patents and patent
applications

Patents, patent applications and other intellectual property rights are important in the sector in which we operate. We consider on a case-by-case basis filing patent applications with a view to protecting certain innovative products, processes, and methods of treatment. We may also license or acquire rights
to patents, patent applications or other intellectual property rights owned by third parties, academic partners or commercial companies which are of interest to us.



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Our patent portfolio includes pending patent applications and issued patents in the United States and in foreign
countries. These patents and applications generally fall into four broad categories:



| |  |  | patents and patent applications licensed from Dartmouth that relate to our NKR-T platform;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | patents and pending patent applications relating to cardiopoiesis, a subset of which are licensed from the Mayo Clinic;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | patents and pending applications we own that relate to cardiac injection catheter technology;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | and patent applications owned by our subsidiary Corquest that relate to cardiac medical device technology.
| | - |  | ----------------------------------------------------------------------------------------------------------

The term of a U.S. patent may be eligible for patent term extension under the Hatch-Waxman Act to account for at least some of the time the drug or device is
under development and regulatory review after the patent is granted. With regard to a drug or device for which FDA approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one U.S.
patent. The extended patent term cannot exceed the shorter of five years beyond the non-extended expiration of the patent or 14 years from the date of the FDA approval of the drug or device. Some foreign
jurisdictions have analogous patent term extension provisions that allow for extension of the term of a patent that covers a device approved by the applicable foreign regulatory agency.

NKR-T cell Platform Patents

As of February 28, 2017, our CAR T-cell portfolio includes four patent families exclusively licensed to us by
Dartmouth. This portfolio includes four issued U.S. patents; six pending U.S. patent applications; and 13 foreign patent applications pending in jurisdictions including Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan, Mexico, and
Russia. These patents and patent applications relate to particular chimeric antigen receptors and to T-cell receptor-deficient T-cells, and will be further detailed
below.

A first patent family relates to chimeric NK receptors and methods for treating cancer. There are two granted US patents in this family and a
further pending US application. The scope of this patent family includes chimeric natural killer cell receptors (NKR CARs), T cells with such receptors (NKR CAR T cells) and methods of treating cancer with these NKR CAR T cells. Patents in this
family will begin to expire in 2025, absent any adjustments or extensions. We expect that any patents that eventually issue from currently pending applications in this family will begin to expire in 2025, absent any adjustments or extensions.

A second patent family relates to T cell receptor-deficient T cell compositions. Its scope envisages human T cells that express a chimeric receptor and have
impaired or reduced expression of the endogenous T cell receptor (TCR). Such cells are particularly useful in allogeneic cell therapy. The family includes members that relate to the concept (irrespective of the way the T cell is made T cell receptor
deficient), as well as members describing specific ways of making the cells TCR-deficient. There are two granted US patents, as well as three further pending US applications and ten applications in other
jurisdictions. Claim 1 of patent US9,181,527 was challenged by an anonymous third party in an ex parte reexamination procedure, but the USPTO has determined that claim 1 is patentable as amended. Patents in this family will begin to expire in
2030, absent any adjustments or extensions. We expect that any patents that eventually issue from currently pending applications in this family will begin to expire in 2030, absent any adjustments or extensions.

A third patent family is entitled NKp30 receptor targeted therapeutics and describes a specific NKR CAR based on the NKp30 receptor. It is pending in the US.
We expect that any patents that eventually issue from currently pending applications in this family will begin to expire in 2032, absent any adjustments or extensions.

A fourth family relates to an anti-B7-H6 antibody, CARs and BiTE molecules
containing such antibody, CAR T cells, and methods of treating cancer with the CAR-T cells. Applications are pending in China, Europe, Japan and the US. We expect that any patents that eventually issue from
currently pending applications in this family will begin to expire in 2033, absent any adjustments or extensions.

Cardiopoiesis Platform Patents

As of February 1, 2017, our cardiopoiesis platform portfolio includes five living patent families, four of which are owned by the Mayo Clinic or
jointly by Mayo and Celyad, which we refer to as the Mayo Cardiopoiesis Patents and are exclusively licensed to us, and one family that is owned by us, which we refer to as our Cardiopoiesis Patents.



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The Mayo Cardiopoiesis Patents include three issued U.S. patents; 26 foreign patents issued in jurisdictions
including Australia, China, Europe, Hong Kong, Israel, Japan, Mexico, New Zealand, Russia, Singapore, South Africa, the Republic of Korea and Taiwan; three pending U.S. patent applications; and 17 foreign patent applications pending in jurisdictions
including Europe, Australia, Brazil, Canada, China, Hong Kong, Israel, India, Japan, Mexico, Russia, Singapore, South Korea, and Thailand. These patents and patent applications relate to compositions and methods for inducing cardiogenesis in
embryonic stem cells, methods of identifying cardiopoietic stem cells, and methods of using cardiopoietic stem cells to treat cardiovascular tissue. The Mayo Cardiopoiesis Patents will begin to expire in 2025, absent any adjustments or extensions.
We expect that any patents that eventually issue from currently pending applications in the Mayo Cardiopoiesis patent portfolio will begin to expire in 2025, absent any adjustments or extensions.

Our Cardiopoiesis Patents include one issued U.S. patent and granted patents in each of Australia, Europe, Hong Kong, Japan, Mexico, New Zealand, Russia,
Singapore, South Korea and Taiwan; a pending U.S. patent application; and 7 foreign patent applications pending in jurisdictions including Brazil, Canada, China, India, Israel and Thailand. An anonymous third party has filed an opposition to the
granted European patent, this is currently being examined by the EPO. Oral proceedings were held on 6 March 2017 during the opposition procedure, which resulted in revocation of the patent. This decision still needs to be confirmed in writing,
and can be appealed. These patents and patent applications relate to pharmaceutical compositions containing cardiopoietic stem cells and methods of their production. Our Cardiopoiesis Patents will begin to expire in 2030, absent any adjustments
or extensions. We expect that any patents that eventually issue from currently pending applications in our Cardiopoiesis patent portfolio will begin to expire in 2030, absent any adjustments or extensions.

Cardiac Injection Catheter Technology Patents

As of
February 1, 2017, our cardiac injection catheter technology portfolio includes two patent families we own. This portfolio includes one issued U.S. patent and two pending U.S. patent applications; nine patents issued in jurisdictions including
Australia, Canada, Europe, Hong Kong, Israel, Japan, Mexico, New Zealand and Russia; and nine foreign patent applications pending in jurisdictions including Australia, Brazil, Canada, China, Europe, India, Israel, Japan and Singapore. These patents
and patent applications relate to injection catheters and processes for their use. Patents in this portfolio will begin to expire in 2029, absent any adjustments or extensions. We expect that any patents that eventually issue from currently pending
applications in the Cardiac Injection Catheter Technology patent portfolio will begin to expire in 2030, absent any adjustments or extensions.

Heart
Access Technology Patents

As of February 1, 2017, our heart access technology portfolio includes five patent families owned by Corquest, our
wholly owned subsidiary. This portfolio includes eight pending U.S. patent applications and twenty-four foreign patent applications pending in various jurisdictions including Australia, Canada, Europe, Israel, Japan, and Mexico. These patent
applications relate to devices, assemblies and methods for treating cardiac injuries and defects. Patents in this portfolio, when eventually issued, will begin to expire in 2032.

Trade secrets

In addition to our patents and patent
applications, we keep certain of our proprietary information as trade secrets, which we seek to protect by confidentiality agreements with our employees and third parties, and by fragmenting know-how between
different individuals, in accordance with standard industry practices.

Competition

The industry in which we operate is subject to rapid technological change. We face competition from pharmaceutical, biopharmaceutical and medical devices
companies, as well as from academic and research institutions. Some of these competitors are pursuing the development of medicinal products and other therapies that target the same diseases and conditions that we are targeting.

Some of our current or potential competitors, either alone or with their collaboration partners, have significantly greater financial resources and expertise
in research and development, manufacturing, preclinical testing, conducting clinical trials and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and gene therapy industries may result in even more
resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These
competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or
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Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products
that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly
than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. The key competitive factors affecting the success of all of our programs are likely to be their
efficacy, safety and convenience.

Many of our competitors have substantially greater financial, technical and other resources

CAR T-Cell Therapy

Early results from clinical trials have fueled continued interest in CAR T-cell therapies and our competitors as of the
date of this Annual Report include Bellicum Pharmaceuticals, Inc., bluebird bio, Inc., Cellectis S.A., Juno Therapeutics, Inc., Kite Pharma Inc., Novartis AG, NantKwest Inc and Ziopharm Oncology, Inc.

C-Cure

We have
identified several companies that are active in cardiac cell therapy as of the date of this Annual Report, including Capricor Inc., Mesoblast Ltd, Biocardia Inc. and Vericel Corporation.

Government Regulation

Government authorities in
the United States at the federal, state and local level and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping,
promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of drug and biological products, or biologics, such as our drug product candidates. Generally, before a new drug or biologic can be
marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and an application for marketing authorization must be approved by the
regulatory authority.

Certain products may be comprised of components that are regulated under separate regulatory authorities and by different centers
at the FDA. These products are known as combination products. A combination product is comprised of a combination of a drug and a device; a biological product and a device; a drug and a biological product; or a drug, a device, and a biological
product. Under regulations issued by the FDA, a combination product includes:



| |  |  | a product comprised of two or more regulated components that are physically, chemically, or otherwise combined or mixed and produced as a single entity;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | two or more separate products packaged together in a single package or as a unit and comprised of drug and device products, device and biological products, or biological and drug products;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a drug, device, or biological product packaged separately that according to its investigational plan or proposed labeling is intended for use only with an approved individually specified drug, device or biological where
both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of the approved product would need to be changed, e.g., to reflect a change in intended use, dosage form, strength,
route of administration, or significant change in dose; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any investigational drug, device, or biological packaged separately that according to its proposed labeling is for use only with another individually specified investigational drug, device, or biological product where
both are required to achieve the intended use, indication, or effect.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

One of our drug product candidates is a combination product that is
comprised of a biologic and a device (an endocardial injection catheter) that is used for delivery of the biologic. Under the FDCA, the FDA is charged with assigning a center with primary jurisdiction, or a lead center, for review of a combination
product. That determination is based on the primary mode of action of the combination product, which means the single mode of action that provides the most important therapeutic action of the combination product, i.e., the mode of action
expected to make the greatest contribution to the overall intended therapeutic effects of the combination product. Thus, if the primary mode of action of a device-biologic combination product is attributable to the biologic product, that is, if it
acts by means of a virus, therapeutic



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serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product, the FDA center responsible for premarket review of the biologic product (the
Center for Biologics Evaluation and Research, or CBER) would have primary jurisdiction for the combination product. CBER is the agency component with primary jurisdiction for the premarket review and regulation for our
C-Cure investigational product. Because C-Cure utilizes a catheter as a delivery system to the heart, CBER may consult or collaborate with the agency center that is
responsible for the premarket review of that device, the Center for Devices and Radiological Health, or CDRH.

U.S. Biological Product Development

In the United States, the FDA regulates biologics under the Federal Food, Drug, and Cosmetic Act, or FDCA, and the Public Health Service Act, or PHSA,
and their implementing regulations. Biologics are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign
statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject
an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDAs refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product
recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or
judicial enforcement action could have a material adverse effect on us.

Our drug product candidates must be approved by the FDA through the Biologics
License Application, or BLA, process before they may be legally marketed in the United States. The process required by the FDA before a biologic may be marketed in the United States generally involves the following:



| |  |  | completion of extensive nonclinical, sometimes referred to as preclinical laboratory tests, preclinical animal studies and formulation studies in accordance with applicable regulations, including the FDAs Good
Laboratory Practice, or GLP, regulations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | submission to the FDA of an IND, which must become effective before human clinical trials may begin;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practices, or GCPs, and other clinical trial-related regulations to establish the safety and
efficacy of the proposed drug product candidate for its proposed indication;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | submission to the FDA of a BLA;
| | - |  | -------------------------------



| |  |  | satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the product is produced to assess compliance with the FDAs
current good manufacturing practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the products identity, strength, quality, purity and potency;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | potential FDA audit of the preclinical and/or clinical trial sites that generated the data in support of the BLA; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | FDA review and approval of the BLA prior to any commercial marketing or sale of the product in the United States.
| | - |  | -----------------------------------------------------------------------------------------------------------------

The data required to support a BLA is generated in two distinct development stages: preclinical and clinical. The preclinical development stage generally
involves laboratory evaluations of drug chemistry, formulation and stability, as well as studies to evaluate toxicity in animals, which support subsequent clinical testing. The conduct of the preclinical studies must comply with federal regulations,
including GLPs. The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, as well as other information, to
the FDA as part of the IND. An IND is a request for authorization from the FDA to administer an investigational drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for human
trials. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions regarding the proposed clinical trials and places the IND on clinical hold within that
30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.



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The FDA may also impose clinical holds on a drug product candidate at any time before or during clinical trials due to safety concerns, non-compliance, or
other issues affecting the integrity of the trial. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that could cause the trial to be
suspended or terminated. Where a trial is conducted at, or sponsored by, institutions receiving NIH funding for recombinant DNA research, prior to the submission of an IND to the FDA, a protocol and related documentation is submitted to and the
trial is registered with the NIH Office of Biotechnology Activities, or OBA, pursuant to the NIH Guidelines for Research Involving Recombinant or Synthetic Nucleic Acid Molecules, or NIH Guidelines. Compliance with the NIH Guidelines is mandatory
for investigators at institutions receiving NIH funds for research involving recombinant DNA, however many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. The NIH is responsible for convening the
Recombinant NDA Advisory Committee, or RAC, a federal advisory committee, which discusses protocols that raise novel or particularly important scientific, safety or ethical considerations at one of its quarterly public meetings. The OBA will notify
the FDA of the RACs decision regarding the necessity for full public review of a gene therapy protocol. RAC proceedings and reports are posted to the OBA web site and may be accessed by the public.

The clinical stage of development involves the administration of the drug product candidate to healthy volunteers and patients under the supervision of
qualified investigators, generally physicians not employed by or under the trial sponsors control, in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any
clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety
and assess efficacy. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND. Further, each clinical trial must be reviewed and approved by an independent institutional review board, or IRB, at
or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical
trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial
until completed.

There are also requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public
registries. Sponsors of certain clinical trials of FDA-regulated products, including biologics, are required to register and disclose certain clinical trial information, which is publicly available at
www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also
obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved. However, there are evolving rules and
increasing requirements for publication of trial-related information, and it is possible that data and other information from trials involving biologics that never garner approval could in the future require disclosure. In addition, publication
policies of major medical journals mandate certain registration and disclosures as a pre-condition for potential publication, even if not currently mandated as a matter of law. Competitors may use this
publicly available information to gain knowledge regarding the progress of development programs.

Clinical trials are generally conducted in three
sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap. Phase 1 clinical trials generally involve a small number of healthy volunteers who are initially exposed to a single dose and then multiple doses of the drug product
candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the drug product candidate and, if possible, to gain early evidence on effectiveness. Phase 2 clinical
trials typically involve studies in disease-affected patients to determine the dose required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, as well as
identification of possible adverse effects and safety risks and preliminary evaluation of efficacy. Phase 3 clinical trials generally involve large numbers of patients at multiple sites, in multiple countries, and are designed to provide the data
necessary to demonstrate the efficacy of the product for its intended use, its safety in use, and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product approval. Phase 3 clinical trials may
include comparisons with placebo and/or other comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing. Generally, two adequate and well-controlled Phase 3 clinical trials are required
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Post-approval trials, sometimes referred to as Phase IV clinical trials, may be conducted after initial marketing
approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, FDA may condition approval of a BLA on the sponsors agreement to conduct additional
clinical trials to further assess the biologics safety and effectiveness after BLA approval.

Progress reports detailing the results of the clinical
trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies
suggesting a significant risk to humans exposed to the biologic, findings from animal or in vitro testing that suggest a significant risk for human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction
over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA, the IRB, or the sponsor may suspend or terminate a clinical
trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the
clinical trial is not being conducted in accordance with the IRBs requirements or if the drug has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified
experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated intervals based on access to certain data from the
trial. We may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate. Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional
information about the chemistry and physical characteristics of the drug product candidate as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be
capable of consistently producing quality batches of the drug product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be
selected and tested and stability studies must be conducted to demonstrate that the drug product candidate does not undergo unacceptable deterioration over its shelf life.

BLA and FDA Review Process

Following trial completion,
trial data are analyzed to assess safety and efficacy. The results of preclinical studies and clinical trials are then submitted to the FDA as part of a BLA, along with proposed labeling for the product and information about the manufacturing
process and facilities that will be used to ensure product quality, results of analytical testing conducted on the chemistry of the drug product candidate, and other relevant information. The BLA is a request for approval to market the biologic for
one or more specified indications and must contain proof of safety, purity, potency and efficacy, which is demonstrated by extensive preclinical and clinical testing. The application may include both negative or ambiguous results of preclinical and
clinical trials as well as positive findings. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a use of a product, or from a number of alternative sources, including studies initiated by investigators.
To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product to the satisfaction of the FDA. FDA approval of a BLA must be obtained before a biologic
may be marketed in the United States.

Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a significant user
fee, which is adjusted on an annual basis. PDUFA also imposes an annual product fee for human drugs and an annual establishment fee on facilities used to manufacture prescription drugs. Fee waivers or reductions are available in certain
circumstances, including a waiver of the application fee for the first application filed by a small business.

Once a BLA has been accepted for filing,
which occurs, if at all, sixty days after the BLAs submission, the FDAs goal is to review BLAs within 10 months of the filing date for standard review or six months of the filing date for priority review, if the application is for a
product intended for a serious or life-threatening condition and the product, if approved, would provide a significant improvement in safety or effectiveness. The review process is often significantly extended by FDA requests for additional
information or clarification.

After the BLA submission is accepted for filing, the FDA reviews the BLA to determine, among other things, whether the
proposed drug product candidate is safe and effective for its intended use, and whether the drug product candidate is being manufactured in accordance with cGMP to assure and preserve the drug



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product candidates identity, strength, quality, purity and potency. The FDA may refer applications for novel drug product candidates or drug product candidates which present difficult
questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA
is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result
in extensive discussions between the FDA and us during the review process. The review and evaluation of a BLA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely
approval, if at all.

Before approving a BLA, the FDA will conduct a pre-approval inspection of the manufacturing
facilities for the new product to determine whether they comply with cGMPs. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure
consistent production of the product within required specifications. In addition, before approving a BLA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements. After the FDA evaluates the application,
manufacturing process and manufacturing facilities, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A
Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter usually describes all of the specific deficiencies in the BLA identified
by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal Phase III clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or
manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information is submitted, the FDA may
ultimately decide that the BLA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data.

There is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant difficulties or
costs during the review process. If a product receives marketing approval, the approval may be significantly limited to specific populations, severities of allergies, and dosages or the indications for use may otherwise be limited, which could
restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling or may condition the approval of the BLA on other changes to the proposed
labeling, development of adequate controls and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects of approved products. For example, the FDA may require Phase IV testing which
involves clinical trials designed to further assess the products safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA may also place other
conditions on approvals including the requirement for a Risk Evaluation and Mitigation Strategy, or REMS, to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will
not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization
tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance
with regulatory standards or if problems occur following initial marketing.

Expedited Development and Review Programs

The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new drugs and biological products that meet certain
criteria. Specifically, new drugs and biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and nonclinical or clinical data demonstrate the potential to address unmet
medical needs for the condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new drug or biologic may request the FDA to designate the drug or biologic
as a Fast Track product concurrently with, or at any time after, submission of an IND, and the FDA must determine if the product qualifies for Fast Track designation within 60 days of receipt of the sponsors request. Unique to a Fast Track
product, the FDA may consider for review sections of the marketing application on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees
to accept sections of the application and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.



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Any product submitted to the FDA for marketing, including under a Fast Track program, may be eligible for other
types of FDA programs intended to expedite development and review, such as priority review and accelerated approval. Any product is eligible for priority review, or review within a six-month timeframe from the
date a complete BLA is accepted for filing, if it has the potential to provide a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional resources to the evaluation of an
application for a new drug or biological product designated for priority review in an effort to facilitate the review.

Additionally, a product may be
eligible for accelerated approval. An investigational drug may obtain accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies and demonstrates an effect on a
surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical
benefit. As a condition of approval, the FDA may require that a sponsor of a drug or biological product receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. If the FDA concludes that a drug shown to be
effective can be safely used only if distribution or use is restricted, it will require such post-marketing restrictions as it deems necessary to assure safe use of the drug, such as:



| |  |  | distribution restricted to certain facilities or physicians with special training or experience; or
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | distribution conditioned on the performance of specified medical procedures.
| | - |  | ----------------------------------------------------------------------------

The limitations imposed would be
commensurate with the specific safety concerns presented by the product. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could
adversely impact the timing of the commercial launch of the product. Fast Track designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

Breakthrough Designation

The Food and Drug
Administration Safety and Innovation Act, or FDASIA, amended the FDCA to require the FDA to expedite the development and review of a breakthrough therapy. A product can be designated as a breakthrough therapy if it is intended to treat a serious or
life-threatening condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. A sponsor may request that a drug product candidate be
designated as a breakthrough therapy concurrently with, or at any time after, the submission of an IND, and the FDA must determine if the drug product candidate qualifies for breakthrough therapy designation within 60 days of receipt of the
sponsors request. If so designated, the FDA shall act to expedite the development and review of the products marketing application, including by meeting with the sponsor throughout the products development, providing timely advice
to the sponsor to ensure that the development program to gather preclinical and clinical data is as efficient as practicable, involving senior managers and experienced review staff in a cross-disciplinary review, assigning a cross-disciplinary
project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor, and taking steps to ensure that the design of the clinical trials is as
efficient as practicable.

Accelerated Approval for Regenerative Advanced Therapies

As part of the 21st Century Cures Act, Congress recently amended the FD&C Act to create an accelerated approval program for regenerative advanced
therapies, which include cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products. Regenerative advanced therapies do not include those human cells,
tissues, and cellular and tissue based products regulated solely under section 361 of the Public Health Service Act and 21 CFR Part 1271. The new program is intended to facilitate efficient development and expedite review of regenerative advanced
therapies, which are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition. A drug sponsor may request that FDA designate a drug as a regenerative advanced therapy concurrently with or at any time after
submission of an IND. FDA has 60 calendar days to determine whether the drug meets the criteria, including whether there is preliminary clinical evidence indicating that the drug has the potential to address unmet medical needs for a serious or
life-threatening disease or condition. A new drug application or BLA for a regenerative advanced therapy may be eligible



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for priority review or accelerated approval through (1) surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit or (2) reliance upon data obtained
from a meaningful number of sites. Benefits of such designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval. A regenerative advanced therapy that is
granted accelerated approval and is subject to postapproval requirements may fulfill such requirements through the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence, such as electronic
health records; the collection of larger confirmatory data sets; or postapproval monitoring of all patients treated with such therapy prior to its approval.

Pediatric Trials

Under the Pediatric Research Equity
Act, or PREA, a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric
subpopulation for which the product is safe and effective. FDASIA requires that a sponsor who is planning to submit a marketing application for a drug or biological product that includes a new active ingredient, new indication, new dosage form, new
dosing regimen or new route of administration submit an initial Pediatric Study Plan, or PSP, within sixty days of an end-of-Phase II meeting or as may be agreed between
the sponsor and FDA. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for
not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. FDA and the sponsor must reach
agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials, and/or other
clinical development programs. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers.

Post-Marketing Requirements

Following approval of a new
product, a manufacturer and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and recordkeeping activities, reporting to the applicable regulatory authorities of adverse experiences with
the product, providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the products approved labeling (known as off-label use), limitations on industry-sponsored scientific and educational activities, and requirements for promotional activities involving the internet. Although physicians may prescribe legally
available drugs and biologics for off-label uses, manufacturers may not market or promote such off-label uses.

Modifications or enhancements to the product or its labeling or changes of the site of manufacture are often subject to the approval of the FDA and other
regulators, which may or may not be received or may result in a lengthy review process. Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use. Any distribution of prescription drug products and
pharmaceutical samples must comply with the U.S. Prescription Drug Marketing Act, or the PDMA, a part of the FDCA.

In the United States, once a product
is approved, its manufacture is subject to comprehensive and continuing regulation by the FDA. The FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMPs. The cGMP requirements for
constituent parts of cross-labeled combination products that are manufactured separately and not co-packaged are the same as those that would apply if these constituent parts were not part of a combination
product. For single-entity and co-packaged combination products, there are two ways to demonstrate compliance with cGMP requirements, either compliance with all cGMP regulations applicable to each of the
constituent parts included in the combination product, or a streamlined approach demonstrating compliance with either the drug/biologic cGMPs or the medical device quality system regulation rather than demonstrating full compliance with both, under
certain conditions. These conditions include demonstrating compliance with specified provisions from the other of these two sets of cGMP requirements. Because the C-Cure device comprises a biologic and a
catheter that are not co-packaged, we need to comply with the cGMPs requirements for each constituent part. We rely, and expect to continue to rely, on third parties for the production of clinical and
commercial quantities of our products in accordance with cGMP regulations. cGMP regulations require, among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation
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Manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are
subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to
maintain cGMP compliance. These regulations also impose certain organizational, procedural and documentation requirements with respect to manufacturing and quality assurance activities. BLA holders using contract manufacturers, laboratories or
packagers are responsible for the selection and monitoring of qualified firms, and, in certain circumstances, qualified suppliers to these firms. These firms and, where applicable, their suppliers are subject to inspections by the FDA at any time,
and the discovery of violative conditions, including failure to conform to cGMP, could result in enforcement actions that interrupt the operation of any such facilities or the ability to distribute products manufactured, processed or tested by them.
Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved BLA, including, among other things, recall or withdrawal of the product from the market.

The FDA also may require post-approval testing, sometimes referred to as Phase IV testing, risk minimization action plans and post-marketing surveillance to
monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product. Discovery of previously unknown problems with a product or the failure to comply with applicable FDA
requirements can have negative consequences, including adverse publicity, judicial or administrative enforcement, untitled or warning letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal
penalties, among others. Newly discovered or developed safety or effectiveness data may require changes to a products approved labeling, including the addition of new warnings and contraindications, and also may require the implementation of
other risk management measures. Also, new government requirements, including those resulting from new legislation, may be established, or the FDAs policies may change, which could delay or prevent regulatory approval of our products under
development.

Other Regulatory Matters

Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in addition
to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services, or CMS, other divisions of the Department of Health and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission,
the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments. In the United States, sales, marketing and scientific/educational programs must also comply
with federal and state fraud and abuse laws, data privacy and security laws, transparency laws, and pricing and reimbursement requirements in connection with governmental payor programs, among others. The handling of any controlled substances must
comply with the U.S. Controlled Substances Act and Controlled Substances Import and Export Act. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. Manufacturing, sales, promotion and
other activities are also potentially subject to federal and state consumer protection and unfair competition laws.

The distribution of pharmaceutical
products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

The failure to comply with regulatory requirements subjects firms to possible legal or regulatory action. Depending on the circumstances, failure to meet
applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, or refusal to allow a
firm to enter into supply contracts, including government contracts. In addition, even if a firm complies with FDA and other requirements, new information regarding the safety or efficacy of a product could lead the FDA to modify or withdraw product
approval. Prohibitions or restrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example:
(i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to
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U.S. Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of the FDA approval of our drug product candidates, some of our U.S. patents may be eligible for limited
patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for
patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the products approval date. The patent term
restoration period is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and the approval of that application,
except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted
prior to the expiration of the patent. The U.S. PTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for our currently owned
or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.

An abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an
FDA-licensed reference biological product was created by the Biologics Price Competition and Innovation Act of 2009, or BPCI Act, which was part of the Patient Protection and Affordable Care Act, as amended by
the Health Care and Education Reconciliation Act of 2010, or collectively the ACA. This amendment to the PHSA attempts to minimize duplicative testing. Biosimilarity, which requires that the biological product be highly similar to the reference
product notwithstanding minor differences in clinically inactive components and that there be no clinically meaningful differences between the product and the reference product in terms of safety, purity, and potency, can be shown through analytical
studies, animal studies, and a clinical trial or trials. Interchangeability requires that a biological product be biosimilar to the reference product and that the product can be expected to produce the same clinical results as the reference product
in any given patient and, for products administered multiple times, that the product and the reference product may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to
exclusive use of the reference biological product. However, complexities associated with the larger, and often more complex, structure of biological products as compared to small molecule drugs, as well as the processes by which such products are
manufactured, pose significant hurdles to implementation that are still being worked out by the FDA.

A reference biological product is granted twelve
years of exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after first licensure.
First licensure typically means the initial date the particular product at issue was licensed in the United States. This does not include a supplement for the biological product or a subsequent application by the same sponsor or
manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or
strength, unless that change is a modification to the structure of the biological product and such modification changes its safety, purity, or potency. Whether a subsequent application, if approved, warrants exclusivity as the first
licensure of a biological product is determined on a case-by-case basis with data submitted by the sponsor.

Pediatric exclusivity is another type of regulatory market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing
exclusivity periods and patent terms. This six-month exclusivity, which attaches to the twelve-year exclusivity period for reference biologics, may be granted based on the voluntary completion of a pediatric
trial in accordance with an FDA-issued Written Request for such a trial.

European Union Drug
Development

In the European Union, our future drug product candidates will also be subject to extensive regulatory requirements. As in the United
States, medicinal products can only be marketed if a marketing authorization, or MA, from the competent regulatory agencies has been obtained.

Clinical Trials

Similar to the United States, the
various phases of preclinical and clinical research in the European Union are subject to significant regulatory controls. Although the EU Clinical Trials Directive 2001/20/EC has sought to harmonize the European Union clinical trials regulatory
framework, setting out common rules for the control and authorization of clinical trials in the European Union, the European Union Member States



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have transposed and applied the provisions of the Directive differently. This has led to significant variations in the Member State regimes. To improve the current system, a new Regulation
No. 536/2014 on clinical trials on medicinal drug product candidates for human use, which repealed Directive 2001/20/EC, was adopted on April 16, 2014, and published in the European Official Journal on May 27, 2014. The new Regulation
aims at harmonizing and streamlining the clinical trials authorization process, simplifying adverse event reporting procedures, improving the supervision of clinical trials, and increasing their transparency. The new Regulation entered into force on
June 16, 2014, and is applicable since May 28, 2016. Until then the Clinical Trials Directive 2001/20/EC will still apply. In addition, the transitory provisions of the new Regulation offer the sponsors the possibility to choose between
the requirements of the Directive and the Regulation for one year from the entry into application of the Regulation.

Under the current regime, before a
clinical trial can be initiated it must be approved in each of the European Union countries where the trial is to be conducted by two distinct bodies: the National Competent Authority, or NCA, and one or more Ethics Committees, or ECs. More
specifically, a clinical trial may not be started until the relevant EC has issued a favorable opinion, and the NCA has not informed the Sponsor of the trial of any grounds for non-acceptance or confirmed that
no such grounds exist. Approval will only be granted if satisfactory information demonstrating the quality of the investigational agent and its non-clinical safety has been provided, together with a study plan
that details the manner in which the trial will be carried out.

ECs determine whether the proposed clinical trial will expose participants to
unacceptable conditions of hazards, while considering, among other things, the trial design, protocol, facilities, investigator and supporting staff, recruitment of clinical trial subjects, the Investigators Brochure, or IB, indemnity and
insurance, etc. The EC also determines whether clinical trial participants have given informed consent to participate in the trial. Following receipt of an application (which must be submitted in the national language), ECs must deliver their
opinion within 60 days (or sooner if the Member State has implemented a shorter time period). For clinical trials of gene therapy, somatic cell therapy, and all medicinal products containing genetically modified organisms, this timeline may be
extended (with an additional 120 days).

Similarly, a valid request for authorization (in the national language) must be submitted to the NCA of each
Member State where the trial will be conducted. Sponsors must be notified of the decision within 60 days of receipt of the application (unless shorter time periods have been fixed), in the absence of which, the trial is considered approved. However,
for clinical trials of gene therapy, somatic cell therapy, and all medicinal products containing genetically modified organisms, a written authorization by the competent NCA is required. Similar timeline extensions as for ECs exist.

Studies must comply with ethical guidelines and Good Clinical Practice (GCP) guidelines. Monitoring of adverse reactions that occur during clinical trials,
including, where applicable, notification of the same to the competent NCA and ECs, is also required. Trials can be terminated early if a danger to human health is established or continuing the trial would be considered unethical. Consequently, the
rate of completion of clinical trials may be delayed by many factors, including slower than anticipated patient enrollment or adverse events occurring during clinical trials.

Drug Review and Approval

In the European Economic Area,
or EEA (which is comprised of the 28 Member States of the European Union plus Norway, Iceland and Liechtenstein), medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA. There are two types of marketing
authorizations:

The Centralized MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee
for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, and which is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology
medicinal products, orphan medicinal products, advanced-therapy medicines such as gene-therapy, somatic cell-therapy or tissue-engineered medicines, and medicinal products containing a new active substance indicated for the treatment of HIV, AIDS,
cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions, and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that
constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union.

National
MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already
been authorized for marketing in a Member State of the EEA, this National MA can be recognized in other Member State(s) through the Mutual Recognition



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Procedure, or MRP. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the
Decentralized Procedure, or DCP. Under the DCP an identical dossier is submitted to the competent authorities of each of the Member States in which the MA is sought, one of which is selected by the applicant as the Reference Member State, or RMS.
The competent authority of the RMS prepares a draft assessment report, a draft summary of product characteristics, or SmPC, and a draft of the labeling and package leaflet, which are sent to the other Member States (referred to as the Concerned
Member States, or CMSs) for their approval. If the CMSs raise no objections, based on a potential serious risk to public health, to the assessment, SmPC, labeling, or packaging proposed by the RMS, the product is subsequently granted a national MA
in all the relevant Member States (i.e. in the RMS and the CMSs).

Under the above described procedures, before granting the MA, the EMA or the competent
authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

Marketing Authorization Application

Following positive
completion of clinical trials, pharmaceutical companies can submit a MA application. The MA application shall include all information that is relevant to the evaluation of the medicinal products, whether favorable or unfavourable. The application
dossier must include, among other things, the results of pharmaceutical (physico-chemical, biological, or microbiological) tests, preclinical (toxicological and pharmacological) tests, and clinical trials, including the therapeutic indications,
contra-indications, and adverse reactions, and the recommended dosing regimen or posology.

In addition to demonstrating the safety and efficacy of the
medicinal product, pharmaceutical companies are required to guarantee the consistent quality of the product. Therefore, the conditions for obtaining a MA include requirements that the manufacturer of the product complies with applicable legislation
including Good Manufacturing Practice, or GMP, related implementing measures and applicable guidelines that involve, amongst others, ongoing inspections of manufacturing and storage facilities.

Early Access Mechanisms

Several schemes exist in the EU
to support earlier access to new medicines falling within the scope of the Centralized Procedure, in particular (i) accelerated assessment; (ii) conditional MAs ; and (iii) MAs granted under exceptional circumstances.

For a medicine, which is of major public health interest (in particular, in terms of therapeutic innovation), accelerated assessment can be
requested, taking up to 150 days instead of the usual period of up to 210 days. There is no single definition of what constitutes major public health interest. This should be justified by the applicant on a case-by-case basis. The justification should present the arguments to support the claim that the medicinal product introduces new methods of therapy or improves on existing methods, thereby addressing to a
significant extent the greater unmet needs for maintaining and improving public health.

Conditional MAs may be granted on the basis of less complete data
than usual in order to meet unmet medical needs of patients and in the interest of public health, subject to specific obligations with regard to further studies and intended to be replaced by a full unconditional MA once the missing data is
provided. A conditional MA is valid for one year on a renewable basis.

Medicines for which the MA applicant can demonstrate that the normally required
comprehensive efficacy and safety data cannot be provided (for example because the disease which the medicine treats is extremely rare) may be eligible for a MA under exceptional circumstances. These are medicines for which it is never intended that
a full MA will be obtained. MAs under exceptional circumstances are reviewed annually to reassess the risk-benefit balance.

Supplementary Protection
Certificates and data/market exclusivity

In Europe, the extension of effective patent term to compensate originator pharmaceutical companies for the
period between the filing of an application for a patent for a new medicinal product and the first MA for such product, has been achieved by means of a Supplementary Protection Certificate (SPC) which can be applied for by the originator
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and comes into effect on expiry of the basic patent. Such SPC attaches only to the active ingredient of the medicinal product for which the MA has been granted. The SPC for an active ingredient
has a single last potential expiry date throughout the EEA, and cannot last for more than five years from the date on which it takes effect (i.e., patent expiry. Furthermore, the overall duration of protection afforded by a patent and a SPC
cannot exceed 15 years from the first MA. The duration of a medicinal product SPC can be extended by a single six-month period, or pediatric extension, when all studies in accordance with a pediatric
investigation plan, or PIP, have been carried out.

Innovative medicines benefit from specific data and marketing exclusivity regimes. These regimes are
intended to provide general regulatory protection to further stimulate innovation. The current rules provide for (i) an 8-year data protection (from the MA of an innovative medicine) against the filing of
an abridged application for a follow-on product, referring to the data supporting the MA of the innovative medicine (data exclusivity); and (ii) a 10-year
protection against the marketing of a follow-on product (marketing exclusivity), with a possible extension by 1 year if, during the first 8 years, a new therapeutic indication (which is considered to bring a
significant clinical benefit in comparison with existing therapies) is approved. This protection is often referred to as the eight, plus two, plus one rule. Additional reward mechanisms exist, most notably a 10-year orphan medicines marketing exclusivity, and a 1-year data exclusivity for developing a new indication for an old substance and for switch data supporting a
change in prescription status.

The current rules also provide for a system of obligations and rewards and incentives intended to facilitate the
development and accessibility of pediatric medicinal products, and to ensure that such products are subject to high quality ethical research. Pursuant to such rules, pharmaceutical companies are often required to submit a Pediatric Investigation
Plan, or PIP, at a relatively early stage of product development, which defines the pediatric studies to be completed before a MA application can be submitted. Upon completion of the studies in the agreed PIP, the company may be entitled to a
reward, i.e., the afore-mentioned 6-month pediatric extension of the SPC for non-orphan medicinal products; or a
two-year extension of the 10-year marketing exclusivity period for orphan medicines.

Post-marketing and pharmacovigilance requirements

When
granting a MA, competent authorities (i.e., the EMA or the relevant NCAs) may impose an obligation to conduct additional clinical testing, sometimes referred to as Phase IV clinical trials, or other post-approval commitments, to monitor the
product after commercialization. Additionally, the MA may be subjected to limitations on the indicated uses for the product.

Also, after a MA has been
obtained, the marketed product and its manufacturer and MA holder will continue to be subject to a number of regulatory obligations, as well as to monitoring/inspections by the competent authorities.

Under applicable pharmacovigilance rules, pharmaceutical companies must, in relation to all their authorized products, irrespective of the regulatory route of
approval, collect, evaluate and collate information concerning all suspected adverse reactions and, when relevant, report it to the competent authorities. This information includes both suspected adverse reactions signaled by healthcare
professionals, either spontaneously or through post-authorization studies, regardless of whether or not the medicinal product was used in accordance with the authorized SmPC and/or any other marketing conditions, and suspected adverse reactions
identified in worldwide-published scientific literature. To that end, a MA holder must have (permanently and continuously) at its disposal an appropriately qualified person responsible for pharmacovigilance and establish an adequate
pharmacovigilance system. All relevant suspected adverse reactions, including suspected serious adverse reactions, which must also be reported on an expedited basis, should be submitted to the competent authorities in the form of Periodic Safety
Update Reports, or PSURs. PSURs are intended to provide an update for the competent authorities on the worldwide safety experience of a medicinal product at defined time points after authorization. PSURs must therefore comprise a succinct summary of
information together with a critical evaluation of the risk/benefit balance of the medicinal product, taking into account any new or changing information. The evaluation should ascertain whether any further investigations need to be carried out, and
whether the SmPC or other product information needs to be modified.

To ensure that pharmaceutical companies comply with pharmacovigilance regulatory
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are either routine (i.e. aimed at determining whether the appropriate personnel, systems, and resources are in place) or targeted to companies suspected of being non-compliant. Reports of the outcome of such inspections will be used to help improve compliance and may also be used as a basis for enforcement action.

Other regulatory matters

Advertising of medicines is
subject to tighter controls than general consumer goods and specific requirements are set forth in Directive 2001/83/EC, which apply in addition to the general rules. In general, advertising of unapproved medicinal products or of unapproved uses of
otherwise authorized medicinal products (e.g., off-label uses) is prohibited, and advertising for prescription medicinal products must be directed only towards health care professionals (i.e.,
advertising of these products to the general public is prohibited). Member States have implemented the advertising rules differently and the requirements vary significantly depending on the specific country. Advertising of medicinal products in an
online setting, including social media, can be particularly challenging given the strict rules in place.

Pricing &Reimbursement

United States

Sales of our products will depend, in part,
on the extent to which our products, once approved, will be covered and reimbursed by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly
reducing reimbursements for medical products and services. The process for determining whether a third-party payor will provide coverage for a drug product, including a biologic, typically is separate from the process for setting the price of a drug
product or for establishing the reimbursement rate that a payor will pay for the drug product once coverage is approved. Third-party payors may limit coverage to specific drug products on an approved list, also known as a formulary, which might not
include all of the approved drugs for a particular indication.

In order to secure coverage and reimbursement for any drug product candidate that might be
approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the drug product candidate, in addition to the costs required to obtain FDA or other comparable
regulatory approvals. Whether or not we conduct such studies, our drug product candidates may not be considered medically necessary or cost-effective. A third-party payors decision to provide coverage for a drug product does not imply that an
adequate reimbursement rate will be approved. Further, one payors determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Third party
reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

The containment of healthcare costs has become a priority of federal and state governments, and the prices of drugs, including biologics, have been a focus in
this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of
generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Decreases in third-party
reimbursement for our drug product candidate or a decision by a third-party payor to not cover our drug product candidate could reduce physician usage of the drug product candidate and have a material adverse effect on our sales, results of
operations and financial condition.

For example, the ACA, enacted in March 2010, has had, a significant impact on the health care industry. The ACA has
expanded coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, the ACA expanded and increased industry rebates for drugs covered under Medicaid programs and
made changes to the coverage requirements under the Medicare Part D program.

In addition, other legislative changes have been proposed and adopted in the
United States since the ACA was enacted. On August 2, 2011, the Budget Control Act of 2011 among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a
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unable to reach required goals, thereby triggering the legislations automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers
of up to 2% per fiscal year, started in April 2013 and will stay in effect through 2025 unless additional Congressional action is taken. On January 2, 2013, then President Obama signed into law the American Taxpayer Relief Act of 2012,
which, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers
from three to five years.

Some of the provisions of ACA have yet to be fully implemented, while certain provisions have been subject to judicial and
Congressional challenges. In January 2017, Congress voted to adopt a budget resolution for fiscal year 2017, that while not a law, is widely viewed as the first step toward the passage of legislation that would repeal certain aspects of ACA.
Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of ACA that
would impose a fiscal burden on states or a cost, fee, tax, penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Congress also could consider subsequent
legislation to replace elements of ACA that are repealed. Thus, the full impact of ACA, any law replacing elements of it, or the political uncertainty related to any repeal or replacement legislation on our business remains unclear.

In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug
pricing vary widely from country to country.

European Union

In Europe, pricing and reimbursement for pharmaceutical products are not harmonized and fall within the exclusive competence of the national authorities,
provided that basic transparency requirements (such as maximum timelines) defined at the European level are met as set forth in the EU Transparency Directive 89/105/EEC. A Member State may approve a specific price for a medicinal product or it may
instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. For example, in France, effective access to the market assumes that our future products will be reimbursed by
social security. The price of medications is negotiated with the Economic Committee for Health Products, or CEPS.

As a consequence, reimbursement
mechanisms by public national healthcare systems, or private health insurers also vary from country to country. In public healthcare systems, reimbursement is determined by guidelines established by the legislator or a competent national authority.
In general, inclusion of a product in reimbursement schemes is dependent upon proof of the product efficacy, medical need, and economic benefits of the product to patients and the healthcare system in general. Acceptance for reimbursement comes with
cost, use and often volume restrictions, which again vary from country to country.

The pricing and reimbursement level for medicinal products will depend
on the strength of the clinical data set and, as for most novel therapies, restrictions may apply. In most countries, national competent authorities ensure that the prices of registered medicinal products sold in their territory are not excessive.
In making this judgment, they usually compare the proposed national price either to prices of existing treatments and/or to prices of the product at issue in other countries  so-called
international reference pricing  also taking into account the type of treatment (preventive, curative or symptomatic), the degree of innovation, the therapeutic breakthrough, volume of sales, sales forecast, size of the target
population and/or the improvement (including cost savings) over comparable treatments. Given the growing burden of medical treatments on national healthcare budgets, reimbursement and insurance coverage is an important determinant of the
accessibility of medicines.

The various public and private plans, formulary restrictions, reimbursement policies, patient advocacy groups, and
cost-sharing requirements may play a role in determining effective access to the market of our product candidates. The national competent authorities may also use a range of policies and other initiatives intended to influence pharmaceutical
consumption. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our drug product candidates.
Historically, products launched in the European Union do not follow price structures of the United States and generally tend to be priced at a significantly lower level.



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Other Healthcare Laws and Compliance Requirements

Our business operations in the United States and our arrangements with clinical investigators, healthcare providers, consultants, third-party payors and
patients may expose us to broadly applicable federal and state fraud and abuse and other healthcare laws. These laws may impact, among other things, our research, proposed sales, marketing and education programs of our drug product candidates that
obtain marketing approval. The laws that may affect our ability to operate include, among others:



| |  |  | the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration (including any kickback, bribe or rebate),
directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order, or recommendation of, an item, good, facility or service reimbursable under a federal
healthcare program, such as the Medicare and Medicaid programs;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | federal civil and criminal false claims laws and civil monetary penalty laws, which impose penalties and provide for civil whistleblower or qui tam actions against individuals and entities for, among other things,
knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, or making a false statement or record material to payment of a false claim or avoiding,
decreasing, or concealing an obligation to pay money to the federal government, including for example, providing inaccurate billing or coding information to customers or promoting a product off-label;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program,
obtaining money or property of the health care benefit program through false representations, or knowingly and willingly falsifying, concealing or covering up a material fact, making false statements or using or making any false or fraudulent
document in connection with the delivery of or payment for healthcare benefits or services.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the federal Physician Payments Sunshine Act, enacted as part of the ACA, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies to track and annually report to CMS payments and
other transfers of value provided to physicians and teaching hospitals and certain ownership and investment interest held by physicians or their immediate family members in applicable manufacturers and group purchasing organizations;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementing regulations, which imposes certain requirements on covered entities and their business associates relating
to the privacy, security and transmission of individually identifiable health information; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | state law equivalents of each of the above federal laws, such as state anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state
marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements, state laws that require biopharmaceutical companies to comply with the biopharmaceutical industrys voluntary compliance
guidelines and the relevant compliance guidance promulgated by the federal government, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may
not have the same effect as HIPAA, thus complicating compliance efforts.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The ACA broadened the reach of the federal fraud and abuse laws
by, among other things, amending the intent requirement of the federal Anti-Kickback Statute and certain applicable federal criminal healthcare fraud statutes. Pursuant to the statutory amendment, a person or entity no longer needs to have actual
knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal
Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetary penalties statute.

Efforts
to ensure that our business arrangements with third parties will comply with applicable healthcare laws will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with
current or future statutes, regulations or case law involving



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applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be
subject to significant administrative, civil, and/or criminal penalties, damages, fines, disgorgement, individual imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring
of our operations. If the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they also may be subject to administrative, civil, and/or criminal sanctions,
including exclusions from government funded healthcare programs.

Legal Proceedings

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Regardless of the
outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

On
July 8, 2016, following the unsuccessful outcome of the conciliation procedure organized under Swiss laws, a Swiss company named AtonRâ Partners SA formalized its claim against us before the Tribunal of First Instance of Geneva
(Switzerland), or the Tribunal. AtonRâ Partners SA claims the payment of respectively 95.250 EUR and 300.300 USD as alleged broker intermediary commissions in the context of our fund raising of March 3 2015 and our Initial Public Offering
(IPO) on the NASDAQ on June 18, 2015. We fully contest the merits of the claim and the jurisdiction of the Tribunal as Atonrâ was not a party of the bank syndicate of these two placements. The procedure is pending and the Tribunal has not
fixed the judgment date. The decision is subject to appeal in accordance with Swiss laws.

C. Organizational Structure.

The Company and its subsidiaries, or the Group, is made of the following entities as of the end of December 2016. The following diagram illustrates
our corporate structure.



|                                     |  |                                             |  |                   |  |                                                       |                |   |                                                   |  |     |                                                                    |  |  |   |  
|------------------------------------ |  | ------------------------------------------- |  | ----------------- |  | ----------------------------------------------------- | -------------- | - | ------------------------------------------------- |  | --- | ------------------------------------------------------------------ |  |  | - | -
|Name                                 |  | Country ofIncorporationand Place ofBusiness |  | Nature ofBusiness |  | Proportion ofordinaryshares directlyheld by parent(%) |                |   | Proportion of ordinaryshares held by thegroup (%) |  |     | Proportion of ordinaryshares held by non-controlling interests (%) | 
|Celyad SA                            |  | BE                                          |  | Biopharma         |  |                                                       | Parent company |   |                                                   |  |     |                                                                    |  |  |   |  
|Celyad Inc                           |  | US                                          |  | Biopharma         |  |                                                       | 100            | % |                                                   |  | 100 | %                                                                  |  |  | 0 | %
|Biological Manufacturing Services SA |  | BE                                          |  | Biopharma         |  |                                                       | 100            | % |                                                   |  | 100 | %                                                                  |  |  | 0 | %
|Oncyte LLC                           |  | US                                          |  | Biopharma         |  |                                                       | 100            | % |                                                   |  | 100 | %                                                                  |  |  | 0 | %
|CorQuest                             |  | US                                          |  | Medical Device    |  |                                                       | 100            | % |                                                   |  | 100 | %                                                                  |  |  | 0 | %



LOGO

D. Property, Plants and Equipment.

We rent a 2,284 square meter office space from the Axis Parc developer located at the Axis Parc in Mont-Saint-Guibert pursuant to a lease agreement dated
June 24, 2015 as amended from time to time, which expires on June 30 2025. We also rent a 1,120 square meter office and laboratory space from the Axis Parc developer pursuant to a lease agreement dated October 31, 2007, as amended
from time to time, which expires on September 30, 2017. In January 2016, we entered into a 6-year lease agreement for our US corporate offices located in Boston, Massachussets.



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We plan to identify additional facilities in the Flemish region of Belgium to construct our contemplated future
European manufacturing plant. We have committed to maintain our headquarters and registered office in the Walloon region of Belgium and all of our existing activities will continue to be performed in the Walloon region



|ITEM 4A. | UNRESOLVED STAFF COMMENTS.
|-------- | --------------------------

Not applicable.



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|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------

We are a leader in engineered cell therapy treatments with
clinical programs currently targeting indications in immune-oncology.

Our lead drug product candidate is CAR-T NKR-2, an autologous chimeric antigen receptor, or CAR, using NKG2D, an activating receptor of Natural Killer, NK, cells transduced on T-lymphocyte. We successfully completed
in 2016 our first clinical trial for this product candidate, called the CM-CS1 trial. The CM-CS1 trial was a Phase 1 dose escalation study that was conducted solely in
the Dana Farber Cancer Institute in Boston, Massachusetts. It enrolled patients with refractory or relapsed acute myeloid leukemia, or AML, or multiple myeloma, or MM. The safety outcome of the CM-CS1 trial
was presented at the 2016 ASH Annual Meetingin December 2016. No treatment-related safety concerns were reported in all patients of the four doses tested. First signals of efficacy were also identified and reported.

In December 2016, a second Phase 1 clinical trial was initiated in Belgium. The THINK trial (THerapeutic Immunotherapy with
CAR-T NKR-2) is a multinational (EU/US) open-label Phase 1b trial to assess the safety and clinical activity of multiple administrations of autologous CAR-T NKR-2 cells in seven refractory cancers, including five solid tumors (colorectal, ovarian, bladder, triple-negative breast and pancreatic cancers) and two hematological
tumors (AML and MM). The THINK trial will test three dose levels adjusted to body weight: up to 3x10(8), 1x10(9) and 3x10(9) CAR-T NKR-2 cells. At each dose, the
patients will receive three successive administrations, two weeks apart, of CAR-T NKR-2 cells. The dose escalation part of the study will enroll up to 24 patients while
the extension phase would enroll 86 additional patients. The dose escalation part is expected to be completed in the last quarter of 2017.

In July 2016,
we announced the signing of an exclusive licensing agreement with leading Japanese immuno-oncology company, ONO Pharmaceutical Co. Ltd., or ONO, for the development and commercialization of our allogeneic
CAR-T NKR-2 immunotherapy. The license agreement with ONO grants them the exclusive right to develop and commercialize our allogeneic
CAR-T NKR-2 T-Cell immunotherapy in Japan, Korea and Taiwan. In exchange for receiving a license in these countries, ONO will pay
us up to $311.5 million in development and commercial milestones, including an upfront payment of $12.5 million plus double digit royalties on net sales in ONO territories.

Our lead drug product candidate in cardiovascular disease is C-Cure, an autologous cell therapy for the treatment of
patients with ischemic heart failure, or HF. C-Cure was evaluated in CHART-1, a Phase 3 trial conducted in Europe and Israel with 290 patients suffering from advanced
ischemic heart failure. Topline results from the CHART-1 trial were reported in June 2016. Results indicated that the trial was neutral but with a positive trend effect, consistent across all parameters tested
for a substantial definable group of heart failure patients. Although the primary endpoint of the randomized trial was not met, among the entire CHART-1 patient population, a significant subpopulation
representing more than 60% of the overall trial patients, defined by their Left Ventricular End Diastolic Volume, did meet the trial primary endpoint with a P value of 0.015.

Based on the results of the CHART-1 trial, a US trial, or CHART-2, has been
designed to exclusively enroll the subset of patients that met the trial primary endpoint of the CHART-1 trial.

We are currently seeking partners to further develop and commercialize C-Cure.

On November 5, 2014, we acquired CorQuest Medical, Inc., a private U.S. company, or CorQuest, for a single cash payment of 1.5 million and a
potential earn-out payment to the sellers if the intellectual property acquired from CorQuest is sold, in whole or in part, to a third party within ten years of November 5, 2014. The earn-out payment shall be 2.0% of the value of the cash and non-cash consideration from such sale, or Net Revenue, if the Net Revenue is 10.0 million or less, and
4.0% of the Net Revenue, if the Net Revenue is greater than 10.0 million.

On January 21, 2015, we purchased OnCyte, LLC, or OnCyte, a
wholly-owned subsidiary of Celdara Medical, LLC, a privately-held U.S. biotechnology company for an upfront payment of $10.0 million, of which, $6.0 million was paid in cash and $4.0 million was paid in the form of 93,087 of our
ordinary shares. A deferred payment of $5 million will be due upon the enrolment of the first patient of the second cohort of the NKR-T clinical trial. Additional contingent payments with an estimated
fair value of $27.9 million are payable upon the attainment of various clinical and sales milestones. As a result of this transaction we acquired our NKR-T cell drug product candidates and related
technology, including technology licensed from the Trustees of Dartmouth College.



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On May 17 2016, we acquired 100% of Biological Manufacturing Services SA, orBMS. BMS owns GMP laboratories
and had rented its laboratories to us since 2009. Before this acquisition, BMS was considered as a related party to us.

As of December 31, 2016, we
have been funded through the following transactions:



| |  |  | proceeds of 42.0 million from private financing rounds;
| | - |  | --------------------------------------------------------



| |  |  | proceeds of 26.5 million from an initial public offering of our ordinary shares on Euronext Brussels and Euronext Paris in July 2013, or the Euronext IPO;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | proceeds of 25.0 million from a private financing by Medisun International Limited, or Medisun in June 2014;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | proceeds of 31.7 million from a private placement in March 2015;
| | - |  | -----------------------------------------------------------------



| |  |  | proceeds of 88.0 million from our global offering of 1,460,000 ordinary shares, consisting of an underwritten public offering of 1,168,000 ADSs and a concurrent European private placement of 292,000 ordinary
shares, in June 2015.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | proceeds of 23.1 million from non-dilutive financing sources, such as government grants and recoverable cash advances, or RCAs; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------

We have incurred net losses in each year since our inception. Substantially all of our net losses have resulted from costs incurred in connection with our
research and development programs and from general and administration expenses associated with our operations. For the years ended December 31, 2016, 2015 and 2014, we incurred a loss for the year of 23.6 million,
29.1 million and, 16.5 million respectively. As of December 31, 2016, we had a retained loss of 124.0 million. We expect to continue to incur significant expenses and increasing operating losses for the
foreseeable future. We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we:



| |  |  | continue the development of our drug product candidates, including planned and future clinical trials;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | conduct additional research and development for drug product candidate discovery and development;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | seek regulatory approvals for our drug product candidates;
| | - |  | ----------------------------------------------------------



| |  |  | prepare for the potential launch and commercialization of our drug product candidates, if approved;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | establish a sales and marketing infrastructure for the commercialization of our drug product candidates, if approved;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | in-license or acquire additional drug product candidates or technologies;
| | - |  | -------------------------------------------------------------------------



| |  |  | build-out additional manufacturing capabilities; and
| | - |  | ----------------------------------------------------



| |  |  | hire additional personnel, including personnel to support our drug product development and commercialization efforts and operations as a U.S. public company.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

We generate limited revenue from sales of C-Cathez,our
proprietary catheter for injecting cells into the heart. We believe that C-Cathez revenue will remain immaterial in the future as we intend to sell C-Cathez to research laboratories and clinical-stage companies only.

We do not expect to generate material revenue from drug product sales unless and until we successfully complete development of, and obtain marketing approval
for, one or more of our drug product candidates, which we expect will take a number of years and is subject to significant uncertainty. Accordingly, we anticipate that we will need to raise additional capital prior to commercialization of our lead
product candidates. Until such time that we can generate substantial revenue from drug product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, debt financings, government or other third-party
funding, including government grants and RCAs, and collaborations and licensing arrangements. However, we may be unable to raise additional funds or enter into such



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arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development
programs or commercialization efforts or grant to others rights to develop or market drug product candidates that we would otherwise prefer to develop and market ourselves. Failure to receive additional funding could cause us to cease operations, in
part or in full.

Our financial statements for 2014, 2015 and 2016 have been prepared in accordance with International Financial Reporting Standards, or
IFRS, as issued by the International Accounting Standards Board, or IASB.

Financial Operations Overview

A. Operating Results

Our
operating Income consist of revenues and Other Income.

Revenue

For the periods presented in this Annual Report, the revenues we generated were composed of a non-refundable upfront
payment as a result of the ONO agreement was for third-party sales of C-Cathez in 2014, 2015 and 2016. We expect revenue from C-Cathez sales to remain immaterial compared to our operating expenses for the foreseeable future.

Licensing revenues

In 2016, we received the first
milestone payment associated to the License Agreement with ONO Pharmaceuticals. The license agreement with ONO grants them the exclusive right to develop and commercialize our allogeneic CAR-T NKR-2 T-Cell immunotherapy in Japan, Korea and Taiwan. In exchange for receiving a license in these countries, ONO will pay Celyad up to $311.5 million in development and
commercial milestones, including an upfront payment of $12.5 million plus double digit royalties on net sales in ONO territories. The amount booked in 2016 correspond to the upfront payment after deduction of the
non-refundable Japanese withholding taxes and the 15% sub-license fee owned to Darmouth College, the inventor of the CAR-T NKR
platform in-licensed by Celyad in January 2015.

Cost of Sales

For the periods presented in this Annual Report, costs of sales are related to the cost of manufacturing C-Cathez.

We expect the costs of sales related to sales of C-Cathez will remain immaterial compared to our operating expenses for the foreseeable future.

Research and development expenses

Research & development expenses amounted to 27.7 million, 22.8 million and 15.9 million for the years ended
December 31, 2016, 2015 and 2014, respectively, represented 74%, 76% and 76% of our total operating expenses. For the periods presented in this report, research and development expenses gathered all operating expenses of the Group but the
General & &Administration expenses. It included all the costs related to our operations in the following departments; research and development, clinical, manufacturing, regulatory, quality and intellectual property.

With the exception of the C-Cathez development costs
capitalized since May 2012, we expense all research and development costs as they are incurred. A total of 1.1 million development costs of
C-Cathez have been capitalized since May 1, 2012, the month following our receipt of the CE mark for C-Cathez. We may review this policy in the future depending on the outcome of our current development programs.

We utilize our research and development staff and infrastructure resources across projects in our programs and many of our costs historically have not been
specifically attributable to a single project. Accordingly, we cannot state precisely our total costs incurred on a project-by-project basis. In addition, our research
and development expense may vary substantially from period to period based on the timing and scope of our research and development activities, the timing of regulatory approvals or authorizations and the rate of commencement and enrollment of
patients in clinical trials.



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Research and development activities are central to our business. We expect that our other research and
development expenses will continue to grow in the future mostly with the development of drug product candidates from our CAR-T NKR-T cell program. The expected increase
in research and development expenditures will mostly relate to higher personnel costs, outsourcing costs and additional preclinical and clinical studies.

Salaries represented the biggest cost by nature within our operations over the last three years. We at Celyad have the strategy to internalize all operations
when they become material or critical to our operations. We subcontract all one-time projects, or tasks that cannot be taken in house for quality or regulatory purposes. The other important nature of costs in
our operations are the preclinical studies, clinical studies, scale-up and automation of the production processes.

The costs associated to preclinical studies are laboratory supplies and the costs of our outsourced research and development studies and services.

The costs associated to clinical studies comprised the preparation, the conduct and the supervision of our clinical trials. We expect that these expenses will
increase in the near future given the expected clinical trial activities associated with our CAR-T NKR cell drug product candidates. We cannot determine with certainty the duration and completion costs of our
current or future clinical trials of our drug product candidates or if, when, or to what extent we will generate revenue from the commercialization and sale of any of our drug product candidates that obtain regulatory approval. We may never succeed
in achieving regulatory approval for any of our drug product candidates. The duration, costs and timing of clinical trials and development of our drug product candidates will depend on a variety of factors, including:



| |  |  | per patient clinical trial costs;
| | - |  | ---------------------------------



| |  |  | the number of patients that participate in clinical trials;
| | - |  | -----------------------------------------------------------



| |  |  | the drop-out or discontinuation rates of patients;
| | - |  | --------------------------------------------------



| |  |  | the duration of patient follow-up;
| | - |  | ----------------------------------



| |  |  | the scope, rate of progress and expense of our ongoing as well as any additional non-clinical studies, clinical trials and other research and development activities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | clinical trial and early-stage results;
| | - |  | ---------------------------------------



| |  |  | the terms and timing of regulatory approvals;
| | - |  | ---------------------------------------------



| |  |  | the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the ability to market, commercialize and achieve market acceptance of C-Cure or any of our other product candidates.
| | - |  | --------------------------------------------------------------------------------------------------------------------

A change in the outcome of any of these variables with respect to the development of CAR-T NKR-2 or any other drug product candidate that we are developing could mean a significant change in the costs and timing associated with the development of CAR-T NKR-2 or such other drug product candidate. For example, if FDA, European Medicines Agency, or EMA, or other regulatory authority were to require us to conduct additional preclinical studies and clinical trials
beyond those which we currently anticipate will be required for the completion of clinical development of our drug product candidates, or if we experience significant delays in enrollment in any clinical trials, we would be required to spend
significant additional financial resources and time on the completion of the clinical development of the applicable drug product candidate.

Product
candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We have not received regulatory approval from the FDA, EMA or any other regulatory authority to market any of our drug product candidates. The successful
development of our drug product candidates is highly uncertain. Our drug product candidates are tested in numerous preclinical studies for safety, pharmacology and efficacy. We then conduct clinical trials for those drug product candidates that are
determined to be the most promising. We fund these trials ourselves or through non-dilutive funding. As we obtain results from clinical trials, we may elect to discontinue or delay trials for some drug product
candidates in order to focus



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resources on drug product candidates that we believe are more promising. Completion of clinical trials may take several years or more, and the length of time generally varies substantially
according to the type, complexity, novelty and intended use of a drug product candidate. The cost of clinical trials for a particular drug product candidate may vary significantly.

At this time we cannot reasonably estimate the time and costs necessary to complete the development of any of our drug product candidates or the period, if
any, in which we will generate drug product revenue. There are numerous risks and uncertainties associated with drug product development, including:



| |  |  | terms and timing of regulatory approvals and authorizations; and
| | - |  | ----------------------------------------------------------------



| |  |  | the number, the design and the size of the clinical trials required by the regulatory authorities to seek marketing approval.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------

The manufacturing expenses included the costs to manufacture our product candidates, namely CAR-T NKR-2 and C-Cure and the costs associated to the process development of such product candidates, including the scale-up and the
automation of such processes. These costs are mainly comprised of production raw material and supplies, maintenance and calibration charges of equipment and the rental of Good Manufacturing Practices laboratory facilities. Raw materials are the main
component to the current cost of production of CAR-T NKR-2 and will remain as such in the future as they are closely associated to the production of clinical batches.
Most of our raw material suppliers are large companies, and pursuant to our internal procedures, we are trying to have an alternative supplier for each critical material, to limit risk of disruption and price sensitivity.

We lease our production facility from Biological Manufacturing Services SA.

Manufacturing expenses are mostly driven by the number and the size of clinical trials that we conduct on our drug product candidates. We expect these
expenses will remain significant in the near future and will increase as our clinical trials include a greater number of patients and we potentially commence commercialization of our drug product candidates, if approved.

General and administrative expenses

General and
administrative expenses represented 26%, 24% and 24% of our total operating expenses for the years ended December 31, 2016, 2015 and 2014, respectively.

Our general and administrative expenses consist primarily of salaries, fees and other share-based compensation costs for personnel in executive, finance,
accounting and communication functions. It also includes costs related to professional fees for auditors and lawyers and consulting fees not related to research and development operations and fees related to functions that are outsourced by us such
as information technology, or IT. General and administrative expenses are expected to increase in the near future with the expansion of our executive management team to include new personnel responsible for legal, IT, sales and marketing, as well as
with the additional responsibilities related to becoming a U.S. public company.

Other operating income

During the periods presented in this Annual Report, our other operating income is primarily generated from (i) government grants received from the
Regional government, or Walloon Region, in the form of RCAs and (ii) government grants received from the European Commission under the Seventh Framework Program, or FP7.

Recoverable cash advances

RCAs support specific
development programs and are typically granted by regional governmental entities, and in our case, the Walloon Region. RCA contracts consist of three phases: the research phase, the decision phase and the exploitation phase. During the research
phase, we receive funds from the Walloon Region based on statements of expenses.

RCAs are recognized as Other operating income on a
systematic basis over the periods in which we recognize the costs compensated by the RCAs as expenses.

At the end of the research phase, we generally
decide within a period of six months whether or not to exploit the results of the research phase; this phase is known as the decision phase. If we elect to exploit the results achieved under a RCA, we enter the exploitation phase, which may have a
duration of up to ten years. If we elect to exploit the results under an RCA, the relevant RCA becomes contingently refundable, and the company applies the recognition criteria of IAS 39/IFRS9 related to liability recognition, with any amounts being
recognized as a reduction of other operating income in the income statement.



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When we decide not to exploit, or cease to exploit, the results under an RCA, we notify the Walloon Region of our
decision. The RCA related to such decision will no longer be refundable as of the calendar year following such decision, and the research data and intellectual property rights related to such results are transferred to the Walloon Region. Also, when
we decide to renounce our rights to patents which may result from the research, title to such patents are transferred to the Walloon Region.

When we
decide to discontinue the development program for which a financial liability has been accounted for, or decide not to exploit, or cease to exploit, the results of a program previously recognized as a financial liability, the outstanding liability
is derecognized at the end of the period and credited to the income statement as other operating income.

From inception through December 31, 2016,
we have received subsidies RCAs totaling 21.2 million. In 2017 and 2018, we will be required to make exploitation decisions on our remaining outstanding RCAs.

Other government grants

Since inception through
December 31, 2016, we received grants totaling 2.4 million and we expect to continue to apply for grants from FP7 and Walloon Region authorities. These grants are used to partially finance early stage projects such as fundamental
research, applied research and prototype design.

As of the date of this Annual Report, none of the grants received are subject to any conditions. As per
our agreements with these governmental authorities, grants are paid upon our submission of a statement of expenses. We incur project expenses first and ask for partial reimbursement according to the terms of the agreements.

The government grants are recognized in profit or loss on a systematic basis over the periods in which we recognize as expenses the related costs for which
the grants are intended to compensate.

Finance Income

Finance income relates to interest income earned on bank accounts and from currency exchange rate differences. Our cash and cash equivalents have been
deposited primarily in savings and deposit accounts with original maturities of three months or less. Savings and deposit accounts generate a modest amount of interest income. We expect to continue this investment philosophy.

Finance Expenses

Finance expenses relate to
interest payable on shareholder loans and finance leases, as well as interest on overdrafts and current exchange rate differences.

Consolidated
financial data

The following is a summary of our consolidated financial data.

Comparisons for the Years Ended December 31, 2015 and 2014

Revenue



|               |  |                                |   |  |      |  |     | 
|-------------- |  | ------------------------------ | - |  | ---- |  | --- | 
|(000)        |  | For the year endedDecember 31, |  
|               |  | 2015                           |   |  | 2014 | 
|C-Cathez
Sales |  |                                | 3 |  |      |  | 146 | 
|               |  |                                |   |  |      |  |     | 
|               |  |                                | 3 |  |      |  | 146 | 
|               |  |                                |   |  |      |  |     | 

Cost of Sales



|                       |  |                                |    |   |      |  |      |  
|---------------------- |  | ------------------------------ | -- | - | ---- |  | ---- | -
|(000)                |  | For the year endedDecember 31, |   
|                       |  | 2015                           |    |   | 2014 | 
|                       |  |                                |    |   |      |  | 84   |  
|C-Cathez Cost of
Sales |  |                                | (1 | ) |      |  | (115 | )
|                       |  |                                |    |   |      |  |      |  
|Total Cost of Sales    |  |                                | (1 | ) |      |  | (115 | )
|                       |  |                                |    |   |      |  |      |  



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In the year ended December 31, 2015, the total revenue generated through sales of C-Cathez and the cost of sales associated to it were insignificant.

Research and development expenses



|                                        |  |                                |        |  |      |  |        | 
|--------------------------------------- |  | ------------------------------ | ------ |  | ---- |  | ------ | 
|(000)                                 |  | For the year ended December 31 |       
|                                        |  | 2015                           |        |  | 2014 | 
|Salaries                                |  |                                | 5,785  |  |      |  | 4,235  | 
|Travel and living                       |  |                                | 168    |  |      |  | 249    | 
|Mayo research project                   |  |                                |       |  |      |  | 751    | 
|Pre clinical studies                    |  |                                | 2,398  |  |      |  | 274    | 
|Clinical studies                        |  |                                | 6,723  |  |      |  | 4,924  | 
|Delivery systems & dispositifs medicaux |  |                                | 173    |  |      |  | 1      | 
|Consulting fees                         |  |                                | 1,842  |  |      |  | 781    | 
|IP filing and maintenance fees          |  |                                | 763    |  |      |  | 351    | 
|Scale-up & automation                   |  |                                | 642    |  |      |  | 70     | 
|Rent and utilities                      |  |                                | 1,045  |  |      |  | 582    | 
|Depreciation and amortization           |  |                                | 1,033  |  |      |  | 864    | 
|Other costs                             |  |                                | 2,196  |  |      |  | 2,783  | 
|                                        |  |                                |        |  |      |  |        | 
|Total Research and Development expenses |  |                                | 22,767 |  |      |  | 15,865 | 
|                                        |  |                                |        |  |      |  |        | 

The research and development expenses increased by 6.9 million in 2015 compared to 2014. In 2015, most of the
research and development expenses were still related to the development of the cardio programs, namely the clinical development of C-Cure and the preclinical development of
C-Cath and the Corquest platform. In 2015, we only incurred limited research and development costs associated to the CAR-T NKR platform (2.1 million).

The variance with 2014 is mainly explained by the following elements;



| |  |  | additional staff was hired to support the projects within the R&D departments;
| | - |  | ------------------------------------------------------------------------------



| |  |  | preclinical studies on C-Cure and CAR-T NKR-T projects;;
| | - |  | --------------------------------------------------------



| |  |  | the costs of the CHART-1 trial;
| | - |  | -------------------------------



| |  |  | Consultancy fees on CAR-T NKR-T projects included in the Celdara Service Research Agreement;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | The automation of the C-Cure production process;
| | - |  | ------------------------------------------------



| |  |  | Additional rental fees with the labs rented at Rochester (MN, USA); and
| | - |  | -----------------------------------------------------------------------



| |  |  | The development of our IP platform.
| | - |  | -----------------------------------

Amongst these expenses, the preclinical development expenses of the NKR-T platform are expected to increase significantly in the future periods.

General and administrative expenses



|                                 |  |                                |       |   |      |  |       | 
|-------------------------------- |  | ------------------------------ | ----- | - | ---- |  | ----- | 
|(000)                          |  | For the year ended 31 December |      
|                                 |  | 2015                           |       |   | 2014 | 
|Employee expenses                |  |                                | 2,761 |   |      |  | 1,408 | 
|Share-based payment              |  |                                | 796   |   |      |  | 1,528 | 
|Rent                             |  |                                | 617   |   |      |  | 315   | 
|Communication & Marketing        |  |                                | 891   |   |      |  | 394   | 
|Consulting fees                  |  |                                | 1,511 |   |      |  | 741   | 
|Travel & Living                  |  |                                | 509   |   |      |  | 399   | 
|Post employment benefits         |  |                                | (45   | ) |      |  | 28    | 
|Other                            |  |                                | 190   |   |      |  | 203   | 
|                                 |  |                                |       |   |      |  |       | 
|Total General and administration |  |                                | 7,230 |   |      |  | 5,016 | 
|                                 |  |                                |       |   |      |  |       | 



79



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General and administrative expenses increased by 2.2 million in 2015 as compared to 2014. This
increase relates primarily to the strengthening of the management bodies of the Group, and other support functions such as market access, legal, accounting and investor relations. The share-based payments associated with the Group warrant plans
granted to new employees, members of the executive management team and directors amounted to 0.8 million (was 1.5 million in 2014) and does not include yet the new warrant plan issued in November 2015 and effective in January
2016.

Operating Income



|                                                    |  |                                |      |   |      |  |       | 
|--------------------------------------------------- |  | ------------------------------ | ---- | - | ---- |  | ----- | 
|(000)                                             |  | For the year ended December 31 |     
|                                                    |  | 2015                           |      |   | 2014 | 
|Recoverable cash advances (RCAs)                    |  |                                | 222  |   |      |  | 2,791 | 
|Subsidies                                           |  |                                | 412  |   |      |  | 636   | 
|Reversal provision for reimbursement RCA            |  |                                |     |   |      |  | 507   | 
|Additional provision for reimbursement RCA          |  |                                |     |   |      |  |      | 
|Realized gain on contribution IP into joint venture |  |                                | (312 | ) |      |  | 312   | 
|Other                                               |  |                                |     |   |      |  | 167   | 
|                                                    |  |                                |      |   |      |  |       | 
|Total Operating Income                              |  |                                | 322  |   |      |  | 4,413 | 
|                                                    |  |                                |      |   |      |  |       | 

Other operating income and expenses are primarily related to the non-dilutive funding
received from the Walloon Region and the European FP7 funding programs. In 2015, the net amount of the other operating income and expenses decreased by 4.1 million. This variance resulted mainly from the lower proceeds received from RCA
and FP7 contracts (2.8 million) and the deconsolidation of Cardio3 BioSciences Asia (0.6 million). Funding received and notification of funding from RCA and FP7 contracts amounted to 0.6 million in 2015.

Operating loss

As a result of the foregoing, our
operating loss increased by 13.2 million in 2015 as compared to 2014, totaling 29.7 million in 2015.

Financial income and
Financial expenses



|                             |  |                                |     |  |      |  |     | 
|---------------------------- |  | ------------------------------ | --- |  | ---- |  | --- | 
|(000)                      |  | For the year endedDecember 31, |    
|                             |  | 2015                           |     |  | 2014 | 
|Interest finance leases      |  |                                | 10  |  |      |  | 6   | 
|Other finance costs          |  |                                | 90  |  |      |  | 16  | 
|Exchange differences         |  |                                | 135 |  |      |  | 19  | 
|Finance expenses             |  |                                | 236 |  |      |  | 41  | 
|                             |  |                                |     |  |      |  |     | 
|Interest income bank account |  |                                | 352 |  |      |  | 277 | 
|Exchange differences         |  |                                | 190 |  |      |  |    | 
|Finance income               |  |                                | 542 |  |      |  | 277 | 
|                             |  |                                |     |  |      |  |     | 

Financial expenses represent interest paid, bank charges and foreign exchange difference.

Interest income on short term deposits increased significantly from 2014 to 2015, reflecting the increase of our average cash position over the periods,
partially compensated by the decline of the interest rates on such deposits.

Income tax expense

As we incurred losses in all of the relevant periods, we had no taxable income and therefore incurred no corporate taxes.

Loss for the year

As a result of the foregoing,
our loss for the year increased by 12.7 million from 16.5 million in 2014 to 29.1 million in 2015.



80



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Comparisons for the Years Ended December 31, 2016 and 2015

Revenue



|                                              |  |                                |       |  |      |  |   | 
|--------------------------------------------- |  | ------------------------------ | ----- |  | ---- |  | - | 
|(000)                                       |  | For the year endedDecember 31, |      
|                                              |  | 2016                           |       |  | 2015 | 
|Recognition of non-refundable upfront payment |  |                                | 8,440 |  |      |  |  | 
|C-Cathez
Sales                                |  |                                | 83    |  |      |  | 3 | 
|                                              |  |                                |       |  |      |  |   | 
|                                              |  |                                | 8,523 |  |      |  | 3 | 
|                                              |  |                                |       |  |      |  |   | 

Total revenues increased by 8.5 million over 2016. In August 2016, the Group has received a non-refundable upfront payment as a result of the ONO agreement. This upfront payment has been fully recognised upon receipt as there are no performance obligations nor subsequent deliverables associated to the
payment. The non-refundable upfront payment was rather received as a consideration for the sale of licence to ONO. In 2016, the total revenue generated through sales of
C-Cathez was 0.1 million. Insignificant revenue was generated from sales of C-Cathez in 2015.

Cost of Sales



|                       |  |                                |     |   |      |  |    |  
|---------------------- |  | ------------------------------ | --- | - | ---- |  | -- | -
|(000)                |  | For the year endedDecember 31, |    
|                       |  | 2016                           |     |   | 2015 | 
|C-Cathez Cost of
Sales |  |                                | (53 | ) |      |  | (1 | )
|                       |  |                                |     |   |      |  |    |  
|Total Cost of Sales    |  |                                | (53 | ) |      |  | (1 | )
|                       |  |                                |     |   |      |  |    |  

In 2016, the total cost of sales associated with sales of C-Cathez amounted to 0.1 million.

Research and development expenses



|                                        |  |                                |        |  |      |  |        | 
|--------------------------------------- |  | ------------------------------ | ------ |  | ---- |  | ------ | 
|(000)                                 |  | For the year ended December 31 |       
|                                        |  | 2016                           |        |  | 2015 | 
|Salaries                                |  |                                | 8,160  |  |      |  | 5,785  | 
|Travel and living                       |  |                                | 577    |  |      |  | 168    | 
|Pre clinical studies                    |  |                                | 4,650  |  |      |  | 2,398  | 
|Clinical studies                        |  |                                | 4,468  |  |      |  | 6,723  | 
|Delivery systems & dispositifs medicaux |  |                                | 964    |  |      |  | 173    | 
|Consulting fees                         |  |                                | 791    |  |      |  | 1,842  | 
|IP filing and maintenance fees          |  |                                | 799    |  |      |  | 763    | 
|Scale-up & automation                   |  |                                | 4,164  |  |      |  | 642    | 
|Rent and utilities                      |  |                                | 939    |  |      |  | 1,045  | 
|Depreciation and amortization           |  |                                | 1,345  |  |      |  | 1,033  | 
|Other costs                             |  |                                | 817    |  |      |  | 2,196  | 
|                                        |  |                                |        |  |      |  |        | 
|Total Research and Development expenses |  |                                | 27,675 |  |      |  | 22,767 | 
|                                        |  |                                |        |  |      |  |        | 

The research and development expenses increased by 4.9 million in 2016 compared to 2015.

In 2016, the majority of the research and development expenses were for the first time related to the development of the immune-oncology programs, namely CAR- T NKR. The research and development expenses associated to the cardio programs were the follow-up costs of CHART-1 and the
preclinical testing of the Corquest platform, totaling 12.2 million.

The variance with 2015 is mainly explained by the following elements;



| |  |  | additional staff was hired to support the projects within the R&D departments;
| | - |  | ------------------------------------------------------------------------------



| |  |  | additional preclinical studies on CAR-T NKR-T projects, mostly driven by expenses incurred on the allogeneic program;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | The automation of the CAR-T NKR-2 production process;
| | - |  | -----------------------------------------------------



| |  |  | the decrease of the costs of the CHART-1 trial; and
| | - |  | ---------------------------------------------------





| |  |  | the decrease of consultancy fees.
| | - |  | ---------------------------------



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Amongst these expenses, the preclinical development expenses of the NKR-T
platform are expected to increase significantly in the future periods.

General and administrative expenses



|                                 |  |                                |       |   |      |  |       |  
|-------------------------------- |  | ------------------------------ | ----- | - | ---- |  | ----- | -
|(000)                          |  | For the year ended December 31 |      
|                                 |  | 2016                           |       |   | 2015 | 
|Employee expenses                |  |                                | 2,486 |   |      |  | 2,761 |  
|Share-based payment              |  |                                | 2,847 |   |      |  | 796   |  
|Rent                             |  |                                | 791   |   |      |  | 617   |  
|Communication & Marketing        |  |                                | 728   |   |      |  | 891   |  
|Consulting fees                  |  |                                | 2,029 |   |      |  | 1,511 |  
|Travel & Living                  |  |                                | 450   |   |      |  | 509   |  
|Post employment benefits         |  |                                | (24   | ) |      |  | (45   | )
|Depreciation                     |  |                                | 173   |   |      |  |      |  
|Other                            |  |                                | 265   |   |      |  | 190   |  
|                                 |  |                                |       |   |      |  |       |  
|Total General and administration |  |                                | 9,744 |   |      |  | 7,230 |  
|                                 |  |                                |       |   |      |  |       |  

General and administrative expenses increased by 2.5 million compared to 2015. This increase primarily resulted
from the valuation of the share based payment, mainly the warrants plan of November 2015. The new warrant plan issued in December 2016 will be effective in 2017, hence not included in the amount booked at year end 2016. Consulting fees also
increased due to one off consultancy and strategic projects.

Operating Income



|                                                    |  |                                |        |   |      |  |      |  
|--------------------------------------------------- |  | ------------------------------ | ------ | - | ---- |  | ---- | -
|(000)                                             |  | For the year ended December 31 |       
|                                                    |  | 2016                           |        |   | 2015 | 
|Recoverable cash advances (RCAs)                    |  |                                | 2,704  |   |      |  | 222  |  
|Subsidies                                           |  |                                | 124    |   |      |  | 412  |  
|Change of fair value of RCAs                       |  |                                | 3,891  |   |      |  |     |  
|Reversal provision for reimbursement RCA            |  |                                | (1,737 | ) |      |  |     |  
|Realized gain on contribution IP into joint venture |  |                                |       |   |      |  | (312 | )
|Change of fair value of contingent liability        |  |                                | (1,634 | ) |      |  |      |  
|Other                                               |  |                                | (8     | ) |      |  |     |  
|                                                    |  |                                |        |   |      |  |      |  
|Total Operating Income                              |  |                                | 3,340  |   |      |  | 322  |  
|                                                    |  |                                |        |   |      |  |      |  

Other operating income and expenses are primarily related to the non-dilutive funding
received from the Walloon Region and the European FP7 funding programs. In 2016, the net amount of the other operating income and expenses increased by 3.0 million.

This variance resulted mainly from the additional proceeds received on RCAs and FP7 contracts and the non-cash
entries posted on the RCAs to reflected to fair value of such liabilities.

Operating loss

As a result of the foregoing, our operating loss decreased by 4.1 million in 2016 as compared to 2015, totaling 25.6 million in 2016.

Financial income and Financial expenses



|                             |  |                                |       |  |      |  |     | 
|---------------------------- |  | ------------------------------ | ----- |  | ---- |  | --- | 
|(000)                      |  | For the year endedDecember 31, |      
|                             |  | 2016                           |       |  | 2015 | 
|Interest finance leases      |  |                                | 19    |  |      |  | 10  | 
|Interest on RCAs            |  |                                | 53    |  |      |  |    | 
|Other finance costs          |  |                                | 37    |  |      |  | 90  | 
|Exchange differences         |  |                                | 98    |  |      |  | 135 | 
|Finance expenses             |  |                                | 207   |  |      |  | 236 | 
|                             |  |                                |       |  |      |  |     | 
|Interest income bank account |  |                                | 1,413 |  |      |  | 352 | 
|Exchange differences         |  |                                | 791   |  |      |  | 190 | 
|Finance income               |  |                                | 2,204 |  |      |  | 542 | 
|                             |  |                                |       |  |      |  |     | 



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Financial expenses represent interest paid, bank charges and foreign exchange difference.

Interest income on short term deposits increased significantly from 2016 to 2015, reflecting the increase of our average cash position over the periods,
partially compensated by the decline of the interest rates on such deposits.

Income tax expense

As we incurred losses in all of the relevant periods, we had no taxable income and therefore incurred no corporate taxes.

Loss for the year

As a result of the foregoing,
our loss for the year decreased by 5.5 million from 29.1 million in 2015 to 23.6 
million in 2016.

B. LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations since inception through several private placements of equity securities, several contributions in kind, an IPO on Euronext
Brussels and Paris, an IPO on the Nasdaq and non-dilutive governmental support. As at December 31 2016, the total gross proceeds of the placement of our securities amounted to 187 million (net
proceeds of 172 million) and, the total non-dilutive funding amounted to 23.1 million.

The table
hereunder summarizes our sources and uses of cash for the years ended December 31, 2016, 2015 and 2014.



|                                                      |  |                    |         |   |      |  |         |      |  |  |         |  
|----------------------------------------------------- |  | ------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                      |  | At end of December |         |   |      | 
|Summary for Item 5.B. Liquidity and Capital Resources |  | 2016               |         |   | 2015 |  |         | 2014 | 
|                                                      |  |                    |         |   |     |  |         |     | 
|Cash used in operating activities                     |  |                    | (24,692 | ) |      |  | (27,303 | )    |  |  | (17,415 | )
|Cash used in investing activities                     |  |                    | (30,157 | ) |      |  | (10,691 | )    |  |  | (1,768  | )
|Cash flows provided by financing activities           |  |                    | 3,031   |   |      |  | 110,535 |      |  |  | 27,758  |  
|Net increase in cash and cash equivalents             |  |                    | (51,818 | ) |      |  | 72,541  |      |  |  | 8,575   |  

Comparison between 2015 and 2014

In 2015, the increase of the net cash used in our operations (9.9 million) is explained by the recruitment pace of the
CHART-1 patient, by the initiation of our immune-oncology development plans, by the increase of our G&A expenses to manage the growth of our operations and the governance of the company and by an accrual
related to the deferred payment owned to Celdara Medical ($5 million due when the 1st patient of the 2nd cohort is enrolled in
the NKR-2 trial).

The cash used in investing activities peaked in 2015 with the acquisition of Oncyte LLC
($15 million, of which $10 million was paid in 2015, $6 million in cash and $4 million in shares) and acquisition of short term investment for 5 million. On 21 January 2015, the Company acquired 100% of the share
capital of Oncyte LLC from Celdara Medical LLC in exchange for a cash consideration of USD 11 million (upfront of $6 million and deferred payment of $5 million) and 93,087 new shares of Celyad for a total value of USD 4 million, or
(EUR 3,451,680). The fair value of the 93,087 ordinary shares issued as part of the consideration paid for Oncyte LLC was based on a share price of EUR 37.08, the share price at the acquisition.



83



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##### Table of Contents

Oncyte LLC is the company holding the NKR-T Cell portfolio of
clinical-stage immuno-oncology assets. The portfolio includes three autologous NKR-T Cell cell therapy products and an allogeneic T-Cell platform, targeting a broad
range of cancer indications. CAR T-Cell immuno-oncology represents one of the most promising cancer treatment areas today.

Investment in tangible assets amounted to 0.8 million in 2015, compared to 0.6 million in 2014.

Our net cash flows provided from our financing activities increased to 111 million in 2015 from 28 million in 2014, mainly as a result
of a private placement made in March 2015 collecting 31.7 million gross proceeds and a 88 million global offering of both ADSs on the Nasdaq and ordinary shares on Euronext Brussels and Paris.

We have incurred net losses in each year since our inception. Substantially all of our net losses resulted from costs incurred in connection with our
development programs and from general & administrative expenses associated with our operations.

We have not incurred any bank debt except some
financial leases which are recorded on the balance sheet for a total amount of 0.6 Mio.

Comparison between 2016 and 2015

In 2016, the decrease of the net cash used in our operations (2.6 million) is explained by the decrease of the
CHART-1 costs, the increase of the CAR-T NKR development costs, the increase of the process automation costs and by the increase of the proceeds received from our
license agreement.

The cash used in investing activities increased significantly over 2016 as a consequence of the acquisition of Biological
Manufacturing Services SA for 1.6 million), the capital expenditures made mainly in our new corporate offices (1.7 million) and the net amount invested in short term deposits (26.9 million).

The acquisition of BMS was accounted for as an asset deal. The fair value of the assets acquired is concentrated in one identifiable asset, i.e. the GMP
laboratories. The difference between the purchase price and the net assets of BMS at the date of acquisition is then allocated entirely to the Property, Plant and Equipment.

Our net cash flows provided from our financing activities decreased by 107.5 million in 2016 from 110.5 million in 2015. There
were no capital increase performed in 2016. The net proceeds received from non-dilutive fundings increased by 1.5 million) over 2016,

We have incurred net losses in each year since our inception. Substantially all of our net losses resulted from costs incurred in connection with our
development programs and from general & administrative expenses associated with our operations.

We have financed our capital expenditures of
2016 with a bank loan and with financial leases which are recorded on the balance sheet at year end 2016 1.5 million.

Cash and Funding
Sources

Over the last three years, we obtained new financing mostly through the issuance of our shares. A summary of our financing activities is as
follows:



|                |  |       |         |  |                |  |         |                |  |  |       |  |  |  |     | 
|--------------- |  | ----- | ------- |  | -------------- |  | ------- | -------------- |  |  | ----- |  |  |  | --- | 
|(000)         |  | Total |         |  | Equity capital |  |         | Finance leases |  |  | Loans | 
|2014            |  |       | 25,749  |  |                |  | 25,305  |                |  |  | 444   |  |  |  |    | 
|2015            |  |       | 120,380 |  |                |  | 119,929 |                |  |  | 451   |  |  |  |    | 
|2016            |  |       | 1,165   |  |                |  |        |                |  |  | 371   |  |  |  | 794 | 
|                |  |       |         |  |                |  |         |                |  |  |       |  |  |  |     | 
|Total Financing |  |       | 147,294 |  |                |  | 145,234 |                |  |  | 1,266 |  |  |  | 794 | 
|                |  |       |         |  |                |  |         |                |  |  |       |  |  |  |     | 

In 2016, we contracted a bank loan to partially finance the leasehold improvements made in our new corporate offices. Some of
our capital expenditures related to laboratory and office equipment are financed with 3-year maturity finance leases.



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Amounts due to the Walloon Region, booked as advances repayable, at the end of 2016 correspond to funding
received under several RCAs, dedicated to supporting specific development programs related to CAR-NKR-T platform, C-Cure and C-Cathez.

In March 2015, we completed a 31.7 million
capital increase via a private placement subscribed by qualified institutional investors in the United States and Europe at a price of 44.50 per share. In June 2015, we completed a 88.0 million global offering on Nasdaq and on
Euronext Brussels and Euronext Paris at a price of 60.25 per share. Our capital was also increased by way of exercise of warrants. Over three different exercise periods, 6;749 warrants were exercised resulting in the issuance of 6;749 new
shares. Our capital and share premium were therefore increased by 0.2 million. Also, we financed part of our capital expenditures with a bank lease of 0.5 million.

During 2014, our capital was increased in June 2014 by way of a capital increase of 25.0 million, represented by 568,180 new shares. Our capital
was also increased by way of exercise of warrants. Over four different exercise periods, 139,415 warrants were exercised resulting in the issuance of 139,415 new shares. Our capital and share premium were therefore increased respectively by
0.5 million each. Also, we financed part of our capital expenditures with a bank lease of 0.4 million.

Over the course of 2013, we
conducted a private placement of 7.0 million in May 2013 and closed our Euronext IPO in July 2013 for proceeds of 26.5 million. Net proceeds from these capital increases amounted to 30.6 million. We also recognized a
new cash advance of 1.0 million from a RCA from the Walloon Region as we decided to exploit a RCA related to C-Cathez development.

The movements of the advances repayable recorded in 2016, 2015 and 2014 are summarized in the table below:



|                                                      |  |  |        |  
|----------------------------------------------------- |  |  | ------ | -
|(000)                                               |  |  |       
|Balance of January 1, 2014                            |  |  | 12,501 |  
|+ liability recognition                               |  |  | 2,534  |  
|-repayments                                           |  |  | (272   | )
|+/- other transactions including change of fair value |  |  | (3,208 | )
|                                                      |  |  |        |  
|Balance at December 31, 2014                          |  |  | 11,555 |  
|                                                      |  |  |        |  
|Balance of January 1, 2015                            |  |  | 11,555 |  
|                                                      |  |  |        |  
|+ liability recognition                               |  |  | 1,392  |  
|-repayments                                           |  |  | (529   | )
|+/- other transactions including change of fair value |  |  | (1,036 | )
|                                                      |  |  |        |  
|Balance at December 31, 2015                          |  |  | 11,382 |  
|                                                      |  |  |        |  
|Balance of January 1, 2016                            |  |  | 11,382 |  
|                                                      |  |  |        |  
|+ liability recognition                               |  |  |       |  
|- repayments                                         |  |  | (842   | )
|+/- other transactions including change of fair value |  |  | (2,102 | )
|Balance at December 31, 2016                          |  |  | 8,438  |  
|                                                      |  |  |        |  

Capital Expenditures

We do not capitalize our research and development expenses until we receive marketing authorization for the applicable product candidate. As of end of 2016,
all clinical, research and development expenditures related to the development of CAR-T NKR and C-Cure and are accounted for as operating expenses.

Our capital expenditures were 1.8 million, 0.8 million and 0.6 million for the years ended December 31, 2016, 2015 and
2014, respectively. In 2017, we anticipate new capital expenditures in our laboratories.

We plan to finance most of these expenses through a new finance
lease.

In addition, we completed the acquisition of (i) CorQuest in November 2014, resulting in recognition of patent intangible assets of
1.5 million, and (ii) Oncyte LLC in January 2015 resulting in recognition of a goodwill of 1.0 million and an in-process R&D of 38.3 million and (iii) Biological
Manufacturing Services SA in May 2014 resulting in recognition of additional PPE for 1.3 million.



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|                                 |  |      |        |  |                    |  |        |      |  |  |        | 
|-------------------------------- |  | ---- | ------ |  | ------------------ |  | ------ | ---- |  |  | ------ | 
|(000)                          |  |      |        |  | As of December 31, | 
|                                 |  | 2016 |        |  | 2015               |  |        | 2014 | 
|Intangible assets                |  |      | 49,566 |  |                    |  | 48,789 |      |  |  | 10,266 | 
|Property, plant and equipment    |  |      | 3,563  |  |                    |  | 1,136  |      |  |  | 598    | 
|Other long term financial assets |  |      | 311    |  |                    |  | 180    |      |  |  | 109    | 
|                                 |  |      |        |  |                    |  |        |      |  |  |        | 
|Total                            |  |      | 53,440 |  |                    |  | 50,105 |      |  |  | 10,973 | 
|                                 |  |      |        |  |                    |  |        |      |  |  |        | 

Operating Capital Requirements

We believe that our existing cash and cash equivalents, and short term investments will enable us to fund our operating expenses and capital expenditure
requirements, based on the current scope of our activities, until mid 2019. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. In any event, we will require
additional capital to pursue preclinical and clinical activities, obtain regulatory approval for, and to commercialize our drug product candidates.

Until
we can generate a sufficient amount of revenue from our drug product candidates, if ever, we expect to finance our operating activities through a combination of equity offerings, debt financings, government, including RCAs and subsidies, or other
third-party financings and collaborations. Additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay,
scale back or discontinue the development or commercialization of one or more of our drug product candidates. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing
shareholders, increased fixed payment obligations and these securities may have rights senior to those of our ordinary shares. If we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair
our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct
our business. Any of these events could significantly harm our business, financial condition and prospects.

Our present and future funding requirements
will depend on many factors, including, among other things:



| |  |  | the size, progress, timing and completion of our clinical trials for any current or future drug product candidates, including C-Cure and
CAR-T NKR-2;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the number of potential new drug product candidates we identify and decide to develop;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the costs involved in filing patent applications, maintaining and enforcing patents or defending against claims or infringements raised by third parties;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the time and costs involved in obtaining regulatory approval for drug products and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these drug
products; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount of revenue, if any, we may derive either directly or in the form of royalty payments from future potential partnership agreements on our technology platforms.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For more information as to the risks associated with our future funding needs, see the section of this report entitled Risk factors.

JOBS Act Exemptions

We qualify as an emerging
growth company as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:



| |  |  | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to the extent that we no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and (2) exemptions from
the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an
emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of (1) the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; (2) the date we qualify as a
large accelerated filer, with at least $700 million of equity securities; (3) the issuance, in any three-year period, by our company of more than $1.0 billion in non-convertible debt
securities held by non-affiliates; and (4) December 31, 2020. We may choose to take advantage of some but not all of these exemptions. For example, Section 107 of the JOBS Act provides that an
emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Given that we currently report and expect to continue to report under
IFRS as issued by the IASB, we have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is
required by the IASB. We have taken advantage of reduced reporting requirements in this Annual Report on Form 20-F. Accordingly, the information contained herein may be different than the information you
receive from other public companies in which you hold equity securities.

C. Research and Development

For a discussion of our research and development activities, see Item 4.B  Business Overview and Item 5.A  Operating Results.

D. Trend Information

For
a discussion of trends, see Item 4.B Business Overview, Item 5A Operating Results and Item 5B Liquidity and Capital resources.

E. Off-Balance Sheet Arrangements



| |  |  | During the periods presented, we did not and do not currently have any off-balance sheet arrangements as defined under SEC rules, such as relationships with unconsolidated
entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Guarantees: Celyad keeps a few deposits (311k) to guarantee rental & payroll office
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Contingent liabilities: see hereunder.
| | - |  | --------------------------------------

F. Tabular Disclosure of Contractual
Obligations

Contractual Obligations and Commitments

The following table discloses aggregate information about material contractual obligations and periods in which payments were due as of December 31, 2016.
Future events could cause actual payments to differ from these estimates.



|                                             |  |       |        |  |           |  |       |              |  |  |            |  |  |            |       |  |  |  |       | 
|-------------------------------------------- |  | ----- | ------ |  | --------- |  | ----- | ------------ |  |  | ---------- |  |  | ---------- | ----- |  |  |  | ----- | 
|                                             |  |       |        |  | Less than |  |       | One to three |  |  | Three to   |  |  | More than  |      
|(000)                                      |  | Total |        |  | one year  |  |       | years        |  |  | five years |  |  | five years |      
|As of December 31, 2016                      |  |       |        |  |           |  |       |              |  |  |            |  |  |            |       |  |  |  |       | 
|Finance leases                               |  |       | 735    |  |           |  | 354   |              |  |  | 315        |  |  |            | 66    |  |  |  |       | 
|Bank loan                                    |  |       | 743    |  |           |  | 207   |              |  |  | 417        |  |  |            | 119   |  |  |  |       | 
|Operating leases                             |  |       | 3,377  |  |           |  | 456   |              |  |  | 945        |  |  |            | 733   |  |  |  | 1,244 | 
|Pension obligations                          |  |       | 204    |  |           |  |       |              |  |  |            |  |  |            |       |  |  |  | 204   | 
|Advances repayable (current and non-current) |  |       | 8,438  |  |           |  | 1,108 |              |  |  | 1,812      |  |  |            | 1,598 |  |  |  | 3,920 | 
|                                             |  |       |        |  |          
|Total                                        |  |       | 13,497 |  |           |  | 2,125 |              |  |  | 3,489      |  |  |            | 2,516 |  |  |  | 5,368 | 



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G. Safe Harbor.

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and as
defined in the Private Securities Litigation Reform Act of 1995. See Special Note Regarding Forward-Looking Statements.



|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------

A. Directors and Senior
Management.

As provided by Article 521 of the Belgian Company Code, the Company is managed by a Board of Directors acting as a collegiate body.
The Board of Directors role is to pursue the long-term success of the Company by providing entrepreneurial leadership and enabling risks to be assessed and managed. The Board of Directors should decide on the Companys values and
strategy, its risk preference and key policies. The Board of Directors should ensure that the necessary leadership, financial and human resources are in place for the Company to meet its objectives.

The Company has opted for a one-tier governance structure. As provided by Article 522 of the Belgian Company Code, the
Board of Directors is the ultimate decision-making body in the Company, except with respect to those areas that are reserved by law or by the Companys articles of association to the Shareholders Meeting.

The Companys articles of association state that the number of directors of the Company, who may be natural persons or legal entities and who need not be
shareholders, must be at least five. At least half of the members of the Board of Directors must be non-executive directors and at least three of them must be independent directors.

A meeting of the Board of Directors is validly constituted if at least half of its members are present in person or represented at the meeting. If this quorum
is not met, a new board meeting may be convened by any director to deliberate and decide on the matters on the agenda of the board meeting for which a quorum was not met, provided that at least two members are present. Meetings of the Board of
Directors are convened by the Chairman of the Board or the Chief Financial Officer or the Chief Legal Officer, whenever the interest of the Company so requires. In principle, the Board of Directors will meet at least four times per year.

The Chairman of the Board of Directors shall have a casting vote on matters submitted to the Board of Directors in the event of a tied vote, save if the Board
of Directors is composed of two members.

At the date of this Report, the Board of Directors consists of 9 members, one of which is an executive director
(as a member of the Executive Management Team) and 8 of which are non-executive directors, including four independent directors. In accordance with Art 96, §2 6° of the Belgian Company Code (hereafter
BCC), it is the willingness of the Company to aim for, in a reasonable timeframe, that a third of the Board member are of different sex.



|                                                                                |  |                       |  |          |  |                                                             |  |                                                                                  
|------------------------------------------------------------------------------- |  | --------------------- |  | -------- |  | ----------------------------------------------------------- |  | ---------------------------------------------------------------------------------
|Name                                                                            |  | Position              |  | Term [1] |  | Business Address                                            |  | Board Committee Membership                                                       
|Michel Lussier                                                                  |  | Chairman              |  | 2020     |  | 3661 Valley Centre Dr. San Diego CA 92130,
USA              |  | Member of the Nomination and Remuneration Committee                              
|                                                                                |  |                       |  |         
|LSS Consulting SPRL represented by its permanent representative Christian Homsy |  | Executivedirector     |  | 2020     |  | Chaussée de Louvain 574A, 1380
Lasne, Belgium               |  |                                                                                  
|                                                                                |  |                       |  |         
|William Wijns[2]                                                                |  | Non-executivedirector |  | 2016     |  | Moorselbaan 219, 9300 Aalst,
Belgium                        |  |                                                                                  
|                                                                                |  |                       |  |         
|Serge Goblet                                                                    |  | Non-executivedirector |  | 2020     |  | Chaussée de Waterloo 1589D, 1180
Brussels, Belgium          |  |                                                                                  
|                                                                                |  |                       |  |         
|Chris Buyse                                                                     |  | Independentdirector   |  | 2020     |  | Baillet Latourlei 119A, 2930 Brasschaat,
Belgium            |  | Member of the Nomination and Remuneration Committee
Member of the Audit Committee
|                                                                                |  |                       |  |         
|Rudy Dekeyser                                                                   |  | Independentdirector   |  | 2020     |  | Klein Nazareth 12, 98401 De Pinte,
Belgium                  |  | Member of the Nomination and Remuneration Committee
Member of the Audit Committee
|                                                                                |  |                       |  |         
|Debasish Roychowdhury                                                           |  | Independentdirector   |  | 2019     |  | 79 Laconia Street Lexington
MA 02420 USA                    |  |                                                                                  
|                                                                                |  |                       |  |         
|Chris De Jonghe                                                                 |  | Non-executivedirector |  | 2017     |  | Jan Davidlaan 50, 2630 Aartselaar,
Belgium                  |  | Member of the Audit Committee                                                    
|                                                                                |  |                       |  |         
|Hanspeter Spek                                                                  |  | Independentdirector   |  | 2018     |  | Square Latour Maubourg, 75007 Paris,
France                 |  | Member of the Nomination and Remuneration Committee                              
|                                                                                |  |                       |  |         
|Danny Wong[3]                                                                   |  | Non-executivedirector |  | 2016     |  | 25/F Octa Tower, 8 Lam Chak Street, Kowloon
Bay, Hong KKong |  |                                                                                  
|                                                                                |  |                       |  |         
|TOLEFI SA represented by its permanent representative Serge Goblet              |  | Non-executivedirector |  | 2018     |  | 27 Drève de Carloo 1180 Bruxelles,
Belgium                  |  |                                                                                  



|[1] | The term of the mandate of the director will expire immediately after the Annual Shareholders Meeting held in the year set forth next to the directors name, except Debasish Roychowdhury which mandate shall expire
on 30 January 2019.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|[2] | William Wijns resigned on 1st April 2016.
|--- | -----------------------------------------

|[3] | Danny Wong resigned on 4 August 2016.
|--- | -------------------------------------

The following paragraphs contain brief biographies of each of the
directors, or in case of legal entities being director, their permanent representatives, with an indication of other relevant mandates as member of administrative, management or supervisory bodies in other companies during the previous five years.

Michel Lussier has served as Chairman of the board of directors of the Company since 2007 and is also a
co-founder of the Company. Mr. Lussier was also the Chairman of the board of directors and co-founder of the Companys predecessor entity, Cardio3 SA, until
2008. Mr. Lussier recently founded Medpole Ltd, the North American satellite of MedPole SA, a European incubator for medical technology start-up companies located in Belgium, and serves as the Chief
Executive Officer for the group. In this capacity, he is a managing director of Fjord Ventures, a Laguna Hills, California based medical technology accelerator / incubator. Since May 2014, Mr. Lussier has served as the Chief Executive Officer
of Metronom Health Inc, an early stage medical device company created by Fjord Ventures, developing a continuous glucose monitoring system. Prior to that, from 2002 to 2013, he worked for Volcano Corporation, where he served in a number of
positions, most recently as President, Clinical and Scientific Affairs from 2012 to 2013, and prior to that from 2007 to 2012, Group President, Advanced Imaging Systems, Global Clinical & Scientific Affairs and General Management of Europe,
Africa and the Middle East. Mr. Lussier obtained a Bachelor of Sciences degree in Electrical Engineering and Masters degree in Biomedical Engineering at the University of Montreal. He also holds an MBA from INSEAD (European Institute of
Business Administration), France. In addition to serving on our board of directors, he also serves on the boards of directors of several early stage medical devices companies.

Christian Homsy (permanent representative of LSS consulting SPRL),has served as a member of the board of directors of the Company
since 2007 and has been Chief Executive Officer (CEO) of Celyad since its foundation. Christian Homsy obtained his Medical Doctorate at the University of Louvain and holds an MBA from the IMD in Lausanne (Switzerland). Christian gained his business
experience in senior research and development, marketing, business development and sales positions at Guidant Corporation, a leading medical device company active in the treatment of cardiovascular disease. He was also founder of Guidant Institute
for Therapy Development, a landmark facility for physician and health care professionals education that gained international recognition and praise. Before joining Celyad, Christian Homsy was General Manager of Medpole, a European incubator
dedicated to initiating the European operations for start-up companies in the medical device or biotechnology fields. He also holds a director mandate in Medpole SA.



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Serge Goblet (permanent representative of Tolefi SA)has served as a member of the board of directors of
the Company since 2008. He holds a Master Degree in Business and Consular Sciences from ICHEC, Belgium and has many years of international experience as director in Belgian and foreign companies. He is the managing director of TOLEFI SA, a Belgian
holding company and holds director mandates in subsidiaries of TOLEFI. Serge has two voting rights at our board of directors, one in his own name and one on behalf of TOLEFI, as a permanent representative

Chris Buysehas served as a member of the board of directors of the Company since 2008. He brings more than 25 years of international financial
expertise and experience in introducing best financial management practices. He is currently Managing Director of FUND+, a fund that invests in innovative Belgian Life Sciences companies, Between August 2006 and June 2014, Mr. Buyse served as
the Chief Financial Officer and board member of ThromboGenics NV, a leading biotech company that is listed on NYSE Euronext Brussels. Before joining ThromboGenics, he was the Chief Financial Officer of the Belgian biotech company CropDesign, where
he coordinated the acquisition by BASF in July 2006. Prior to joining CropDesign he was financial manager of WorldCom/MCI Belux, a European subsidiary of one of the worlds largest telecommunication companies and he was also the Chief Financial
Officer and interim Chief Executive Officer of Keyware Technologies. Mr. Buyse holds a master degree in applied economic sciences from the University of Antwerp and an MBA from Vlerick School of Management in Gent. He currently serves, in his
own name or as permanent representative of a management company, as member of the board of directors of the following publicly and privately held companies: Bone Therapeutics SA, Iteos SA, Bioxodes SA, Bio Incubator NV, Immo David NV, Pinnacle
Investments SA, CreaBuild NV, Sofia BVBA, Pienter-Jan BVBA, Life Sciences Research Partners VZW (a shareholder of the Company) and Keyware Technologies NV.

Rudy Dekeyserhas served as a member of the board of directors of the Company since 2007. Since 2012 Rudy is managing partner of the LSP Health
Economics Fund, a private equity fund investing in late stage European and North American health care companies. Prior to joining LSP, Rudy has been managing director of VIB (Flanders Institute for Biotechnology), where he was also responsible for
the intellectual property portfolio, business development and new venture activities. He obtained a Ph.D. in molecular biology at the University Ghent. He holds non-executive director positions in Curetis AG,
Sequana Medical AG and Remynd NV, and held non-executive director positions in Devgen NV, CropDesign NV, Ablynx NV, Actogenix NV, Pronota NV, Flandersbio VZW, Bioincubator Leuven NV and Multiplicom NV. He is a
co-founder of ASTP (the European associations of technology transfer managers) and Chairman of EMBLEM (EMBLs business arm). Rudy has been advisor to several seed and venture capital funds and to multiple
regional and international committees on innovation.

Debasish Roychowdhuryhas served as a member of the board of directors of the Company since
2015. Debasish is a medical oncologist with over 15 years of comprehensive pharmaceutical industry experience and 14 years of patient care and academic research. In the pharmaceutical industry, Debasish held multiple positions of growing
responsibility respectively at Eli Lilly, GSK and Sanofi, with direct therapeutic area experience mostly in oncology and hematology. Based in Boston, Massachusetts, Debasish is now using his extensive experience and global network to advise
companies, organizations, and institutions in the biomedical field.

Chris De Jonghehas served as a member of the board of directors of the
Company since 2013. Sheis Head of Life Sciences & Care at PMV (ParticipatieMaatschappij Vlaanderen). She was first Licensing manager then Business development manager at VIB (Flanders Institute for Biotechnology), before
joining PMV initially as Senior investment manager in January 2013. Since August 2013 she joined the Group Management Committee, responsible for daily management at PMV. She obtained a PhD in Biochemistry and a Bachelor degree in Laws at the
University of Antwerp. She is member of the board of directors of Agrosavfe, Confo Therapeutics, Fast Forward Pharmaceuticals, MyCartis, ViroVet, Biotech Fund Flanders, LSP V, Vesalius Biocapital I & II and FlandersBio. She is a
member of FlandersBio and IFB network.

Hanspeter Spekhas served as a member of the board of directors of the Company since 2014. He started
his career at Pfizer where, over more than 10 years and after a thorough comprehensive training in commercial general management, he held positions of increasing responsibility. Hanspeter then joined Sanofi as Marketing Director and rose through the
organization to become the Executive Vice President International in 2000. When Sanofi and Aventis merged in 2004, he took on the responsibility of Executive Vice President Operations. In 2009, he was nominated President Global Operations. Hanspeter
retired from Sanofi in mid-2013. He has since joined Advent International, Boston, as an Operating Partner for Healthcare and serves as Board Member of Genpact, New York.



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The Executive Management Team

The Executive Management Team consists of the Chief Executive Officer (CEO, who is the chairman of the Executive Management team), the Chief
Financial Officer (CFO), the Chief Operating Officer, the Chief Legal Officer, the Vice President Business Development & IP, the Vice President Clinical Development and Medical Affairs,
the Vice President Operations, the Vice President Research & Development.

The Executive Management Team discusses and
consults with the Board of Directors and advises the Board of Directors on the day-to-day management of the Company in accordance with the Companys values,
strategy, general policy and budget, as determined by the Board of Directors.

Each member of the Executive Management Team has been made individually
responsible for certain aspects of the day-to-day management of the Company and its business (in the case of the CEO, by way of delegation by the Board of Directors; in
the case of the other member of the Executive Management Team, by way of delegation by the CEO). The further tasks for which the Executive Management Team is responsible are described in greater detail in the terms of reference of the Executive
Management Team as set out in the Companys corporate governance charter.

The members of the Executive Management Team are appointed and may be
dismissed by the Board of Directors at any time. The Board of Directors appoints them on the basis of the recommendations of the Nomination and Remuneration Committee, which shall also assist the Board of Directors on the remuneration policy of the
members of the Executive Management Team, and their individual remunerations.

The remuneration, duration and conditions of dismissal of Executive
Management Team members will be governed by the agreement entered into between the Company and each member of the Executive Management Team in respect of their function within the Company.

In accordance with Schedule C, Section F, subsection 7 of the CGC, all agreements with members of the Executive Management Team entered into on or after
1 July 2009 must refer to the criteria to be taken into account when determining variable remuneration and will contain specific provisions relating to early termination. In principle, the Executive Management Team meets every month. Additional
meetings may be convened at any time by the Chairman of the Executive Management Team or at the request of two of its members. The Executive Management Team will constitute a quorum when all members have been invited and the majority of the members
are present or represented at the meeting. Absent members may grant a power of attorney to another member of the Executive Management Team. Members may attend the meeting physically or by telephone or video conference. The absent members must be
notified of the discussions in their absence by the Chairman (or the Company Secretary, if the Executive Management Team has appointed a Company Secretary from among its members).

The members of the Executive Management Team will provide the Board of Directors with information in a timely manner, if possible in writing, on all facts and
developments concerning the Company which the Board of Directors may need in order to function as required and to properly carry out its duties. The CEO (or, in the event that the CEO is not able to attend the Board of Directors meeting, the
CFO or, in the event that the CFO is not able to attend the Board of Directors meeting, another representative of the Executive Management Team) will report at every ordinary meeting of the Board of Directors on the material deliberations of
the previous meeting(s) of the Executive Management Team.



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The current members of the Executive Management Team are listed in the table below.



|                                                    |  |                                       |  |              
|--------------------------------------------------- |  | ------------------------------------- |  | -------------
|Name                                                |  | Function                              |  | Year of birth
|LSS Consulting SPRL, represented by Christian Homsy |  | Chief Executive Officer               |  | 1958         
|PaJe SPRL, represented by Patrick Jeanmart          |  | Chief Financial Officer               |  | 1972         
|KNCL SPRL, represented by Jean-Pierre Latere        |  | Chief Operating Officer               |  | 1975         
|NandaDevi SPRL, represented by Philippe Dechamps    |  | Chief Legal Officer                   |  | 1970         
|Georges Rawadi                                      |  | Vice President Business Development   |  | 1967         
|Dieter Hauwaerts                                    |  | Vice President Operations             |  | 1973         
|ImXense SPRL, represented by Frederic Lehmann       |  | Vice President Immuno-oncolgy         |  | 1964         
|David Gilham                                        |  | Vice President Research & Development |  | 1965         

The following paragraphs contain brief biographies of each of the members of the Executive Management Team or in case of legal
entities being a member of the Executive Management Team or key manager, their permanent representatives.

Christian Homsy (representative of LSS
Consulting SPRL), CEO  reference is made to ITEM 6.A. Directors and Senior Management.

Patrick Jeanmart (representative of PaJe SPRL),
has served as the Chief Financial Officer of the Company since September 2007. Prior to joining the Company, Mr. Jeanmart worked for IBA Group (Ion Beam Applications, Belgium) for six years where he held a number of senior financial management
positions within the corporate organization and several IBA subsidiaries located in Belgium, Italy, UK and the U.S. Between January 2004 and 2007, he acted as Vice President of Finance of IBA Molecular. He also holds the position of Chief Financial
Officer at Medpole SA and at Biological Manufacturing Services SA. Mr. Jeanmart obtained a Master in Economics from the University of Namur, Belgium.

Jean-Pierre Latere (representative of KNCL SPRL), has previously acted as Vice President of Regenerative Medicine and Medical Devices franchise. Since
January 2017 he serves as Chief Operating Officer in charge of program management, manufacturing, quality, clinical operations and regulatory affairs. He leads the effort to further strengthen the organization as Celyad grows as a leader in
immuno-oncology. He started his career as a Research Associate at the Michigan State University in the US. Following that assignment, he moved to the Johnson & Johnson group where he held various positions, from Scientist to Senior
Scientist. He then joined the Company in 2008 as Project Manager Delivery System and left the company in 2012 in the position of Senior Director Business Development. Prior to joining the Company, Mr. Latere served as Beauty Care and Healthcare
Market Global Leader at Dow Corning. Mr. Latere holds a PhD in Chemistry from the University of Liège, Belgium.

Philippe Dechamps
(representative of NandaDevi SPRL),has served as Chief Legal Officer since September 2016. Mr. Dechamps started his legal career as an associate in Brussels with the law firm Linklaters De Bandt from 1994 to 1998. He left private practice
in 1998 and until 2003, he served as an in-house counsel at Solvay Group, the Belgian pharmaceutical and chemical company, to assist the company in its turnaround through several M&A operations in Europe,
India and Far-East Asia. In 2003, he took over the position of Legal Director at Guidant, the US company formerly active in the medical devices business before its acquisition by Boston Scientific and Abbott
Laboratories in 2005. Within Abbott, Mr. Dechamps took over responsibility for the legal affairs of Abbott Vascular International outside of the United States. In 2008, Mr. Dechamps joined Delhaize Group taking responsibility for the legal
and government affairs in Europe and Asia, before becoming Group General Counsel and Secretary to the Board of Directors in 2015. In this position, he piloted the legal strategy to merge Delhaize Group with Royal Ahold in July 2016.
Mr. Dechamps earned law degrees from the Université Catholique de Louvain (UCL) and Vrije Universiteit Brussel (VUB), and a Masters of Law (LL.M) from Harvard University.

Georges Rawadi, has served as Vice President Business Development and Intellectual Property since March 2016 and prior to that he has service as Vice
President Business Development since June 2014. Prior



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to joining the Company, Dr. Rawadi served as Vice President Business Development with Cellectis. He previously held business development management positions at Galapagos, ProStrakan France
and Sanofi-Aventis France, and conducted consultancy assignments in Business Development and Alliance Management. His work included all aspects and stages of business development, driving several projects from target identification and negotiation
to closing deals. He holds a Ph.D. in Microbiology from the Pierre et Marie Curie University (France), and a Masters in Management and Strategy in the Health Industry from the ESSEC Business School.

Dieter Hauwaerts,has served as the Vice President Operations since November 2015. Mr. Hauwaerts is responsible for all development, manufacturing
and supply chain activities in EU and US. Prior to joining the Company, he worked as Director Manufacturing for TiGenix (Belgium) where he was part of the team obtaining first approval of an ATMP in Europe, and headed construction of a state-of-the art commercial cell therapy facility. Before, he also held various positions in the quality and supply chain organization of Janssen Pharmaceutica (Belgium)
and conducted research on microbial genetics at the University of Leuven. Mr. Hauwaerts holds an MSc in chemical engineering from the University of Leuven, Belgium.

Frédéric Lehmann (representative of ImXense SPRL),has served as the Vice President Clinical Development & Medical Affairs since
July 2016 and prior to that he has served as the Vice President Immuno-Oncology Since September 2015. Dr. Lehmann is a physician by training, specialized in hematology and oncology. Dr. Lehmann has extensive experience in oncology drug
development spanning early to late phase, including clinical trial design, translational research, regulatory interactions, and clinical risk management. He started his academic career at the Ludwig Institute for Cancer Research in Brussels,
followed by a position at the Institute Jules Bordet. He then moved to the European Organization for Research and Treatment of Cancer (EORTC) as Medical Advisor. Dr. Lehmann began his corporate career at GlaxoSmithKline, where he led the
early worldwide clinical development program for the Companys cancer vaccines and went on to lead the research and development incubator for cancer immunotherapeutics.

David Gilham,has served as Vice President Research and Development since September 2016. Prior to joining the Company, Mr. Gilham was a Reader
and Group Leader within the Manchester Cancer Research Centre at the University of Manchester, UK leading a research group of 15 scientists in the area of cellular immunotherapy. Mr. Gilham obtained his Ph.D from the University of Dundee in
1998 in Molecular Pharmacology under the supervision of Professor Roland Wolf, OBE. After a short post-doctoral position at the University of Bristol, Mr. Gilham moved to the University of Manchester with Professor Robert Hawkins to establish
translational research activity in the field of engineered cellular therapy. The group has carried out several clinical trials of CAR-T cells of which Mr. Gilham has been Lead scientific advisor and led
several European framework programs bringing together researchers from all over Europe (ATTACK and ATTRACT programs). In 2010, along with Professor Hawkins and other colleagues, Mr. Gilham co-founded
Cellular Therapeutics, a cell production company based in Manchester. He has published more than 60 peer reviewed articles and further book chapters and reviews. He has also sat on many review boards and charity grant committees and consulted for
several biotechs and pharma concerning immune cell therapies.

B. Compensation of Directors and Executive Management Team

The aggregate compensation paid and benefits in kind granted by us to the current members of our executive management team and directors, including
share-based compensation, for the year ended December 31, 2016, was 2,4 million. For the year ended December 31, 2016, 35,000 of the amounts set aside or accrued to provide pension, retirement or similar benefits to our
employees was attributable to members of our executive management team.

For a discussion of our employment arrangements with members of our executive
management team and consulting arrangement with our directors, see the section of this Annual Report titled Certain relationships and related party transactions-Agreements with Our Directors and Members of our Executive Management Team.
For more information regarding warrant grants, see the section of this report titled Warrant Plans.

Except the arrangements described
in the section of this Annual Report titled Certain relationships and related party transactions-Agreements with Our Directors and Members of our Executive Management Team, there are no arrangements or understanding between us and any of
our other executive officers or directors providing for benefits upon termination of their employment, other than as required by applicable law.



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There is no agreements or contracts between the directors and the members of the Executive Management Team and
the company or any of its subsidiaries providing for benefits for the directors upon termination of employment or services agreements in place that provide for benefits upon termination of employment.

Compensation of our Board of Directors

The remuneration
of our directors and the grant of warrants to our directors is submitted by our board of directors (following advice from the Nomination and Remuneration Committee) for approval to the general shareholders meeting and is only implemented after
such approval. The aggregate compensation paid and benefits in kind granted by us to our current directors, including share-based compensation, for the year ended December 31, 2016, was 355,000.

The procedure for establishing the remuneration policy and setting remuneration for members of our board of directors is determined by our board of directors
on the basis of proposals from the Nomination and Remuneration Committee, taking into account relevant benchmarks from the biotechnology industry.

On
November 5, 2015, the Extraordinary Shareholders Meeting approved a remuneration and compensation scheme for the chairman, the independent directors and non-executive directors. This scheme was applicable
as from November 2015. The remuneration package was made up of a fixed annual fee of 40,000 for the chairman and 30,000 for the other independent directors. The fee was supplemented with a fixed annual fee of 10,000 for membership
of each committee of the Board of Directors, to be increased by 5,000 in case the relevant director chairs the Nomination and Remuneration Committee or the Audit Committee.

On 9 May 2016, the Extraordinary Shareholders meeting approved a new remuneration and compensation scheme for the
non-executive directors. The remuneration package is made up of fixed annual fee of 10,000 for non-executive directors, supplemented by a fxed annual fee of
10,000 for the Chairman. The annual fee is supplemented by a 5,000 fee for any non-executive directors covering the participation to the four ordinary board of directors meetings. Any
participation to an extraordinary board of directors meetings gives right to a supplemental fee of 5,000 EUR. This remuneration package is also supplemented with a fixed annual fee of 15,000 for membership of each committee of the
Board of Directors, to be increased by 5,000 in case the relevant director chairs the Nomination and Remuneration Committee or the Audit Committee. Finally, an extraordinary fee of 3,000 is granted to
non-executive directors in case of appointment of such directors, on request of the CEO and with prior approval of the Board of directors, for specific missions requiring the presence of the concerned
director. This scheme is applicable directly after the General Meeting of Shareholders of May 9, 2016. The remuneration granted to directors during year 2016 is the consequence of both applications of (i) remuneration and compensation
scheme adopted in November 2015 and (ii) the new plan adopted in May 2016. Apart from the above remuneration for non-executive directors, all directors are entitled to company warrants and a reimbursement
of out-of-pocket expenses actually incurred as a result of participation in meetings of the Board of Directors.

On the advice of the Nomination and Remuneration Committee, the board of directors may propose to the shareholders meeting to grant options or warrants
in order to attract or retain non-executive directors with the most relevant skills, knowledge and expertise. Insofar as this grant of options or warrants comprises variable remuneration under Article 554 of
the Belgian Company Code, this remuneration shall be submitted for approval to the next annual general shareholders meeting.

The directors mandate
may be terminated ad nutum (at any time) without any form of compensation.

No loans or guarantees were given to members of the board of directors during
the year ended December 31, 2016.

There are no employment or service agreements that provide for notice periods or indemnities between us and
members of the board of directors who are not a member of the executive management team. In respect of the members of the board of directors who are a member of the executive management team, reference is made to the section Executive
Management Team here below.



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The following table sets forth the fees received by our non-executive
directors for the performance of their mandate as a board member, during the year ended December 31, 2016:



|                                                                     |  |               |         | 
|-------------------------------------------------------------------- |  | ------------- | ------- | 
|Name                                                                 |  | FeesEarned() |        
|Michel Lussier                                                       |  |               | 78,750  | 
|Serge Goblet                                                         |  |               | 37,500  | 
|Chris Buyse                                                          |  |               | 73,750  | 
|Debasish Roychowdhury                                                |  |               | 41,250  | 
|Hanspeter Spek                                                       |  |               | 55,000  | 
|Rudy Dekeyser                                                        |  |               | 68,750  | 
|Tolefi SA, represented by its permanent representative, Serge Goblet |  |               |        | 
|Danny Wong                                                           |  |               |        | 
|William Wijns                                                        |  |               |        | 
|Chris De Jonghe                                                      |  |               |        | 
|Total                                                                |  |               | 355,000 | 

LSS Consulting SPRL, represented by Christian Homsy does not receive any specific or additional remuneration for his service
on our board of directors, as this is included in his total remuneration package in his capacity as Chief Executive Officer. For more information regarding LSS Consulting SPRLs compensation, see the section of this Annual Report titled
Compensation of Members of the Executive Management Team.

The table below provides an overview as of December 31, 2016 of the
warrants held by the non-executive directors.



|                     |  |                                            |        |  |                               |  |       |                         |  |                
|-------------------- |  | ------------------------------------------ | ------ |  | ----------------------------- |  | ----- | ----------------------- |  | ---------------
|                     |  | Warrant Awards                            
|Name                 |  | Number ofOrdinary SharesUnderlyingWarrants |        |  | WarrantExercisePrice in euros |  |       | Warrant
Expiration
Date
|Michel Lussier       |  |                                            | 400    |  |                               |  | 35.36 |                         |  | May 5, 2016    
|Hanspeter Spek       |  |                                            | 5,000  |  |                               |  | 35.79 |                         |  | May 5, 2019    
|TOLEFI SA            |  |                                            | 2,504  |  |                               |  | 35.36 |                         |  | May 5, 2016    
|Michel Lussier       |  |                                            | 10,000 |  |                               |  | 34.65 |                         |  | November 5 2020
|Chris Buyse          |  |                                            | 10,000 |  |                               |  | 34.65 |                         |  | November 5 2020
|Rudy Dekeyser        |  |                                            | 10,000 |  |                               |  | 34.65 |                         |  | November 5 2020
|Hanspeter Spek       |  |                                            | 10,000 |  |                               |  | 34.65 |                         |  | November 5 2020
|Debasish Roychowdhuy |  |                                            | 10,000 |  |                               |  | 34.65 |                         |  | November 5 2020
|                     |  |                                            |       
|Total                |  |                                            | 57,904 |  |                               |  |       |                         |  |                



Compensation of Members of the Executive Management Team

The compensation of the members of our executive management team is determined by our board of directors based on the recommendations by our Nomination and
Remuneration Committee.

The remuneration of the members of our executive management team consists of different components:



| |  |  | Fixed remuneration: a basic fixed fee designed to fit responsibilities, relevant experience and competences, in line with market rates for equivalent positions. The amount of fixed remuneration is evaluated and
determined by the board of directors every year.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Short term variable remuneration: members of the executive management team may be entitled to a yearly bonus, given the level of achievement of the criteria set out in the corporate objective for that year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Incentive plan: warrants have been granted and may be granted in the future, to the members of the executive management team. For a description of the main characteristics of our warrant plans, see the section of this
Annual report titled Warrant Plans.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Other: Members of the executive management team with an employee contract with us entitle them to our pension, company car and payments for invalidity and healthcare cover and other fringe benefits of non-material value.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

No loans, quasi-loans or other guarantees were granted to members of our executive
management team during the year ended on December 31, 2016.

The following table sets forth information regarding compensation earned by LSS
Consulting SPRL, represented by Christian Homsy, our Chief Executive Officer, during the year ended December 31, 2016.



|             |  |                          |     | 
|------------ |  | ------------------------ | --- | 
|             |  | Compensation (in kEuros) |    
|Fixed fee    |  |                          | 426 | 
|Variable fee |  |                          | 136 | 
|Total        |  |                          | 562 | 

Mr. Homsy was not granted warrants in 2016, neither exercised warrants in 2016.

The following table sets forth information concerning the aggregate compensation earned during the year ended December 31, 2016 by the other members of
our executive management team, including the CEO.



|                                   |  |                          |       | 
|---------------------------------- |  | ------------------------ | ----- | 
|                                   |  | Compensation (in kEuros) |      
|Fixed remuneration (gross)         |  |                          | 597   | 
|Variable remuneration (short term) |  |                          | 138   | 
|Fixed fee                          |  |                          | 1,698 | 
|Variable fee                       |  |                          | 356   | 
|Pension/Life                       |  |                          | 35    | 
|Other benefits                     |  |                          | 103   | 
|Total                              |  |                          | 2,927 | 

The table below provides an overview as of December 31, 2016 of the warrants held by the members of our executive
management team.



|                       |  |                                            |         |  |                               |  |       |                       |  |  |                  | 
|---------------------- |  | ------------------------------------------ | ------- |  | ----------------------------- |  | ----- | --------------------- |  |  | ---------------- | 
|                       |  | Warrant Awards                             |        
|Name                   |  | Number ofOrdinary SharesUnderlyingWarrants |         |  | WarrantExercisePrice in euros |  |       | WarrantExpirationDate | 
|Christian Homsy [1]    |  |                                            | 112,000 |  |                               |  | 2.64  |                       |  |  | May 6, 2018      | 
|                       |  |                                            | 200     |  |                               |  | 35.36 |                       |  |  | May 5, 2016      | 
|                       |  |                                            | 40,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2020 | 
|Patrick Jeanmart [2]   |  |                                            | 56,000  |  |                               |  | 2.64  |                       |  |  | May 6, 2018      | 
|                       |  |                                            | 25      |  |                               |  | 35.36 |                       |  |  | May 5, 2016      | 
|                       |  |                                            | 20,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2020 | 
|George Rawadi          |  |                                            | 7,500   |  |                               |  | 39.22 |                       |  |  | May 5, 2024      | 
|                       |  |                                            | 10,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2025 | 
|Dieter Hauwaerts       |  |                                            | 5,000   |  |                               |  | 33.49 |                       |  |  | May 5, 2024      | 
|                       |  |                                            | 10,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2025 | 
|Frédéric Lehmann [3]   |  |                                            | 20,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2020 | 
|Jean-Pierre Latere [4] |  |                                            | 20,000  |  |                               |  | 34.65 |                       |  |  | November 5, 2020 | 
|David Gilham           |  |                                            | 10,000  |  |                               |  | 15.90 |                       |  |  | November 5, 2025 | 



|[1] | Christian Homsy holds these warrants in person, whereby he is the representative of LSS Consulting SPRL, his management company, which has been appointed as Chief Executive Officer.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[2] | Patrick Jeanmart holds these warrants in person, whereby he is the representative of PaJe SPRL, his management company, which has been appointed as Chief Financial Officer.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[3] | Frederic Lehmann holds these warrants in person, whereby he is the representative of ImXense SPRL, his management company, which has been appointed as Vice President Clinical Development & Medical Affairs.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|[4] | Jean-Pierre Latere holds these warrants in person, whereby he is the representative of KNCL SPRL, his management company, which has been appointed as Chief Operating Officer.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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C. Board Practices

Our board of directors can set up specialized committees to analyze specific issues and advise the board of directors on those issues.

The committees are advisory bodies only and the decision-making remains within the collegial responsibility of the board of directors. The board of directors
determines the terms of service of each committee with respect to the organization, procedures, policies and activities of the committee.

Our board of
directors has set up and appointed an Audit Committee and a Nomination and Remuneration Committee. The composition and function of all of our committees will comply with all applicable requirements of the Belgian Company Code, the Belgian Corporate
Governance Code, the Exchange Act, the applicable rules of the NASDAQ Stock Market and SEC rules and regulations.

Audit Committee

Our board of directors has established an audit committee. Our Audit Committee consists of three members: Chris Buyse, Rudy Dekeyser and Chris De Jonghe.

Our board of directors has determined that all members of the Audit Committee are independent under Rule 10A-3 of the
Exchange Act and the applicable rules of the NASDAQ Stock Market and that Chris Buyse qualifies as an Audit Committee financial expert as defined under the Exchange Act.

The role of our Audit Committee is to ensure the effectiveness of our internal control and risk management systems, the internal audit (if any) and its
effectiveness and the statutory audit of the annual and consolidated accounts, and to review and monitor the independence of the external auditor, in particular regarding the provision of additional services to the company. The Audit Committee
reports regularly to our board of directors on the exercise of its functions. It informs our board of directors about all areas in which action or improvement is necessary in its opinion and produces recommendations concerning the necessary steps
that need to be taken. The audit review and the reporting on that review cover us and our subsidiaries as a whole. The members of the Audit Committee are entitled to receive all information which they need for the performance of their function, from
our board of directors, executive management team and employees. Every member of the Audit Committee shall exercise this right in consultation with the chairman of the Audit Committee.

Our Audit Committees duties and responsibilities to carry out its purposes include, among others: our financial reporting, internal controls and risk
management, and our internal and external audit process. These tasks are further described in the Audit Committee charter as set out in our corporate governance charter and in Article 526bis of the Belgian Company Code.

The Audit Committee holds a minimum of four meetings a year.

Nomination and Remuneration Committee

Our Nomination and
Remuneration Committee consists of four members: Michel Lussier (Chairman), Chris Buyse, Rudy Dekeyser and Hanspeter Spek.

Our board of directors has
determined that all members of the Nomination and Remuneration Committee are independent under the applicable rules of the NASDAQ Stock Market.

The role
of the Nomination and Remuneration Committee is to assist the board of directors in all matters:



| |  |  | relating to the selection and recommendation of qualified candidates for membership of the board of directors;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | relating to the nomination of the CEO;
| | - |  | --------------------------------------



| |  |  | relating to the nomination of the members of the executive management team, other than the CEO, upon proposal by the CEO;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | relating to the remuneration of independent directors;
| | - |  | ------------------------------------------------------



| |  |  | relating to the remuneration of the CEO;
| | - |  | ----------------------------------------



| |  |  | relating to the remuneration of the members of the executive management team, other than the CEO, upon proposal by the CEO; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | on which the board of directors or the chairman of the board of directors requests the Nomination and Remuneration Committees advice.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



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Additionally, with regard to matters relating to remuneration, except for those areas that are reserved by law to
the board of directors, the nomination and remuneration committee will at least have the following tasks:



| |  |  | preparing the remuneration report (which is to be included in the board of directors corporate governance statement); and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | explaining its remuneration report at the annual shareholders meeting.
| | - |  | -----------------------------------------------------------------------

The committees tasks are
further described in the Nomination and Remuneration Committee charter as set out in our corporate governance charter and Article 526quater of the Belgian Company Code.

D. Employees

As of
December 31, 2016, we employed 78.60 full-time equivalent (incl. 6.6 part-time employees) and 6 senior managers. Twenty-one of our employees have either an M.D. or a Ph.D. We have never had a work
stoppage, and none of our employees is represented by a labor organization or under any collective-bargaining arrangements. We consider our employee relations to be good.

A split of our employees by main department and geography for the years ended December 31, 2016, 2015 and 2014 was as follows:



|                                     |  |                    |    |  |      |  |    |      |  |  |    | 
|------------------------------------ |  | ------------------ | -- |  | ---- |  | -- | ---- |  |  | -- | 
|                                     |  | At end of December |   
|                                     |  | 2014               |    |  | 2015 |  |    | 2016 | 
|By function:                         |  |                    |    |  |      |  |    |      |  |  |    | 
|Clinical & Regulatory, IP, Marketing |  |                    | 9  |  |      |  | 11 |      |  |  | 15 | 
|Research & Development               |  |                    | 13 |  |      |  | 19 |      |  |  | 29 | 
|Manufacturing /Quality               |  |                    | 49 |  |      |  | 42 |      |  |  | 31 | 
|General Administration               |  |                    | 11 |  |      |  | 16 |      |  |  | 13 | 
|Total                                |  |                    | 82 |  |      |  | 88 |      |  |  | 88 | 
|                                     |  |                    |   
|By Geography:                        |  |                    |    |  |      |  |    |      |  |  |    | 
|Belgium                              |  |                    | 81 |  |      |  | 85 |      |  |  | 83 | 
|United States                        |  |                    | 1  |  |      |  | 3  |      |  |  | 5  | 
|Total                                |  |                    | 82 |  |      |  | 88 |      |  |  | 88 | 

E. Share Ownership

For information regarding the share ownership of our directors and executive officers, see Item 6.BCompensation and Item 7.AMajor
Shareholders.



|ITEM 7 | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------ | -------------------------------------------------

The committees tasks
are further described in the Nomination and Remuneration Committee charter as set out in our corporate governance charter and Article 526quater of the Belgian Company Code.

A. Major shareholders

The
following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2017 for:



| |  |  | each person who is known by us to own beneficially more than 5% of our outstanding ordinary shares;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | each member of our board of directors;
| | - |  | --------------------------------------



| |  |  | each member of our executive management team; and
| | - |  | -------------------------------------------------



| |  |  | all members of our board of directors and executive management team as a group.
| | - |  | -------------------------------------------------------------------------------

Beneficial ownership is
determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The percentage ownership
information shown in the table is based upon 9,520,853 ordinary shares outstanding as of February 28, 2017.



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Except as otherwise indicated, all of the shares reflected in the table are ordinary shares and all persons
listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

In computing the number of ordinary shares beneficially owned by a person and the percentage ownership of that person, we deemed outstanding ordinary
shares subject to warrants held by that person that are immediately exercisable. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. The information in the table below is
based on information known to us or ascertained by us from public filings made by the shareholders. Except as otherwise indicated in the table below, addresses of the directors, members of the executive management team and named beneficial owners
are in care of Rue Edouard Belin 2, 1435 Mont-Saint-Guibert, Belgium.



|                                                       |  |                               |  |            |       |  
|------------------------------------------------------ |  | ----------------------------- |  | ---------- | ----- | -
|NAME OF BENEFICIAL OWNER                               |  | SHARES BENEFICIALLTY OWNED ON | 
|5%Shareholders                                         |  | Number                        |  | Percentage |      
|TOLEFI SA [1]                                          |  | 2,267,844                     |  |            | 23.82 | %
|Directors and Members of the Executive Management Team |  |                               |  |            |       |  
|Michel Lussier                                         |  | 155,870 Shares
8,000 ADR      |  |            | 1.72  | %
|Christian Homsy [2]/LSS Consulting SPRL                |  | 122,000 shares
3,000 ADR      |  |            | 1.31  | %
|Patrick Jeanmart                                       |  | 62,000                        |  |            | 0.65  | %
|Jean-Pierre Latere                                     |  | 20,000                        |  |            | 0.21  | %
|All directors and executive officers as a group.       |  | 2,638,714                     |  |            | 27.72 | %



|[1] | TOLEFI SA is represented by its permanent representative, Serge Goblet.
|--- | -----------------------------------------------------------------------

|[2] | Includes 8,000 shares held by Karim Homsy, Mr. Homsys son, 6,000 shares held by Bastian Homsy, Mr. Homsys son, and 8,000 shares held by Benjamin Homsy, Mr. Homsys son.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Each of our shareholders is entitled to one vote per ordinary share. None of the holders of our shares will have different voting rights from other holders of
shares after the closing of the global offering. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

As of January 31, 2017, assuming that all of our ordinary shares represented by ADSs are held by residents of the United States, we estimate that
approximately 5.44% of our outstanding ordinary shares were held in the United States by 1 registered holder of record. The actual number of holders is greater than these numbers of record holders, and includes beneficial owners whose ADSs are held
in street name by brokers and other nominees. This number of holders of record also does not include holders whose shares may be held in trust by other entities.



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B. Related Party Transactions.

Since January 1, 2016, we have engaged in the following transactions with our directors, executive officers and holders of more than five percent
(5%) of our outstanding voting securities and their affiliates, which we refer to as our related-parties.

Transactions with Our Principal
Shareholders

Service Agreement with Biological Manufacturing Services SA

In April 2011, we entered into an agreement for the provision of services for production of cardiac cells with Biological Manufacturing Services SA, or BMS, a
service provider in the biotechnology sector that operates clean rooms on its site located at Rue Edouard Belin 12, 1435 Mont-Saint-Guibert, Belgium. Under this agreement, BMS provides us with support, services and provision of assets for the
production our products, including making clean rooms available to us for our exclusive use. TOLEFI SA, of which Serge Goblet is the managing director, owns 50% of BMS. Patrick Jeanmart, our Chief Financial Officer, also holds the position of CFO at
BMS.

This service agreement was terminated on April 30, 2016. The total annual services fee paid by us to BMS was EUR 299,000 EUR in 2015 and EUR
98,984 in 2016.

Agreements with Our Directors and Members of our Executive Management Team

Employment Arrangements

We have entered into employment
agreements with the below members of our executive management team:

Georges Rawadi

On April 2, 2014, we entered into an employment agreement with Mr. Rawadi, our Vice President Business Development, with an effective date as of
June 2, 2014. Pursuant to this agreement, Mr. Rawadi is entitled to an annual base salary, and is also eligible to receive a bonus capped at 50% of his annual compensation, determined in full discretion by the board of directors on the
basis of the Mr. Rawadis performance and our overall performance. Mr. Rawadi is also eligible to receive warrants.

Dieter Hauwaerts

On September 23, 2014, we entered into an employment agreement with Mr. Hauwaerts, our Vice President Operations, with an effective date as
of December 1, 2014. Pursuant to this agreement, Mr. Hauwaert is entitled to an annual base salary and is also eligible to receive a bonus capped at 30% of his annual compensation, determined in full discretion by the board of directors on
the basis of the Mr. Hauwaerts performance and our overall performance. Mr. Hauwaerts is also eligible to receive warrants.

David Gilham

On September 12, 2016, we entered into an employment agreement with Mr. David Gilham, our Vice President research and development, with an
effective date as of September 12, 2016. Pursuant to this agreement, Mr. Gilham is entitled to an annual base salary and is also eligible to receive a bonus capped at 30% of his annual compensation, determined in full discretion by the
board of directors on the basis of the Mr. Gilham performance and our overall performance. Mr. Gilham is also eligible to receive warrants.

Consulting Arrangements

We have entered into consulting
agreements with the below members of our executive management team.

Christian Homsy

On January 23, 2014, we contracted with LSS Consulting SPRL, permanently represented by Mr. Homsy. Under this new agreement, Mr. Homsy is
entitled to an annual base fee. Mr. Homsy is also eligible to receive warrants and a bonus capped at 40% of his annual base fee, determined in full discretion by the board of directors on the basis of the Mr. Homsys performance and
our overall performance.



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Patrick Jeanmart

On January 7, 2008, we entered into a management services agreement with Patrick Jeanmart SPRL, represented by Patrick Jeanmart, our Chief Financial
Officer. Under this agreement, Mr. Jeanmart is entitled to an annual base fee. Mr. Jeanmart is also eligible for a bonus capped at 30% of his annual base fee, determined in full discretion by the board of directors on the basis of the
Mr. Jeanmarts performance and our overall performance.

Jean-Pierre Latere

On December 7, 2015, we entered into a management services agreement with KNCL SPRL, represented by Jean-Pierre Latere, our Chief Operating Officer. Under
this agreement, Mr. Latere is entitled to an annual base fee. Mr. Latere is also eligible for a bonus capped at 30% of his annual base fee, determined in full discretion by the board of directors on the basis of Mr. Lateres
performance and our overall performance.

Philippe Dechamps

On May 20, 2016, we entered into a management services agreement with NandaDevi SPRL, represented by Philippe Dechamps, our Chief Legal Officer. Under
this agreement, Mr. Dechamps is entitled to an annual base fee. Mr. Dechamps is also eligible for a bonus capped at 30% of his annual base fee, determined in full discretion by the board of directors on the basis of
Mr. Dechampss performance and our overall performance.

Director and Executive Management Team Compensation

See Item 6BCompensation of Directors and Executive Management Team for information regarding compensation of directors and members of our executive
management team.

Warrants

Since our
inception, we have granted warrants to certain of our directors and members of our executive management team. See Compensation of Directors and Executive Management Team for information regarding warrants issued to members of our
executive management team and directors.

Indemnification Agreements

In connection with the global offering, we entered into indemnification agreements with each of our directors and members of our executive management team.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Medisun

Cardio3 BioSciences Asia Ltd was a joint venture created in July 2014 with Medisun International, a financial partner and shareholder of the Group. The joint
venture aimed to initiate the clinical development of C-Cure and further commercialize C-Cure in Greater China. Until August 2015, the Group owned 40% of the shares of
Cardio3 BioSciences Asia Ltd. The Group had no commitments relating to its joint venture and there are no contingent liabilities relating to the Groups interest in the joint venture.

Pursuant the terms of the new license agreement executed in August 2015, Celyad SA sold all of its shares on Cardio3 BioSciences Asia to Medisun for 1.
Cardio3 BioSciences Asia was deconsolidated from the Group financial statements as of June 30, 2015.

Related-Party Transactions Policy

Article 524 of the Belgian Company Code provides for a special procedure that applies to intragroup or related party transactions with affiliates. The
procedure applies to decisions or transactions between us and our affiliates that are not one of our subsidiaries. Prior to any such decision or transaction, our board of directors must appoint a special committee consisting of three independent
directors, assisted by one or more independent experts. This committee must assess the business advantages and disadvantages of the decision or transaction, quantify its financial consequences and determine whether the decision or transaction causes
a disadvantage to us that is manifestly illegitimate in view of our policy. If the committee determines that the decision or transaction is not illegitimate but will prejudice us, it must analyze the advantages and disadvantages of such decision or
transaction and set out such considerations as part of its advice. Our board of directors must then make a decision, taking into account the opinion of the



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committee. Any deviation from the committees advice must be justified. Directors who have a conflict of interest are not entitled to participate in the deliberation and vote. The
committees advice and the decision of the board of directors must be notified to our statutory auditor, who must render a separate opinion. The conclusion of the committee, an excerpt from the minutes of the board of directors and the opinion
by the statutory auditor must be included in our annual report. This procedure does not apply to decisions or transactions in the ordinary course of business under customary market conditions and security documents, or to transactions or decisions
with a value of less than 1% of our net assets as shown in our consolidated annual accounts.

In addition to this, our corporate governance charter
provides for guidelines for transactions between us and our directors or members of the executive management team. According to such guidelines:



| |  |  | A member of our board of directors or executive management team will in any event be considered to have a conflict of interests if:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | he/she has a personal financial interest in a company with which we intend to enter into a transaction;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | he/she, his/her spouse, registered partner or other life companion, foster child or relative by blood or marriage up to the second degree is a member of the executive management of or board of a company with which we
intend to enter into a transaction;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | he/she is a member of the board or executive management of, or holds similar office with, a company with which we intend to enter into a transaction;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | under applicable law, including the rules of any stock market on which our shares may be listed, such conflict of interests exists or is deemed to exist.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

Each member of the board of directors or each member of the executive management team must immediately report any potential conflict of interests to the
chairman and to the other members of the board of directors or of the executive management team, as the case may be. The members concerned must provide the chairman and the other members of the board of directors or of executive management team, as
the case may be, with all information relevant to the conflict, including information relating to the persons with whom he has a family law relationship (his/her spouse, registered partner or other life companion, foster child or relative by blood
or marriage up to the second degree) to the extent relevant for the assessment of the existence of a conflict of interests. The chairman of the board of directors or of the executive management team will determine whether a reported (potential)
conflict of interests qualifies as a conflict of interests.

If this is the case, a member of the board of directors or of the executive management team,
as the case may be, must not participate in the discussions or decision-taking process of the board of directors or of the executive management team, as the case may be, on a subject or transaction in relation to which he has a conflict of interests
with us. This transaction, if approved, must be concluded on term customary in the sector concerned and be approved, in the case of a decision by the executive management team, by the board of directors. Without prejudice to the foregoing, each
member of the board of directors who is faced, directly or indirectly, with a financial interest that conflicts with a decision or transaction within the competence of the board of directors, within the meaning of Article 523, or Article 524ter of
the Belgian Company Code, as the case may be, must inform the other members of the board of directors thereof prior to the deliberations. The declaration, as well as the justification, must be included in the minutes of the relevant meeting of the
board of directors. The relevant member of the board of directors must inform the statutory auditor of his conflict of interests. With a view to publication in the annual report, the board of directors must set out in its minutes the nature of the
decision or transaction and the justification thereof, including the financial consequences of the decision or transaction for us. In the case of a conflict of interests within the executive management team, a copy of the minutes of the executive
management team must be submitted to the board of directors at its next meeting. The chairman must procure that all these transactions involving conflicts of interests will be referred to in the annual report, with a declaration that the provisions
in our corporate governance charter have been complied with.

C. Interest of Experts and Counsel

Not applicable.



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|ITEM 8 | Financial Information
|------ | ---------------------

A. Consolidated Statements and Other Financial
Information

Our consolidated financial statements are appended at the end of this Annual Report, starting at page
F-1, and incorporated herein by reference.

Dividend Policy

We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying cash dividends on our equity securities in the
foreseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion of our business. All of the ordinary shares, including in the form of the ADSs, offered by this report will have the same
dividend rights as all of our other outstanding ordinary shares. In general, distributions of dividends proposed by our board of directors require the approval of our shareholders at a meeting of shareholders with a simple majority vote, although
our board of directors may declare interim dividends without shareholder approval, subject to the terms and conditions of the Belgian Company Code.

Pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of
our non-consolidated statutory financial accounts prepared under Belgian GAAP, and not on the basis of IFRS consolidated accounts. In addition, under the Belgian Company Code, we may declare or pay dividends
only if, following the declaration and issuance of the dividends, the amount of our net assets on the date of the closing of the last financial year according to our statutory annual accounts (i.e., the amount of the assets as shown in the balance
sheet, decreased with provisions and liabilities, all as prepared in accordance with Belgian accounting rules), decreased with the non-amortized costs of incorporation and expansion and the non-amortized costs for research and development, does not fall below the amount of the paid-up capital (or, if higher, the called capital), increased with the amount of non-distributable reserves. Finally, prior to distributing dividends, we must allocate at least 5% of our annual net profits (under our non-consolidated statutory accounts
prepared in accordance with Belgian accounting rules) to a legal reserve, until the reserve amounts to 10% of our share capital.

For information
regarding the Belgian withholding tax applicable to dividends and related U.S. reimbursement procedures, see Material income tax considerationsBelgian Tax Consequences.

Legal Proceedings

From time to time we may become
involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material
adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other
factors.

B. Significant Changes

In January 2016, employees, consultants and directors accepted in total 285,550 warrants offered in November 2015. The warrants are part of the 466,000
warrants issued by the Board of Directors held on October 28, 2015, pursuant to the warrants plan which was approved by the Extraordinary Shareholders Meeting held on November 5, 2015. These warrants will be vested over 2016, 2017 and 2018
and may become exercisable as early as January 2019.



|ITEM 9 | THE OFFER and LISTING
|------ | ---------------------

A. Offer and Listing Details

The ADS have been listed on NASDAQ under the symbol CYAD since June 19, 2015. Prior to that date, there was no public trading market for ADSs.
Our ordinary shares have been trading on Euronext Brussels and Euronext Paris under the symbol CYAD since July 5, 2013. Prior to that date, there was no public trading market for ADSs or our ordinary shares. The following tables set
forth for the periods indicated the reported high and low sale prices per ADS in U.S. dollars and per ordinary share on Euronext Brussels in euros.



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Euronext Brussels



|                    |  |      |       |  |     |   |       | 
|------------------- |  | ---- | ----- |  | --- | - | ----- | 
|Period              |  | High |       |  | Low |  
|Annual              |  |      |       |  |     |   |       | 
|2015                |  |     | 70.95 |  |     |  | 30.50 | 
|2016                |  |     | 52.89 |  |     |  | 14.82 | 
|Quarterly           |  |      |       |  |     |   |       | 
|First Quarter 2015  |  |     | 47.85 |  |     |  | 33.61 | 
|Second Quarter 2015 |  |     | 70.95 |  |     |  | 43.54 | 
|Third Quarter 2015  |  |     | 57.98 |  |     |  | 33.62 | 
|Fourth Quarter 2015 |  |     | 49.45 |  |     |  | 30.50 | 
|First Quarter 2016  |  |     | 47.55 |  |     |  | 29.51 | 
|Second Quarter 2016 |  |     | 52.89 |  |     |  | 21.80 | 
|Third Quarter 2016  |  |     | 20.58 |  |     |  | 14.82 | 
|Fourth Quarter 2016 |  |     | 20.00 |  |     |  | 14.82 | 
|Month Ended         |  |      |       |  |     |   |       | 
|September 2016      |  |     | 20.58 |  |     |  | 18.05 | 
|October 2016        |  |     | 20.00 |  |     |  | 14.82 | 
|November 2016       |  |     | 19.90 |  |     |  | 14.90 | 
|December 2016       |  |     | 19.30 |  |     |  | 17.01 | 
|January 2017        |  |     | 23.25 |  |     |  | 17.66 | 
|February 2017       |  |     | 21.12 |  |     |  | 19.00 | 

Nasdaq Listing:



|                                |  |            |       |  |           |   |       | 
|------------------------------- |  | ---------- | ----- |  | --------- | - | ----- | 
|Period
Ceylad ADS Ticker CYAD |  | High(USD$) |       |  | Low(USD$) |  
|                                | 
|Annual 2015                     |  | $          | 67.94 |  |           | $ | 33.84 | 
|Annual 2016                     |  | $          | 58.66 |  |           | $ | 16.69 | 
|Third Quarter 2015              |  | $          | 62.00 |  |           | $ | 37.00 | 
|Fourth Quarter 2015             |  | $          | 54.90 |  |           | $ | 33.84 | 
|First Quarter 2016              |  | $          | 54.58 |  |           | $ | 33.46 | 
|Second Quarter 2016             |  | $          | 58.66 |  |           | $ | 24.98 | 
|Third Quarter 2016              |  | $          | 27.05 |  |           | $ | 20.12 | 
|Fourth Quarter 2016             |  | $          | 24.00 |  |           | $ | 16.69 | 
|January 2016                    |  | $          | 54.58 |  |           | $ | 33.50 | 
|February 2016                   |  | $          | 38.88 |  |           | $ | 33.46 | 
|March 2016                      |  | $          | 48.30 |  |           | $ | 42.31 | 
|April 2016                      |  | $          | 49.78 |  |           | $ | 44.50 | 
|May 2016                        |  | $          | 53.66 |  |           | $ | 48.20 | 
|June 2016                       |  | $          | 58.66 |  |           | $ | 24.98 | 
|July 2016                       |  | $          | 26.59 |  |           | $ | 24.20 | 
|August 2016                     |  | $          | 27.05 |  |           | $ | 22.00 | 
|September 2016                  |  | $          | 23.59 |  |           | $ | 20.12 | 
|October 2016                    |  | $          | 25.00 |  |           | $ | 17.10 | 
|November 2016                   |  | $          | 24.00 |  |           | $ | 16.69 | 
|December 2016                   |  | $          | 20.59 |  |           | $ | 17.76 | 
|January 2017                    |  | $          | 24.01 |  |           | $ | 17.76 | 
|February 2017                   |  | $          | 24.50 |  |           | $ | 19.57 | 



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On February 28, 2017, the last reported sale price of the ADSs on Nasdaq was $22.13 per ADS, and the last
reported sale price of the ordinary shares on Euronext Brussels was 20.71 per share.

B. Plan of Distribution

Not applicable.

C. Markets.

The ADSs have been listed on the Nasdaq under the symbol CYAD since June 19, 2015 and on the Euonext Brussels and Euronext Paris
under symbol CYAD (ordinary share) since July 5, 2013.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F.
Expenses of the Issue.

Not applicable.



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|ITEM 10 | ADDITIONAL INFORMATION
|------- | ----------------------

A. Share Capital

Not applicable.

B. Memorandum and
Articles of Association

The information set forth in our prospectus dated June 18, 2015, filed with the SEC pursuant to Rule 424(b), under the
headings Description of Share CapitalArticles of Association and Other Share Information, Description of Share CapitalDescription of the Rights and Benefits Attached To Our Shares, Description of Share
CapitalBelgian Law is incorporated herein by reference.

C. Material Contracts

Collaboration with ONO Pharmaceuticals Co., Ltd.

On
July 11, 2016, we entered into a license and collaboration agreement with ONO Pharmaceuticals Co., Ltd., or ONO, in connection with which we granted ONO an exclusive license for the development, manufacture and commercialization of allogenic
products incorporating our NKR-T cell technology in Japan, Korea and Taiwan. Under the terms of the collaboration, ONO is solely responsible for and bears all costs incurred in the research, development
and commercialization of such products in its geographies. In addition, we granted ONO an exclusive option to obtain an exclusive license to develop, manufacture and commercialize autologous products incorporating our autologous CAR-T NKR-2 cell technology in Japan, Korea and Taiwan.

In consideration for the
rights granted to ONO under the agreement, we received an up-front payment in the amount of 1.25 billion JPY ($12.5 million) and we are eligible to receive additional milestones for up to
30.075 billion JPY ($299 million) in development and commercial milestones. In addition, we are entitled to receive double digit royalties on nets sales of licensed products in licensed territories.

D. Exchange Controls.

Exchange Controls and Limitations Affecting Shareholders

There are no Belgian exchange control regulations that impose limitations on our ability to make, or the amount of, cash payments to residents of the United
States.

We are in principle under an obligation to report to the National Bank of Belgium certain cross-border payments, transfers of funds, investments
and other transactions in accordance with applicable balance-of-payments statistical reporting obligations. Where a cross-border transaction is carried out by a Belgian
credit institution on our behalf, the credit institution will in certain circumstances be responsible for the reporting obligations.

E. Taxation

Material income tax considerations

The information presented under the caption Certain Material U.S. Federal Income Tax Considerations to U.S. Holders below is a discussion of
certain material U.S. federal income tax considerations to a U.S. holder (as defined below) of investing in ADSs. The information presented under the caption Belgian Tax Consequences is a discussion of the material Belgian tax
consequences of investing in ADSs.

You should consult your tax advisor regarding the applicable tax consequences to you of investing in ADSs under the
laws of the United States (federal, state and local), Belgium, and any other applicable foreign jurisdiction.

Certain Material U.S. Federal Income Tax
Considerations to U.S. Holders

The following is a summary of certain material U.S. federal income tax considerations relating to the acquisition,
ownership and disposition of ADSs by a U.S. holder (as defined below). This summary addresses only the U.S. federal income tax considerations for U.S. holders that hold such ADSs as capital assets. This summary does not address all U.S. federal
income tax matters that may be relevant to a particular U.S. holder. This summary does not address tax considerations applicable to a holder of ADSs that may be subject to special tax rules including, without limitation, the following:



| |  |  | banks, financial institutions or insurance companies;
| | - |  | -----------------------------------------------------



| |  |  | brokers, dealers or traders in securities, currencies, commodities, or notional principal contracts;
| | - |  | ----------------------------------------------------------------------------------------------------



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| |  |  | tax-exempt entities or organizations, including an individual retirement account or Roth IRA as defined in Section 408 or 408A of the Code (as defined
below), respectively;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | real estate investment trusts, regulated investment companies or grantor trusts;
| | - |  | --------------------------------------------------------------------------------



| |  |  | persons that hold the ADSs as part of a hedging, integrated or conversion transaction or as a position in a straddle for U.S. federal income tax purposes;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass-through entities, or persons that will hold the ADSs through such an entity;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | certain former citizens or long term residents of the United States;
| | - |  | --------------------------------------------------------------------



| |  |  | holders that own directly, indirectly, or through attribution 10% or more of the voting power or value of our ADSs and shares; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | holders that have a functional currency other than the U.S. dollar.
| | - |  | ---------------------------------------------------------------------

Further, this summary does
not address the U.S. federal estate, gift, or alternative minimum tax considerations, or any U.S. state, local, or non-U.S. tax considerations of the ownership and disposition of the ADSs.

This description is based on the U.S. Internal Revenue Code of 1986, as amended (the Code), existing, proposed and temporary U.S. Treasury
Regulations promulgated thereunder and administrative and judicial interpretations thereof, and the income tax treaty between Belgium and the United States, in each case as in effect and available on the date hereof. All the foregoing is subject to
change, which change could apply retroactively, and to differing interpretations, all of which could affect the tax considerations described below. There can be no assurances that the U.S. Internal Revenue Service (the IRS) will not take
a contrary or different position concerning the tax consequences of the ownership and disposition of the ADSs and that such a position would not be sustained. Holders should consult their own tax advisers concerning the U.S. federal, state, local
and non-U.S. tax consequences of owning, and disposing of the ADSs in their particular circumstances.

For the
purposes of this summary, a U.S. holder is a beneficial owner of ADSs that is (or is treated as), for U.S. federal income tax purposes:



| |  |  | an individual who is a citizen or resident of the United States;
| | - |  | ----------------------------------------------------------------



| |  |  | a corporation, or other entity that is treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of such trust or
has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If a partnership (or any other
entity treated as a partnership for U.S. federal income tax purposes) holds ADSs, the U.S. federal income tax consequences relating to an investment in the ADSs will depend in part upon the status of the partner and the activities of the
partnership. Such a partner or partnership should consult its tax advisor regarding the U.S. federal income tax considerations of owning and disposing of the ADSs in its particular circumstances.

In general, a U.S. holder who owns ADSs will be treated as the beneficial owner of the underlying shares represented by those ADSs for U.S. federal income tax
purposes. Accordingly, no gain or loss will generally be recognized if a U.S. holder exchanges ADSs for the underlying shares represented by those ADSs.

The U.S. Treasury has expressed concern that parties to whom ADSs are released before shares are delivered to the depositary
(pre-release), or intermediaries in the chain of ownership between holders and the issuer of the security underlying the ADSs, may be taking actions that are inconsistent with the claiming of
foreign tax credits by holders of ADSs. These actions would also be inconsistent with the claiming of the reduced rate of tax, described below, applicable to dividends received by certain non-corporate
holders. Accordingly, the creditability of Belgian taxes, and the availability of the reduced tax rate for dividends received by certain non-corporate U.S. holders, each described below, could be affected by
actions taken by such parties or intermediaries.



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As indicated below, this discussion is subject to U.S. federal income tax rules applicable to a passive
foreign investment company, or a PFIC.

Persons considering an investment in the ADSs should consult their own tax advisors as to the particular
tax consequences applicable to them relating to the ownership and disposition of the ADSs, including the applicability of U.S. federal, state and local tax laws and non-U.S. tax laws.

Distributions. We do not expect to make distributions with respect to the ADSs in the foreseeable future. Subject to the discussion under
Passive Foreign Investment Company Considerations, below, the gross amount of any distribution (before reduction for any amounts withheld in respect of Belgian withholding tax) actually or constructively received by a U.S. holder
with respect to ADSs generally will be taxable to the U.S. holder as a dividend to the extent of the U.S. holders pro rata share of our current and accumulated earnings and profits as determined under U.S. federal income tax principles.
Distributions in excess of earnings and profits will be non-taxable to the U.S. holder to the extent of, and will be applied against and reduce, the U.S. holders adjusted tax basis in the ADSs.
Distributions in excess of earnings and profits and such adjusted tax basis will generally be taxable to the U.S. holder as either long-term or short-term capital gain depending upon whether the U.S. holder has held the ADSs for more than one year
as of the time such distribution is received. However, since we do not calculate our earnings and profits under U.S. federal income tax principles, it is expected that any distribution will be reported as a dividend, even if that distribution would
otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Non-corporate U.S. holders may qualify for the preferential
rates of taxation with respect to dividends on ADSs applicable to long term capital gains (i.e., gains from the sale of capital assets held for more than one year) applicable to qualified dividend income (as discussed below) if we are a
qualified foreign corporation and certain other requirements (discussed below) are met. A non-U.S. corporation (other than a corporation that is classified as a PFIC for the taxable year in which
the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury
of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information provision, or (b) with respect to any dividend it pays on ADSs which are readily tradable on an established securities
market in the United States. The ADSs are currently listed ands we believe readily tradable on the NASDAQ Global Market which is an established securities market in the United States, alttough there can be no assurance that the ADSs will be readily
tradable in future periods. Therefore, unless we are a PFIC in the year a dividend is paid or in the preceding year, dividends received by non-corporate U.S. holders should be taxed at the reduced rates
applicable to long-term capital gains, provided that a holding period requirement (more than 60 days of ownership, without protection from the risk of loss, during the 121 day period beginning 60 days before the
ex-dividend date) and certain other requirements are met. Dividends received by a corporate U.S. holder will not be eligible for the dividends-received deduction generally allowed to corporate U.S. holders.

A U.S. holder generally may claim the amount of any Belgian withholding tax as either a deduction from gross income or a credit against U.S. federal
income tax. However, the foreign tax credit is subject to numerous complex limitations that must be determined and applied on an individual basis. Generally, the credit cannot exceed the proportionate share of a U.S. holders U.S. federal
income tax that such U.S. holders foreign source taxable income bears to such U.S. holders worldwide taxable income. In applying this limitation, a U.S. holders various items of income and deduction must be classified, under
complex rules, as either foreign source or U.S. source. In addition, this limitation is calculated separately with respect to specific categories of income. The amount of a distribution with respect to the ADSs that is
treated as a dividend may be lower for U.S. federal income tax purposes than it is for Belgian income tax purposes, potentially resulting in a reduced foreign tax credit for the U.S. holder. Each U.S. holder should consult its own tax
advisors regarding the foreign tax credit rules.

In general, the amount of a distribution paid to a U.S. holder in a foreign currency will be the dollar
value of the foreign currency calculated by reference to the spot exchange rate on the day the U.S. holder receives the distribution, regardless of whether the foreign currency is converted into U.S. dollars at that time. The U.S. holder will take a
tax basis in the foreign currency equal to their U.S. dollar equivalent on such date. The conversion of the foreign currency into U.S. dollars at a later date will give rise to foreign currency exchange gain or loss equal to the difference between
their U.S. dollar equivalent at such later time and their tax basis. Any foreign currency gain or loss a U.S. holder recognizes on a subsequent conversion of foreign currency into U.S. dollars will be U.S. source ordinary income or loss. If a
distribution received in a



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foreign currency is converted into U.S. dollars on the day they are received, a U.S. holder should not be required to recognize foreign currency gain or loss in respect of the distribution. For
foreign credit limitation purposes, distributions paid on ADSs that are treated as dividends will generally be foreign source income and will generally constitute passive category income.

Sale, Exchange or Other Taxable Disposition of the ADSs. A U.S. holder will generally recognize gain or loss for U.S. federal income tax
purposes upon the sale, exchange or other taxable disposition of ADSs in an amount equal to the difference between the U.S. dollar value of the amount realized from such sale or exchange and the U.S. holders tax basis for those ADSs. Subject
to the discussion under Passive Foreign Investment Company Considerations below, this gain or loss will generally be a capital gain or loss. The adjusted tax basis in the ADSs generally will be equal to the cost of such ADSs.
Capital gain from the sale, exchange or other taxable disposition of ADSs by a non-corporate U.S. holder is generally eligible for the preferential rate of taxation applicable to long-term capital gains, if
the non-corporate U.S. holders holding period determined at the time of such sale, exchange or other taxable disposition for such ADSs exceeds one year. The deductibility of capital losses for U.S.
federal income tax purposes is subject to limitations under the Code. Any such gain or loss that a U.S. holder recognizes generally will be treated as U.S. source gain or loss for foreign tax credit limitation purposes.

Medicare Tax. Certain U.S. holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their net
investment income, which may include all or a portion of their dividend income and net gains from the disposition of ADSs. Each U.S. holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability
of the Medicare tax to its income and gains in respect of its investment in the ADSs.

Passive Foreign Investment Company Considerations. If
we are classified as a PFIC in a taxable year when a U.S. holder owns our ADSs, the U.S. holder will be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that the U.S. holder
could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.

A corporation organized outside the United States generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which,
after applying certain look-through rules with respect to the income and assets of its subsidiaries, either: (i) at least 75% of its gross income is passive income or (ii) at least 50% of the average quarterly value of its
total gross assets (which, assuming we are not a controlled foreign corporation for the year being tested, would be measured by fair market value of our assets, and for which purpose the total value of our assets may be determined in part by the
market value of the ADSs and our ordinary shares, which are subject to change) is attributable to assets that produce passive income or are held for the production of passive income.

Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions and the excess of
gains over losses from the disposition of assets which produce passive income. Generally, a non-U.S. corporation that owns directly or indirectly at least 25% by value of the stock of another corporation is
treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporations income. If we are classified as a PFIC in any year with
respect to which a U.S. holder owns ADSs, we will generally be treated as a PFIC with respect to such U.S. holder in all succeeding years during which the U.S. holder owns the ADSs, regardless of whether we continue to meet the tests described
above.

Whether we are a PFIC for any taxable year will depend on the composition of our income, including the receipt of milestones, and the projected
composition and estimated fair market value of our assets in each year, and because this is a factual determination made annually after the end of each taxable year, there can be no assurance that we will not be considered a PFIC in any taxable
year. The market value of our assets may be determined in large part by reference to the market price of the ADSs and our ordinary shares, which is likely to fluctuate.

Based on the foregoing, we believe we were a PFIC for the 2015 taxable year and for prior taxable years, but that we likely were not a PFIC for our 2016
taxable year. It is uncertain whether we will be a PFIC in 2017 and in future taxable years based upon the expected value of our assets, including any goodwill, and the expected composition of our income and assets, however, as previously mentioned,
we cannot provide any assurances regarding our PFIC status for past, current or future taxable years.

If we are a PFIC, for any taxable year in which you
are a U.S. holder, then unless you make one of the elections described below, a special tax regime will apply to both (a) any excess distribution by us to you (generally, your ratable portion of distributions in any year which are
greater than 125% of the average



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annual distribution received by you in the shorter of the three preceding years or your holding period for the ADSs) and (b) any gain recognized on the sale or other disposition of the ADSs.
Under this regime, any excess distribution and recognized gain will be treated as ordinary income and will be subject to tax as if (a) the excess distribution or gain had been recognized ratably over your holding period, (b) the amount
deemed recognized in each year had been subject to tax in such year at the highest marginal rate for such year (other than income allocated to the current year and any taxable year before we became a PFIC, which would be subject to tax at the U.S.
holders regular ordinary income rate for the current year and would not be subject to the interest charge discussed below), and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to
have been payable in those years. In addition, dividend distributions made to you will not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under Distributions.

Certain elections exist that may alleviate some of the adverse consequences of PFIC status. If we were a PFIC for the 2016 taxable year, a U.S. holder may be
eligible to make an election to mark-to-market the U.S. holders ADSs. An electing U.S. holder will recognize as ordinary income any excess of the fair market value
of the ADSs at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss the excess of the adjusted tax basis of the ADSs over their fair market value at the end of the taxable year (but only to the extent of
the net amount of income previously recognized as a result of the mark-to-market election). The U.S. holders tax basis in the ADSs will be adjusted to reflect
these income or loss amounts. Any gain recognized on the sale or other disposition of ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of
income previously included as a result of the mark-to-market election). Gain or loss recognized on the sale or other disposition of ADSs in a year when we are not a PFIC
will be a capital gain or loss. The mark-to-market election is available only if we are a PFIC and the ADSs are regularly traded on a qualified
exchange. The ADSs will be treated as regularly traded in any calendar year in which more than a de minimis quantity of the ADSs are traded on a qualified exchange on at least 15 days during each calendar quarter (subject to the
rule that trades that have as one of their principal purposes the meeting of the trading requirement as disregarded). The NASDAQ Global Market is a qualified exchange for this purpose.

We do not currently intend to provide the information necessary for U.S. holders to make qualified electing fund elections if we are treated as a PFIC for any
taxable year.

If we are determined to be a PFIC for any taxable year included in the holding period a U.S. holder, such holder may be subject to adverse
tax consequences. U.S. holders should consult their tax advisors to determine whether any of these elections, or other elections for current or past taxable years, may be available and if so, what the consequences of the alternative treatments would
be in their particular circumstances.

If we are determined to be a PFIC, the general tax treatment for U.S. holders described in this section would apply
to indirect distributions and gains deemed to be recognized by U.S. holders in respect of any of our subsidiaries that also may be determined to be PFICs.

If a U.S. holder owns ADSs during any taxable year in which we are a PFIC, the U.S. holder generally will be required to file an IRS Form 8621 (Information
Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with respect to the company, generally with the U.S. holders federal income tax return for that year. If our company were a PFIC for a given taxable
year, then you should consult your tax advisor concerning your annual filing requirements.

The U.S. federal income tax rules relating to PFICs are
complex. Prospective U.S. investors are urged to consult their own tax advisers with respect to the ownership and disposition of the ADSs, the consequences to them of an investment in a PFIC, any elections available with respect to the ADSs and the
IRS information reporting obligations with respect to the ownership and disposition of the ADSs.

Backup Withholding and Information
Reporting. U.S. holders generally will be subject to information reporting requirements with respect to dividends on ADSs and on the proceeds from the sale, exchange or disposition of ADSs that are paid within the United States or through
U.S.-related financial intermediaries, unless the U.S. holder is an exempt recipient. In addition, U.S. holders may be subject to backup withholding on such payments, unless the U.S. holder provides a taxpayer identification number and a
duly executed IRS Form W-9 or otherwise establishes an exemption. Backup withholding is not an additional tax, and the amount of any backup withholding will be allowed as a credit against a U.S. holders
U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.



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Foreign Asset Reporting. Certain U.S. holders who are individuals are required to report
information relating to an interest in the ADSs, subject to certain exceptions (including an exception for shares held in accounts maintained by U.S. financial institutions) by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets)
with their federal income tax return. U.S. holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of the ADSs.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR
IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN ADSS IN LIGHT OF THE INVESTORS OWN CIRCUMSTANCES.

Belgian Tax Consequences

The following paragraphs are a
summary of material Belgian tax consequences of the ownership of ADSs by an investor. The summary is based on laws, treaties and regulatory interpretations in effect in Belgium on the date of this document, all of which are subject to change,
including changes that could have retroactive effect.

The summary only discusses Belgian tax aspects which are relevant to U.S. holders of ADSs, or
Holders. This summary does not address Belgian tax aspects which are relevant to persons who are fiscally resident in Belgium or who avail of a permanent establishment or a fixed base in Belgium to which the ADSs are
effectively connected.

This summary does not purport to be a description of all of the tax consequences of the ownership of ADSs, and does not take into
account the specific circumstances of any particular investor, some of which may be subject to special rules, or the tax laws of any country other than Belgium. This summary does not describe the tax treatment of investors that are subject to
special rules, such as banks, insurance companies, collective investment undertakings, dealers in securities or currencies, persons that hold, or will hold, ADSs in a position in a straddle, share-repurchase transaction, conversion transactions,
synthetic security or other integrated financial transactions. Investors should consult their own advisers regarding the tax consequences of an investment in ADSs in the light of their particular circumstances, including the effect of any state,
local or other national laws.

In addition to the assumptions mentioned above, it is also assumed in this discussion that for purposes of the domestic
Belgian tax legislation, the owners of ADSs will be treated as the owners of the ordinary shares represented by such ADSs. However, the assumption has not been confirmed by or verified with the Belgian Tax Authorities.

Dividend Withholding Tax

As a general rule, a
withholding tax of 30% is levied on the gross amount of dividends paid on the ordinary shares represented by the ADSs, subject to such relief as may be available under applicable domestic or tax treaty provisions.

Dividends subject to the dividend withholding tax include all benefits attributed to the ordinary shares represented by the ADSs, irrespective of their form,
as well as reimbursements of statutory share capital by us, except reimbursements of fiscal capital made in accordance with the Belgian Company Code. In principle, fiscal capital includes paid-up statutory
share capital, and subject to certain conditions, the paid-up issue premiums and the cash amounts subscribed to at the time of the issue of profit sharing certificates.

In case of a redemption by us of our own shares represented by ADSs, the redemption distribution (after deduction of the portion of fiscal capital represented
by the redeemed shares) will be treated as a dividend which in principle is subject to the withholding tax of 30%, subject to such relief as may be available under applicable domestic or tax treaty provisions. In case of a liquidation of our
company, any amounts distributed in excess of the fiscal capital will also be treated as a dividend, and will in principle be subject to a 30% withholding tax, subject to such relief as may be available under applicable domestic or tax treaty
provisions.

For non-residents the dividend withholding tax, if any, will be the only tax on dividends in Belgium,
unless the non-resident avails of a fixed base in Belgium or a Belgian permanent establishment to which the ADSs are effectively connected.



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Relief of Belgian Dividend Withholding Tax

Under the Belgium-United States Tax Treaty, or the Treaty, under which we are entitled to benefits accorded to residents of Belgium, there is a reduced Belgian
withholding tax rate of 15% on dividends paid by us to a U.S. resident which beneficially owns the dividends and is entitled to claim the benefits of the Treaty under the limitation of benefits article included in the Treaty (a Qualifying
Holder).

If such Qualifying Holder is a company that owns directly at least 10% of our voting stock, the Belgian withholding tax rate is further
reduced to 5%. No withholding tax is however applicable if the Qualifying Holder, is either of the following:



| |  |  | a company that is a resident of the United States that has owned directly ADSs representing at least 10% of our capital for a twelve-month period ending on the date the dividend is declared, or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a pension fund that is a resident of the United States, provided that such dividends are not derived from the carrying on of a business by the pension fund or through an associated enterprise.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under the normal procedure, we or our paying agent must withhold the full Belgian withholding tax, without taking into account the reduced Treaty rate.
Qualifying Holders may then make a claim for reimbursement for amounts withheld in excess of the rate defined by the Treaty. The reimbursement form (Form 276 Div-Aut.) may be obtained by letter from the Bureau
Central de Taxation Bruxelles-Etranger, Boulevard du Jardin Botanique 50 boîte 3429, 1000 Brussels, Belgium, by fax at +32 (0) 257/968 42 or via email at ctk.db.brussel.buitenland@minfin.fed.be. Qualifying Holders may also, subject
to certain conditions, obtain the reduced Treaty rate at source. Qualifying Holders should deliver a duly completed Form 276 Div-Aut. no later than 10 days after the date on which the dividend has been paid or
attributed (whichever comes first).

U.S. holders should consult their own tax advisors as to whether they qualify for reduction or exemption in/from
withholding tax upon payment or attribution of dividends, and as to the procedural requirements for obtaining a reduced withholding tax upon the payment of dividends or for making claims for reimbursement.

Withholding tax is also not applicable, pursuant to Belgian domestic tax law, on dividends paid to a U.S. pension fund which satisfies the following
conditions:



| | (i) | to be a legal entity with fiscal residence in the United States and without a permanent establishment or fixed base in Belgium,
| | --- | -------------------------------------------------------------------------------------------------------------------------------



| | (ii) | whose corporate purpose consists solely in managing and investing funds collected in order to pay legal or complementary pensions,
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------



| | (iii) | whose activity is limited to the investment of funds collected in the exercise of its statutory mission, without any profit making aim and without operating a business in Belgium,
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | which is exempt from income tax in the United States, and
| | ---- | ---------------------------------------------------------



| | (v) | provided that it (save in certain particular cases as described in Belgian law) is not contractually obligated to redistribute the dividends to any ultimate beneficiary of such dividends for whom it would manage the
shares or ADSs, nor obligated to pay a manufactured dividend with respect to the shares or ADSs under a securities borrowing transaction. The exemption will only apply if the U.S. pension fund provides an affidavit confirming that it is the full
legal owner or usufruct holder of the shares or ADSs and that the above conditions are satisfied. The organization must then forward that affidavit to us or our paying agent.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Capital Gains and Losses

Pursuant to the Treaty,
capital gains and/or losses realized by a Qualifying Holder from the sale, exchange or other disposition of ADSs are exempt from tax in Belgium.

Capital
gains realized on ADSs by a corporate Holder who is not a Qualifying Holder are generally not subject to taxation in Belgium unless such Holder is acting through a Belgian establishment to which the ADSs are effectively connected (in which case a
33.99%, 25.75%, 0.412% or 0% tax on the capital gain may apply, depending on the particular circumstances, taking into account that different rates may apply if the establishment qualifies as a small enterprise). Capital losses are generally not tax
deductible.



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Private individual Holders which are not Qualifying Holders and which are holding ADSs as a private investment
will, as a rule, not be subject to tax in Belgium on any capital gains arising out of a disposal of ADSs. Losses will, as a rule, not be tax deductible.

However, if the gain realized by such individual Holders on ADSs is deemed to be realized outside the scope of the normal management of such individuals
private estate and the capital gain is obtained or received in Belgium, the gain will be subject to a final tax of 30.28%.

Moreover, capital gains
realized by such individual Holders on the disposal of ADSs for consideration, outside the exercise of a professional activity, to a non-resident corporation (or a body constituted in a similar legal form), to
a foreign state (or one of its political subdivisions or local authorities) or to a non-resident legal entity that is established outside the European Economic Area, are in principle taxable at a rate of 16.5%
if, at any time during the five years preceding the realization event, such individual Holders own or have owned directly or indirectly, alone or with his/her spouse or with certain other relatives, a substantial shareholding in us (that is, a
shareholding of more than 25% of our shares).

Capital gains realized by a Holder upon the redemption of ADSs or upon our liquidation will generally be
taxable as a dividend. See Dividend Withholding Tax.

Estate and Gift Tax

There is no Belgium estate tax on the transfer of ADSs on the death of a Belgian non-resident. Donations of ADSs made
in Belgium may or may not be subject to gift tax depending on the modalities under which the donation is carried out.

Belgian Tax on Stock Exchange
Transactions

A stock market tax is normally levied on the purchase and the sale and on any other acquisition and transfer for consideration of
ADSs on the secondary market, so-called secondary market transactions, (i) if executed through a professional intermediary established in Belgium, or . (ii) deemed to be executed in Belgium,
which is the case if the order is directly or indirectly made to a professional intermediary established outside of Belgium, either by private individuals with habitual residence in Belgium, or legal entities for the account of their seat or
establishment in Belgium. The tax is due from the transferor and the transferee separately. The applicable rate amounts to 0.27% of the consideration paid but with a cap of 1,600 euros per transaction and per party.

Belgian non-residents who purchase or otherwise acquire or transfer, for consideration, ADSs in Belgium for their own
account through a professional intermediary may be exempt from the stock market tax if they deliver a sworn affidavit to the intermediary in Belgium confirming their non-resident status.

In addition to the above, no stock market tax is payable by: (i) professional intermediaries described in Article 2, 9 and 10 of the Law of
August 2, 2002 acting for their own account, (ii) insurance companies described in Article 2, §1 of the Law of July 9, 1975 acting for their own account, (iii) professional retirement institutions referred to in Article 2,
§1 of the Law of October 27, 2006 relating to the control of professional retirement institutions acting for their own account, or (iv) collective investment institutions acting for their own account. No stock exchange tax will thus
be due by Holders on the subscription, purchase or sale of ADSs, if the Holders are acting for their own account. In order to benefit from this exemption, the Holders must file with the professional intermediary in Belgium a sworn affidavit
evidencing that they are non-residents for Belgian tax purposes.

Proposed Financial Transactions Tax

The European Commission has published a proposal for a Directive for a common financial transactions tax, or FTT, in Belgium, Germany, Estonia,
Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia, or collectively, the Participating Member States. However, Estonia has since stated that it will not participate, and it is unclear whether Belgium will participate.

The proposed FTT has a very broad scope and could, if introduced in its current form, apply to certain dealings in ADSs in certain circumstances. Under
current proposals, the FTT could apply in certain circumstances to persons both within and outside of the Participating Member States. Generally, it would apply to certain dealings in ADSs where at least one party is a financial institution, and at
least one party is established in a Participating Member State.

A financial institution may be, or be deemed to be, established
in a Participating Member State in a broad range of circumstances, including by transacting with a person established in a Participating Member State.



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The proposal currently stipulates that once the FTT enters into force, the participating Member States shall not
maintain or introduce taxes on financial transactions other than the FTT (or VAT as provided in the Council Directive 2006/112/EC on the common system of value added tax). For Belgium, the tax on stock exchange transactions should thus be abolished
once the FTT enters into force. The proposal is still subject to negotiation between the participating Member States and therefore may be changed at any time.

Prospective Holders of ADSs are advised to seek their own professional advice in relation to the FTT.

F. Dividends and Paying Agents

Not applicable

G. Statement by
Experts.

Not applicable

H. Documents on Display.

We
are subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers and under those requirements will file reports with the SEC. Those reports may be inspected without charge at the locations described
below. As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing
profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States
companies whose securities are registered under the Exchange Act. Nevertheless, we will file with the SEC an Annual Report on Form 20-F containing financial statements that have been examined and reported on,
with and opinion expressed by an independent registered public accounting firm.

We maintain a corporate website at www.celyad.com. We intend to
post our Annual Report on Form 20-F on our website promptly following it being filed with the SEC. Information contained on, or that can be accessed through, our website does not constitute a part of this
Annual Report on Form 20-F. We have included our website address in this Annual Report on Form 20-F solely as an inactive textual reference.

You may also review a copy of this Annual Report on Form 20-F, including exhibits and any schedule filed herewith, and
obtain copies of such materials at prescribed rates, at the SECs Public Reference Room in Room 1580, 100 F Street, NE, Washington, D.C. 20549-0102. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants, such as Celyad, that file electronically with the SEC.

With respect to references
made in this Annual Report on Form 20-F to any contract or other document of Celyad, such references are not necessarily complete and you should refer to the exhibits attached or incorporated by reference to
this Annual Report on Form 20-F for copies of the actual contract or document.

I.
Subsidiary Information.

Not applicable



|ITEM 11 | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

Quantitative and Qualitative Disclosures
about Market Risk

We are exposed to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk
and liquidity risk. Our overall risk management program focuses on preservation of capital given the unpredictability of financial markets.

Foreign
exchange risk

We are exposed to foreign exchange risk as certain collaborations or supply agreements of raw materials are denominated in USD.
Moreover we have also investments in foreign operations, whose net assets are exposed to foreign currency translation risk (USD). So far, because of the materiality of the exposure, we did not enter into any currency hedging arrangements. No
sensitivity has been performed on the foreign exchange risk as up till now we still consider this risk as immaterial.



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We are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the
USD. Our functional currency is the Euro, but we have several of our product suppliers and clinical vendors invoicing US in USD or in other currencies. In addition, we plan to convert a substantial portion of the proceeds from the global offering to
Euro.

We have not established any formal practice to manage the foreign exchange risk against our functional currency. As of December 31, 2016, we
had no trade receivables denominated in USD and had trade payables denominated in USD of $2.95 million.

Foreign exchange rate movements had no
material effect on our results for the years ended December 31, 2016, 2015 and 2014. Because of our growing activities in the United States, the foreign exchange risk may increase in the future.

In 2016, the percentage of our total costs expressed in $ represented 29.4% or $11.5 million. In the same period of 2015, it was ~17% or
$7.5 million. In 2017, the part of the $ expressed costs will increase due to the establishing of the US team & offices as well as the large part of CAR-T
NKR-2 clinical studies to be initiated in the US.

Liquidity risk

Based on our current operating plans, we believe that the anticipated net proceeds of the global offering, together with our existing cash and cash equivalents
and short term investments, will be sufficient to fund our operations until mid 2019.

JOBS Act Exemptions

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce reporting requirements for an
emerging growth company. We are qualified as an emerging growth company as defined in the JOBS Act. As an emerging growth company, we are electing to take advantage of the following exemptions:



| |  |  | including disclosure of two years of audited financial statements, as opposed to three years, in addition to any required interim financial statements;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to the extent that we are no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements; and (2) exemptions
from the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an
emerging growth company upon the earliest to occur of (1) the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; (2) the date we are qualified as a large accelerated filer, with at least
$700 million of equity securities; (3) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities held by
non-affiliates; and (4) December 31, 2020. We may choose to take advantage of some but not all of these exemptions. For example, Section 107 of the JOBS Act provides that an emerging growth company
can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Given that we currently report and expect to continue to report under IFRS as issued by the
IASB, we have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB. We
have taken advantage of reduced reporting requirements in this Annual Report. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold equity securities.



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|ITEM 12 | Description of Securities Other than Equity Securities
|------- | ------------------------------------------------------

A. Debt Securities

Not applicable

B.
Warrants and Rights

Not applicable

C. Other Securities

Not applicable

D. American Depositary Shares

Description of American depositary shares

Citibank, N.A. is the depositary for our American Depositary Shares. Citibanks depositary offices are located at 388 Greenwich Street, New York, New York
10013. American Depositary Shares are frequently referred to as ADSs and represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificates that are commonly known as
American Depositary Receipts or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank International Limited, located at EGSP 186, 1 North Wall Quay,
Dublin 1 Ireland.

We have appointed Citibank as depositary pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under
cover of a Registration Statement on Form F-6.

Fees and Charges

Pursuant to the terms of the deposit agreement, the holders of ADSs will be required to pay the following fees:



|                                                                                                                                                       |  |                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------
|Service                                                                                                                                                |  | Fees                                                                                     
|       Issuance of ADSs upon deposit of shares (excluding
issuances as a result of distributions of shares)                                           |  | Up to U.S. 5¢ per ADS issued                                                             
|                                                                                                                                                       | 
|       Cancellation of ADSs                                                                                                                           |  | Up to U.S. 5¢ per ADS canceled                                                           
|                                                                                                                                                       | 
|       Distribution of cash dividends or other cash
distributions (i.e., sale of rights and other entitlements)                                       |  | Up to U.S. 5¢ per ADS held                                                               
|                                                                                                                                                       | 
|       Distribution of ADSs pursuant to (i) stock
dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs |  | Up to U.S. 5¢ per ADS held                                                               
|                                                                                                                                                       | 
|       Distribution of securities other than ADSs or
rights to purchase additional ADSs (i.e., spin-off shares)                                       |  | Up to U.S. 5¢ per ADS held                                                               
|                                                                                                                                                       | 
|       ADS Services                                                                                                                                   |  | Up to U.S. 5¢ per ADS held on the applicable record date(s) established by the depositary

As an ADS holder you will also be responsible to pay certain charges such as:



| |  |  | taxes (including applicable interest and penalties) and other governmental charges;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to transfers of ordinary shares to or from the name of the custodian, the
depositary or any nominees upon the making of deposits and withdrawals, respectively;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | certain cable, telex and facsimile transmission and delivery expenses;
| | - |  | ----------------------------------------------------------------------



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| |  |  | the expenses and charges incurred by the depositary in the conversion of foreign currency;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | the fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, ADSs and ADRs; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the fees and expenses incurred by the depositary, the custodian, or any nominee in connection with the servicing or delivery of deposited property.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

ADS fees and charges payable upon (i) deposit of ordinary shares against issuance of ADSs and (ii) surrender of ADSs for cancellation and withdrawal
of ordinary shares are charged to the person to whom the ADSs are delivered (in the case of ADS issuances) and to the person who delivers the ADSs for cancellation (in the case of ADS cancellations). In the case of ADSs issued by the depositary into
DTC or presented to the depositary via DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs or the DTC participant(s)
surrendering the ADSs for cancellation, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account(s) of the applicable beneficial owner(s) in accordance with the procedures and practices of
the DTC participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the
applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees
and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions
made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they
hold ADSs.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service
until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the
depositary. You will receive prior notice of such changes. The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or
otherwise, upon such terms and conditions as we and the depositary agree from time to time.



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##### Table of Contents

PART II

The deposit agreement and the ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of ordinary shares
(including ordinary shares represented by ADSs) are governed by the laws of Belgium.



|ITEM 13 | Defaults, Dividend Arrearages and Delinquencies
|------- | -----------------------------------------------

None.



|ITEM 14 | Material Modifications to the Rights of Security Holders and Use of Proceeds.
|------- | -----------------------------------------------------------------------------

Global Offering

In June 2015, we raised gross proceeds of 88.0 million in our global offering of 1,460,000 ordinary shares, consisting of an underwritten
public offering of 1,168,000 ADSs and a concurrent European private placement of 292,000 ordinary shares, at a price of $68.56 per ADS and 60.25 per ordinary share.

The net offering proceeds to us, after deducting underwriting discounts and commissions and offering expenses, were approximately 77 million.

A portion of the net proceeds from our global offering was used for research and development and general corporate purposes. The balance is held in cash and
cash equivalents and is intended to also be used for the same purposes. None of the net proceeds of our global offering were paid directly or indirectly to any director, officer, general partner of ours or to their associates, persons owning ten
percent or more of any class of our equity securities, or to any of our affiliates.

We did not raise additional dilutive funding in 2016.



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|ITEM 15 | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as such term is defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), that are designed to ensure that information required to be disclosed in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives.

Our chief executive officer (principal executive officer) and chief financial officer (principal financial officer) have carried out an
evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2016. Based on that evaluation, our chief executive officer (principal executive officer) and chief financial officer (principal financial
officer) concluded that our disclosure controls and procedures were not effective as of December 31, 2016 at the reasonable assurance level due to the fact that material weaknesses described below under Managements Annual Report
on Internal Control over Financial Reporting continued to exist at December 31, 2016, as discussed below.

Managements Annual Report
on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our chief executive officer (principal executive officer) and chief
financial officer (principal financial officer), we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016 based on the guidelines established in Internal Control-Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or
combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis

Management identified a material weakness as of December 31, 2016 related to the failure of maintain an adequate segregation of duties with respect
to internal control over financial reporting and payroll processing. We have limited accounting personnel with the appropriate level of accounting and payroll knowledge, experience, and training commensurate with our financial reporting requirements
to enable effective and proper segregation of duties to allow for appropriate monitoring of financial reporting matters and internal control over financial reporting. These control deficiencies did not result in material adjustments to the financial
statements, however there is a reasonable possibility that a material misstatement of the annual financial statements would not have been prevented or detected on a timely basis due to the failure to design and implement appropriate segregation of
duty controls. As a result of the material weaknesses described above, we have concluded our internal control over financial reporting was not effective at December 31, 2016.

Notwithstanding this material weakness and managements assessment that internal control over financial reporting was ineffective as of December 31,
2016, our management, including our chief executive officer (principal executive officer) and chief financial officer (principal financial officer), believes that the consolidated financial statements contained in this Annual Report on Form 20-F present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with IFRS.



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Managements Plan for Remediation

With the oversight of senior management and our Audit Committee, we continue to evaluate our internal control over financial reporting and are taking several
remedial actions to address the material weakness that has been identified:



| |  |  | We have hired, and are hiring, additional accounting, finance and legal staff, who have significant external reporting experience and experience with establishing appropriate financial reporting policies and procedures,
to provide more resources to support, design and implement effective internal controls over financial reporting.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Management believes that hiring additional qualified personnel will improve our overall system of internal controls over financial reporting and will fully remediate this material weakness, which was partially
remediated as of December 31, 2016.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We have engaged an external professional advisor with sufficient technical accounting expertise to assist us in the implementation and evaluation of internal controls over financial reporting and segregating duties
amongst accounting personnel.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Attestation Report of the Registered Public Accounting Firm

Because we qualify as an emerging growth company under the JOBS Act, this Annual Report does not include an attestation report of our independent registered
public accounting firm regarding internal control over financial reporting as required by Section 404(b) of the Sarbanes Oxley Act of 2002. This report is included on page F-3 of this Form 20-F and is incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

There were changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially
affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

The Group has worked in 2016 with an
independent firm to better define, formalize and upgrade our internal controls and processes with the goal of being compliant with the SOX regulation by end of 2016. Under the supervision of the Companys management, an independent firm tested
our internal controls and processes respectively in September 2016 and January 2017 in light of the SOX regulation. No additional material weaknesses were identified other than those related to the segregation of duties. Management will be
addressing the recommendations of the independent firm in view of a continuous improvement of our processes.

Limitations on Effectiveness of Controls
and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and
procedures or our internal control over financial reporting will provide absolute assurance that all appropriate information will, in fact, be communicated to Management to allow timely decisions to be made or prevent all error and fraud. A
control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Additionally, the design of a control system must reflect the fact that there are
resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within the company have been detected or that our control system will operate effectively under all circumstances. Moreover, the design of any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.



|ITEM 16 | Reserved
|------- | --------



|ITEM 16A. | Audit Committees - Financial Expert
|--------- | -----------------------------------

Audit Committee

Our board of directors has determined that Chris Buyse is an Audit Committee financial expert as defined by SEC rules and has the requisite financial
sophistication under the applicable rules and regulations of the Nasdaq Stock Market. Chris Buyse is independent as such term is defined in Rule 10A-3 under the Exchange Act and under the listing standards of
the Nasdaq Stock Market.



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|ITEM 16B | Code of Business and Ethics
|-------- | ---------------------------

We have adopted a Code of Business Conduct and Ethics, or the Code of
Conduct, that is applicable to all of our employees, executive officers and directors. The Code of Conduct is available on our website at www.celyad.com. The Audit Committee of our board of directors will be responsible for overseeing the
Code of Conduct and will be required to approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our
website.



|ITEM 16C | Principal Accountant Fees and Services.
|-------- | ---------------------------------------

PwC Reviseurs dEntreprises sccrl has been our Auditor
since 05/05/2014 as decided by the Annual General Assembly. Ernst & Young served as auditor of the Company since inception until 05/05/2014. Hereunder the fees billed by our Auditors for the last three years: In 2014, are included E&Y
Auditors for an amount of 20K.



|                   |  |                         |     |  |      |  |     | 
|------------------ |  | ----------------------- | --- |  | ---- |  | --- | 
|                   |  | Year Ended December 31, |    
|                   |  | 2016                    |     |  | 2015 | 
|                   |  | (euro in thousands)     |    
|Audit Fees         |  |                         | 127 |  |      |  | 139 | 
|Audit-Related Fees |  |                         | 10  |  |      |  | 519 | 
|Tax Fees           |  |                         |    |  |      |  |     | 
|Other Fees         |  |                         | 4   |  |      |  | 19  | 
|Total              |  |                         | 141 |  |      |  | 677 | 

Audit Fees are the aggregate fees billed for the audit of our annual financial statements. This category also
includes services that generally the independent accountant provides, such as consents and assistance with and review of documents filed with the SEC. In 2015, Audit Fees also include fees billed for assurance and related services
regarding our global offering.

Audit-Related Fees are the aggregate fees billed for assurance and related services that are reasonably
related to the performance of the audit and are not reported under Audit Fees.

Tax Fees are the aggregate fees billed for professional
services rendered by the principal accountant for tax compliance, tax advice and tax planning related services.

Other Fees are any additional
amounts billed for products and services provided by the principal accountant.

Audit and Non-Audit Services Pre-Approval Policy

The Audit Committee has responsibility for appointing, setting compensation of and overseeing
the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has adopted a policy governing the pre-approval of all audit and permitted non-audit services performed by our independent registered public accounting firm to ensure that the provision of such services does not impair the independent registered public accounting firms independence
from us and our management. Unless a type of service to be provided by our independent registered public accounting firm has received general pre-approval from the Audit Committee, it requires specific pre-approval by the Audit Committee. The payment for any proposed services in excess of pre-approved cost levels requires specific
pre-approval by the Audit Committee.

Pursuant to its pre-approval policy,
the Audit Committee may delegate its authority to pre-approve services to the chairperson of the Audit Committee. The decisions of the chairperson to grant pre-approvals
must be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee may not delegate its responsibilities to pre-approve services to the management.



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The Audit Committee has considered the non-audit services provided by PwC
Reviseurs dEntreprises sccrl s as described above and believes that they are compatible with maintaining PwC Reviseurs dEntreprises sccrl independence as our independent registered public accounting firm.



|ITEM 16D | Exemptions from the Listing Standards for Audit Committees
|-------- | ----------------------------------------------------------

Not applicable



|ITEM 16E | Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|-------- | ----------------------------------------------------------------------

Not applicable



|ITEM 16F | Change in Registrants Certifying Accountant
|-------- | --------------------------------------------

Not applicable.



|ITEM 16G | Corporate Governance
|-------- | --------------------

Along with our articles of association, we adopted a corporate governance charter
in accordance with the recommendations set out in the Belgian Corporate Governance Code issued on March 12, 2009 by the Belgian Corporate Governance Committee. The Belgian Corporate Governance Code is based on a comply or explain
system: Belgian listed companies are expected to follow the Belgian Corporate Governance Code, but can deviate from specific provisions and guidelines (though not the principles) provided they disclose the justification for such deviations.

Our board of directors complies with the Belgian Corporate Governance Code, but believes that certain deviations from its provisions are justified in view of
our particular situation.

These deviations include the grant of options or warrants to non-executive directors.
In this way, we have additional possibilities to attract or retain competent non-executive directors and to offer them an attractive additional remuneration without the consequence that this additional
remuneration weighs on our financial results. Furthermore, the grant of warrants is a commonly used method in the sector in which we operate. Without this possibility, we would be subject to a considerable disadvantage compared to competitors who do
offer warrants to their non-executive directors. Our board of directors is of the opinion that the grant of options or warrants has no negative impact on the functioning of the
non-executive directors.

Additionally, Jean-Marc Heynderickx was appointed as a director on January 31, 2013
for a duration of six years, which is in excess of the maximum duration of four years for a directors mandate provided by the Belgian Corporate Governance Code. This appointment was done at a time when the Corporate Governance Code was not
applicable to us. In the future, we will ensure that no directors mandate will exceed the maximum duration of four years as provided by the Corporate Governance Code. Jean-Marc Heynderickx resigned from his mandate of director on
August 21, 2015.

Our board of directors reviews its corporate governance charter from time to time and makes such changes as it deems necessary and
appropriate. Additionally, our board of directors adopted written terms of reference for each of the executive management team, the Audit Committee and the Nomination and Remuneration Committee, which are part of the corporate governance charter.

Differences between Our Corporate Governance Practices and the Listing Rules of the NASDAQ Stock MarketThe listing rules of the NASDAQ Stock
Market include certain accommodations in the corporate governance requirements that allow foreign private issuers, to follow home country corporate governance practices in lieu of the otherwise applicable corporate governance
standards of the NASDAQ Stock Market. The application of such exceptions requires that we disclose each noncompliance with the NASDAQ Stock Market listing rules that we do not follow and describe the Belgian corporate governance practices we do
follow in lieu of the relevant NASDAQ Stock Market corporate governance standard.

We intend to continue to follow Belgian corporate governance practices
in lieu of the corporate governance requirements of the NASDAQ Stock Market in respect of the following:



| |  |  | Quorum at Shareholder Meetings. NASDAQ Stock Market Listing Rule 5620(c) requires that for any meeting of shareholders, the quorum must be no less than 33.33% of the outstanding ordinary shares. There is no
general quorum requirement under Belgian law for ordinary meetings of shareholders, except in relation to decisions regarding certain matters.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Compensation Committee. NASDAQ Stock Market Listing Rule 5605(d)(2) requires that compensation of officers
must be determined by, or recommended to, the board of directors for determination, either by a majority of the independent directors, or a compensation committee
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



122



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| | comprised solely of independent directors. NASDAQ Stock Market Listing Rule 5605(e) requires that director nominees be selected, or recommended for selection, either by a majority of the
independent directors or a nominations committee comprised solely of independent directors. Under Belgian law, we are not subject to any such requirements. In particular, we are not required by Belgian law to set up any compensation or nominations
committees within our board of directors, and are therefore not subject to any Belgian legal requirements as to the composition of such committees either. However, our articles of association provide that our board of directors may form committees
from among its members. Our board of directors has set up and appointed a Nomination and Remuneration Committee. Pursuant article 526quater of the Belgian Company Code, only a majority of the members of the committee must qualify as
independent as defined under article 526ter of the Belgian Company Code. Our Nomination and Remuneration Committee is currently comprised of four directors, all of whom are independent in accordance with article 526ter of the Belgian Company
Code and the NASDAQ rules.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Independent Director Majority on Board/Meetings. NASDAQ Stock Market Listing Rules 5605(b)(1) and (2) require that a majority of the board of directors must be comprised of independent directors and that
independent directors must have regularly scheduled meetings at which only independent directors are present. We are not required under Belgian law to have more than two independent directors on our board of directors. However, our articles of
association provide that our board of directors must be comprised of at least three directors, of which, pursuant to our corporate governance charter, at least three directors must be independent directors under Belgian law. We do not intend to
require our independent directors to meet separately from the full board of directors on a regular basis or at all although the board of directors is supportive of its independent members voluntarily arranging to meet separately from the other
members of our board of directors when and if they wish to do so.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 16H | Mine Safety Disclosure
|-------- | ----------------------

Not applicable



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PART III



|ITEM 17 | Financial Statements.
|------- | ---------------------

See pages F-1 to F-49



|ITEM 18 | FINANCIAL STATEMENT
|------- | -------------------

Not applicable.



|ITEM 19 | Exhibits
|------- | --------

The Exhibits listed in the Exhibit Index at the end of this Annual Report on Form 20-F are
filed as Exhibits to this Annual Report on Form 20-F.



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Index to Financial Statements



|                                                                                                                 |  |      |     | 
|---------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                 |  | Page |    
|Annual Financial Statements for the Years Ended December 31, 2014, 2015 and
2016:                                |  |      |     | 
|Report of PwC, Independent Registered Public Accounting Firm                                                     |  |      | F-1 | 
|Statements of Consolidated Financial Position as of December 
31, 2014, 2015 and 2016                            |  |      | F-2 | 
|Statements of Consolidated Income (Loss) for the Years Ended December 
31, 2014, 2015 and 2016                   |  |      | F-3 | 
|Statement of Consolidated Comprehensive Income (Loss) for the Years Ended December 31,
 2014, 2015 and 2016      |  |      | F-4 | 
|Statements of Consolidated Cash Flows for the Years Ended December 
31, 2014, 2015 and 2016                      |  |      | F-5 | 
|Statements of Changes in Consolidated Shareholders Equity for the Years
 Ended December 31, 2014, 2015 and 2016 |  |      | F-6 | 
|Notes to the Financial Statements                                                                                |  |      | F-7 | 



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##### Table of Contents

Report of PWC

Report of Independent Registered Public Accounting Firm





Tothe Board of Directors and shareholders of Celyad SA:

In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of income (loss), comprehensive income
(loss), changes in shareholders equity and of cash flows present fairly, in all material respects, the financial position of Celyad SA and its subsidiariesat 31 December 2016 and 31 December 2015, and the results of their
operations and their cash flows for each of the three years in the period ended 31 December 2016in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial
statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

Liège, Belgium

April 4, 2017

PricewaterhouseCoopers Reviseurs
dEntreprises sccrl

Represented by

/s/ Patrick
Mortroux



F-1



---

##### Table of Contents

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION



|                               |  |                                |          |   |      |  |          |  
|------------------------------ |  | ------------------------------ | -------- | - | ---- |  | -------- | -
|(000)                        |  | For the year ended 31 December |         
|                               |  | 2016                           |          |   | 2015 | 
|NON-CURRENT ASSETS             |  |                                | 53,440   |   |      |  | 50,105   |  
|Intangible assets              |  |                                | 49,566   |   |      |  | 48,789   |  
|Property, Plant and Equipment  |  |                                | 3,563    |   |      |  | 1,136    |  
|Other non-current assets       |  |                                | 311      |   |      |  | 180      |  
|CURRENT ASSETS                 |  |                                | 85,367   |   |      |  | 109,419  |  
|Trade and Other Receivables    |  |                                | 1,359    |   |      |  | 549      |  
|Grants receivables             |  |                                |         |   |      |  | 104      |  
|Other current assets           |  |                                | 1,420    |   |      |  | 1,254    |  
|Short term investments         |  |                                | 34,230   |   |      |  | 7,338    |  
|Cash and cash equivalents      |  |                                | 48,357   |   |      |  | 100,175  |  
|                               |  |                                |          |   |      |  |          |  
|TOTAL ASSETS                   |  |                                | 138,806  |   |      |  | 159,525  |  
|                               |  |                                |          |   |      |  |          |  
|EQUITY                         |  |                                | 90,885   |   |      |  | 111,473  |  
|Share Capital                  |  |                                | 32,571   |   |      |  | 32,571   |  
|Share premium                  |  |                                | 158,010  |   |      |  | 158,010  |  
|Other reserves                 |  |                                | 24,329   |   |      |  | 21,205   |  
|Retained loss                  |  |                                | (124,026 | ) |      |  | (100,313 | )
|NON-CURRENT LIABILITIES        |  |                                | 36,646   |   |      |  | 36,562   |  
|Bank loans                     |  |                                | 536      |   |      |  |          |  
|Finance leases                 |  |                                | 381      |   |      |  | 427      |  
|Advances repayable             |  |                                | 7,330    |   |      |  | 10,484   |  
|Contingent liabilities         |  |                                | 28,179   |   |      |  | 25,529   |  
|Other Post employment benefits |  |                                | 204      |   |      |  | 121      |  
|Other non current liabilities  |  |                                | 16       |   |      |  |          |  
|CURRENT LIABILITIES            |  |                                | 11,275   |   |      |  | 11,490   |  
|Bank loans                     |  |                                | 207      |   |      |  |          |  
|Finance leases                 |  |                                | 354      |   |      |  | 248      |  
|Advances repayable             |  |                                | 1,108    |   |      |  | 898      |  
|Trade payables                 |  |                                | 8,098    |   |      |  | 8,576    |  
|Other current liabilities      |  |                                | 1,508    |   |      |  | 1,768    |  
|                               |  |                                |          |   |      |  |          |  
|TOTAL EQUITY AND LIABILITIES   |  |                                | 138,806  |   |      |  | 159,525  |  
|                               |  |                                |          |   |      |  |          |  



F-2



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##### Table of Contents

STATEMENTS OF CONSOLIDATED INCOME (LOSS)



|                                                                  |  |      |           |   |                                            |  |           |      |  |  |           |  
|----------------------------------------------------------------- |  | ---- | --------- | - | ------------------------------------------ |  | --------- | ---- |  |  | --------- | -
|(000)                                                           |  |      |           |   | For the 12 months period ended 31 December | 
|                                                                  |  | 2016 |           |   | 2015                                       |  |           | 2014 | 
|Revenue                                                           |  |      | 8,523     |   |                                            |  | 3         |      |  |  | 146       |  
|Cost of Sales                                                     |  |      | (53       | ) |                                            |  | (1        | )    |  |  | (115      | )
|Gross profit                                                      |  |      | 8,471     |   |                                            |  | 2         |      |  |  | 31        |  
|Research and Development expenses                                 |  |      | (27,675   | ) |                                            |  | (22,766   | )    |  |  | (15,865   | )
|General and administrative expenses                               |  |      | (9,744    | ) |                                            |  | (7,230    | )    |  |  | (5,016    | )
|Other operating income                                            |  |      | 3,340     |   |                                            |  | 322       |      |  |  | 4,413     |  
|Operating Loss                                                    |  |      | (25,609   | ) |                                            |  | (29,672   | )    |  |  | (16,437   | )
|Financial income                                                  |  |      | 2,204     |   |                                            |  | 542       |      |  |  | 277       |  
|Financial expenses                                                |  |      | (207      | ) |                                            |  | (236      | )    |  |  | (41       | )
|Share of Loss of investment accounted for using the equity method |  |      |          |   |                                            |  | 252       |      |  |  | (252      | )
|                                                                  |  |      |          
|Loss before taxes                                                 |  |      | (23,612   | ) |                                            |  | (29,114   | )    |  |  | (16,453   | )
|Income taxes                                                      |  |      | 6         |   |                                            |  |          |      |  |  |          |  
|                                                                  |  |      |           |   |                                            |  |           |      |  |  |           |  
|Loss for the year                                                 |  |      | (23,606   | ) |                                            |  | (29,114   | )    |  |  | (16,453   | )
|                                                                  |  |      |           |   |                                            |  |           |      |  |  |           |  
|Weighted average number of outstanding shares                     |  |      | 9,313,603 |   |                                            |  | 8,481,583 |      |  |  | 6,750,383 |  
|                                                                  |  |      |           |   |                                            |  |           |      |  |  |           |  
|Losses per share (in )
[1]                                       |  |      | (2.53     | ) |                                            |  | (3.43     | )    |  |  | (2.44     | )
|Basic and diluted                                                 |  |      | (2.53     | ) |                                            |  | (3.43     | )    |  |  | (2.44     | )



|[1] | Basic and diluted net loss per share is the same in these periods because outstanding warrants would be anti-dilutive due to our net loss in these periods.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



F-3



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##### Table of Contents

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)



|                                                                     |  |                                            |         |   |      |  |         |      |  |  |         |  
|-------------------------------------------------------------------- |  | ------------------------------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|(000)                                                              |  | For the 12 months period ended 31 December |         |   |      | 
|                                                                     |  | 2016                                       |         |   | 2015 |  |         | 2014 | 
|Loss for the year                                                    |  |                                            | (23,606 | ) |      |  | (29,114 | )    |  |  | (16,453 | )
|                                                                     |  |                                            |         |   |      |  |         |      |  |  |         |  
|Other comprehensive Income                                           |  |                                            |         |   |      |  |         |      |  |  |         |  
|Items that will not be reclassified to profit and loss               |  |                                            | (107    | ) |      |  | 16      |      |  |  | (154    | )
|Remeasurements of post employment benefit obligations, net of tax    |  |                                            | (107    | ) |      |  | 16      |      |  |  | (154    | )
|Items that may be subsequently reclassified to profit or loss        |  |                                            | 277     |   |      |  | 485     |      |  |  | (10     | )
|Currency translation differences                                     |  |                                            | 277     |   |      |  | 485     |      |  |  | (10     | )
|Other comprehensive loss for the year, net of tax                    |  |                                            | 170     |   |      |  | 501     |      |  |  | (164    | )
|                                                                     |  |                                            |         |   |      |  |         |      |  |  |         |  
|Total comprehensive loss for the year                                |  |                                            | (23,436 | ) |      |  | (28,613 | )    |  |  | (16,617 | )
|                                                                     |  |                                            |         |   |      |  |         |      |  |  |         |  
|Total Comprehensive loss for the year attributable to Equity Holders |  |                                            | (23,436 | ) |      |  | (28,613 | )    |  |  | (16,617 | )
|                                                                     |  |                                            |         |   |      |  |         |      |  |  |         |  



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##### Table of Contents

STATEMENT OF CONSOLIDATED CASH FLOWS



|                                                          |  |                                |         |   |      |  |         |      |  |  |         |  
|--------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|(000)                                                   |  | For the year ended 31 December |         |   |      | 
|                                                          |  | 2016                           |         |   | 2015 |  |         | 2014 | 
|Cash Flow from operations activities                      |  |                                |         |   |      |  |         |      |  |  |         |  
|Net Loss for the year                                     |  |                                | (23,606 | ) |      |  | (29,114 | )    |  |  | (16,453 | )
|Non-cash adjustments                                      |  |                                |         |   |      |  |         |      |  |  |         |  
|Depreciation                                              |  |                                | 760     |   |      |  | 273     |      |  |  | 193     |  
|Amortization                                              |  |                                | 756     |   |      |  | 760     |      |  |  | 677     |  
|Post Employment Benefit                                   |  |                                | (24     | ) |      |  | (45     | )    |  |  | 28      |  
|Share of loss in company consol. under equity method      |  |                                |        |   |      |  |        |      |  |  | 252     |  
|Deconsolidation of. CELYAD Asia Ltd.                      |  |                                |        |   |      |  | 60      |      |  |  | (312    | )
|Change in fair value valuation of Contingent liabilities  |  |                                | 1,633   |   |      |  |        |      |  |  |        |  
|Change in fair value valuation of RCAs                   |  |                                | (2,154  | ) |      |  | (84     | )    |  |  |        |  
|Reversal provision for reimbursement RCAs                 |  |                                |        |   |      |  |        |      |  |  | (507    | )
|Proceeds of grants and advances                           |  |                                | (3,003  | ) |      |  | (1,647  | )    |  |  | (2,418  | )
|Currency translation adjustment                           |  |                                | (144    | ) |      |  | (21     | )    |  |  |        |  
|Share-based payments                                      |  |                                | 2,847   |   |      |  | 795     |      |  |  | 1,098   |  
|Change in working capital                                 |  |                                |         |   |      |  |         |      |  |  |         |  
|Trade receivables, other receivables                      |  |                                | (1,018  | ) |      |  | 653     |      |  |  | (2,048  | )
|Trade payables, other payable and accruals                |  |                                | (740    | ) |      |  | 1,066   |      |  |  | 2,076   |  
|Net cash (used in)/from operations                        |  |                                | (24,692 | ) |      |  | (27,303 | )    |  |  | (17,414 | )
|                                                          |  |                                |         |   |      |  |         |      |  |  |         |  
|Cash Flow from investing activities                       |  |                                |         |   |      |  |         |      |  |  |         |  
|Acquisitions of Property, Plant & Equipment               |  |                                | (1,687  | ) |      |  | (811    | )    |  |  | (590    | )
|Acquisitions of Intangible assets                         |  |                                | (95     | ) |      |  | (27     | )    |  |  | (50     | )
|Disposals of fixed assets                                 |  |                                | 78      |   |      |  |        |      |  |  |        |  
|Acquisition of short term investment                      |  |                                | (34,230 | ) |      |  | (5,000  | )    |  |  | 372     |  
|Proceeds from Short Term Investments                      |  |                                | 7,388   |   |      |  | 333     |      |  |  |        |  
|Acquisition of Corquest Medical Inc                       |  |                                |        |   |      |  |        |      |  |  | (1,500  | )
|Acquisition of Oncyte LLC                                 |  |                                |        |   |      |  | (5,186  | )    |  |  |        |  
|Acquisition of BMS SA                                     |  |                                | (1,560  | ) |      |  |        |      |  |  |        |  
|Net cash used in investing activities                     |  |                                | (30,157 | ) |      |  | (10,691 | )    |  |  | (1,768  | )
|                                                          |  |                                |         |   |      |  |         |      |  |  |         |  
|Cash flows from financing activities                      |  |                                |         |   |      |  |         |      |  |  |         |  
|Proceeds from borrowings                                  |  |                                | 1,165   |   |      |  | 451     |      |  |  | 444     |  
|Repayments of finance leases                              |  |                                | (399    | ) |      |  | (188    | )    |  |  | (138    | )
|Proceeds from issuance of shares and exercise of warrants |  |                                |        |   |      |  | 109,154 |      |  |  | 25,305  |  
|Proceeds from RCAs & other grants                         |  |                                | 3,107   |   |      |  | 1,647   |      |  |  | 2,418   |  
|Repayment of advances                                     |  |                                | (842    | ) |      |  | (529    | )    |  |  | (272    | )
|Net cash from financing activities                        |  |                                | 3,031   |   |      |  | 110,535 |      |  |  | 27,757  |  
|Net cash and cash equivalents at beginning of the period  |  |                                | 100,174 |   |      |  | 27,633  |      |  |  | 19,058  |  
|Change in net cash and cash equivalents                   |  |                                | (51,818 | ) |      |  | 72,542  |      |  |  | 8,575   |  
|Net cash and cash equivalents at the end of the period    |  |                                | 48,357  |   |      |  | 100,175 |      |  |  | 27,633  |  
|                                                          |  |                                |         |   |      |  |         |      |  |  |         |  



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##### Table of Contents

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERs EQUITY



|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|------------------------------------------------------------- |  | ------------- | ------ |  | ------------- |  | ------- | ------------- |  |  | ------------ | - |  | ----------- | -------- | - |  |  | ------- | -
|(000)                                                       |  | Share capital |        |  | Share premium |  |         | Otherreserves |  |  | Retainedloss |   |  | TotalEquity |         
|Balance as of 1st January
2014                                |  |               | 22,138 |  |               |  | 30,474  |               |  |  | 18,894       |   |  |             | (54,608  | ) |  |  | 16,898  |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Capital increase in cash                                      |  |               | 1,989  |  |               |  | 23,011  |               |  |  |              |   |  |             |          |   |  |  | 25,000  |  
|Exercise of warrants                                          |  |               | 488    |  |               |  | 500     |               |  |  |              |   |  |             |          |   |  |  | 988     |  
|Share-based payments                                          |  |               |        |  |               |  | 429     |               |  |  | 1,098        |   |  |             |          |   |  |  | 1,527   |  
|Transaction costs associated with capital increases           |  |               |        |  |               |  | (1,112  | )             |  |  |              |   |  |             |          |   |  |  | (1,112  | )
|Total transactions with owners, recognized directly in equity |  |               | 2,477  |  |               |  | 22,828  |               |  |  | 1,098        |   |  |             |          |   |  |  | 26,403  |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Loss for the year                                             |  |               |        |  |               |  |         |               |  |  |              |   |  |             | (16,453  | ) |  |  | (16,453 | )
|Currency Translation differences                              |  |               |        |  |               |  |         |               |  |  | (10          | ) |  |             |          |   |  |  | (10     | )
|Remeasurements of defined benefit obligation                  |  |               |        |  |               |  |         |               |  |  |              |   |  |             | (154     | ) |  |  | (154    | )
|Total comprehensive gain/(loss) for the year                  |  |               |        |  |               |  |         |               |  |  | (10          | ) |  |             | (16,607  | ) |  |  | (16,617 | )
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Balance as of 1st January
2015                                |  |               | 24.615 |  |               |  | 53.302  |               |  |  | 19.982       |   |  |             | (71.215  | ) |  |  | 26.684  |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Capital increase in cash                                      |  |               | 7,607  |  |               |  | 112,104 |               |  |  |              |   |  |             |          |   |  |  | 119,711 |  
|Capital increase (Acquisition Oncyte)                         |  |               | 326    |  |               |  | 3,126   |               |  |  |              |   |  |             |          |   |  |  | 3,452   |  
|Exercise of warrants                                          |  |               | 23     |  |               |  | 196     |               |  |  |              |   |  |             |          |   |  |  | 219     |  
|Share-based payments                                          |  |               |        |  |               |  | 59      |               |  |  | 736          |   |  |             |          |   |  |  | 795     |  
|Transaction costs associated with capital increases           |  |               |        |  |               |  | (10,776 | )             |  |  |              |   |  |             |          |   |  |  | (10,776 | )
|Total transactions with owners, recognized directly in equity |  |               | 7,956  |  |               |  | 104,709 |               |  |  | 736          |   |  |             | 0        |   |  |  | 113,401 |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Loss for the year                                             |  |               |        |  |               |  |         |               |  |  |              |   |  |             | (29,114  | ) |  |  | (29,114 | )
|Currency Translation differences                              |  |               |        |  |               |  |         |               |  |  | 487          |   |  |             |          |   |  |  | 487     |  
|Remeasurements of defined benefit obligation                  |  |               |        |  |               |  |         |               |  |  |              |   |  |             | 16       |   |  |  | 16      |  
|Total comprehensive gain/(loss) for the year                  |  |               |        |  |               |  |         |               |  |  | 487          |   |  |             | (29,098  | ) |  |  | (28,611 | )
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Balance as of 1st January
2016                                |  |               | 32,571 |  |               |  | 158,010 |               |  |  | 21,205       |   |  |             | (100,313 | ) |  |  | 111,473 |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Capital increase in cash                                      |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Capital increase (Acquisition Oncyte)                         |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Exercise of warrants                                          |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Share-based payments                                          |  |               |        |  |               |  |         |               |  |  | 2,848        |   |  |             |          |   |  |  | 2,848   |  
|Transaction costs associated with capital increases           |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Total transactions with owners, recognized directly in equity |  |               |       |  |               |  |        |               |  |  | 2,848        |   |  |             |         |   |  |  | 2,848   |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Loss for the year                                             |  |               |        |  |               |  |         |               |  |  |              |   |  |             | (23,606  | ) |  |  | (23,606 | )
|Currency Translation differences                              |  |               |        |  |               |  |         |               |  |  | 277          |   |  |             |          |   |  |  | 277     |  
|Remeasurements of defined benefit obligation                  |  |               |        |  |               |  |         |               |  |  |              |   |  |             | (107     | ) |  |  | (107    | )
|Total comprehensive gain/(loss) for the year                  |  |               |       |  |               |  |        |               |  |  | 277          |   |  |             | (23,713  | ) |  |  | (23,436 | )
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  
|Balance as of 31 December 2016                                |  |               | 32.571 |  |               |  | 158,010 |               |  |  | 24,330       |   |  |             | (124,026 | ) |  |  | 90,885  |  
|                                                              |  |               |        |  |               |  |         |               |  |  |              |   |  |             |          |   |  |  |         |  



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##### Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1: The Company

Celyad SA (the Company)
and its subsidiaries (together, the Group) is a biopharmaceutical company, specialized in cell therapy, that is developing landmark technologies aimed at treating severe diseases with poor prognosis. Our scientific approach is inspired
by the natural mechanisms that are used by the body to fight disease.

The group has four fully owned subsidiaries located in Belgium, Biological
Manufacturing Services SA , and in the United States, Celyad Inc, Corquest Medical Inc and OnCyte LLC. OnCyte LLC. Biological Manufacturing Services SA was acquired in May 2016.

Celyad SA was incorporated on July 24, 2007 under the name Cardio3 BioSciences. Celyad is a limited liability company
(Société Anonyme) governed by Belgian law with its registered office at Axis Parc, Rue Edouard Belin 12, B-1435 Mont-Saint-Guibert, Belgium (company number 0891.118.115). The
Companys ordinary shares are listed on NYSE Euronext Brussels and NYSE Euronext Paris regulated markets and the Companys ADS are listed on the NASDAQ Global Market under the ticker symbol CYAD.

These consolidated financial statements of Celyad for the twelve months ended 31 December 2016 (the Period) include Celyad SA and its
subsidiaries. These statements were approved by the Board of Directors on [17 March 2017]. These statements were audited by PwC Reviseurs dEntreprise SCCRL, the statutory auditor of the Company.

Note 2: General information and Statement of Compliance

The significant accounting policies used for preparing the consolidated financial statements are explained here below.

The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements have been approved for issue by the
Board of Directors of Celyad on 17 March 2017.

The consolidated financial statements are presented in euro and all values are presented in thousands
(000) except when otherwise indicated.

Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) interpretations applicable to companies reporting under IFRS, as adopted by the IASB. These standards have been endorsed by the European Union.

The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Groups accounting policies. The areas involving a higher degree of judgment or complexity are areas where assumptions and estimates are significant to the financial statements.
They are disclosed in Note 5.

Changes to accounting standards and interpretations

The following interpretation and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2016:



| |  | Amendment to IAS 16 Property, plant and equipment and IAS 38 Intangible assets on depreciation and amortization, effective for annual periods beginning on or after 1 January
2016. In this amendment the IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors
other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible
asset.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IAS 27 Separate financial statements on the equity method, effective for annual periods beginning on or after 1 January 2016. These amendments allow entities to use the equity
method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IAS 1 Presentation of financial statements, effective for annual periods
beginning on or after 1 January 2016. The amendments to IAS 1 are part of the initiative of the IASB to improve presentation and disclosure in financial reports and are designed to further encourage
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| | companies to apply professional judgment in determining what information to disclose in their financial statements. The amendments make clear that materiality applies to the whole of financial
statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures. Furthermore, the amendments clarify that companies should use professional judgment in determining where and in what order
information is presented in the financial disclosures.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendment to IAS 19, Employee benefits, on defined benefit plans (effective 1 July 2014 and endorsed for 1 February 2015). These narrow scope amendments apply to contributions from employees
or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated
according to a fixed percentage of salary
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Annual improvements 2010-2012 (effective 1 July 2014 and endorsed for 1 February 2015). These amendments include changes from the 2010-12 cycle of the annual
improvements project, that affect 7 standards: IFRS 2, Share-based payment, IFRS 3, Business Combinations, IFRS 8, Operating segments, IFRS 13, Fair value measurement, IAS 16, Property, plant and
equipment, and IAS 38, Intangible assets, Consequential amendments to IFRS 9, Financial instruments, IAS 37, Provisions, contingent liabilities and contingent assets, and IAS 39, Financial instruments 
Recognition and measurement.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Annual improvements 2012-2014 (effective and endorsed for 1 January 2016). These set of amendments impacts 4 standards: IFRS 5, Non-current assets held for sale
and discontinued operations regarding methods of disposal; IFRS 7, Financial instruments: Disclosures, (with consequential amendments to IFRS 1) regarding servicing contracts; IAS 19, Employee benefits regarding
discount rates; IAS 34, Interim financial reporting regarding disclosure of information.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IFRS 10 Consolidated financial statements, IFRS 12 Disclosure of interests in other entities and IAS 28, Investments in associates and joint
ventures, effective for annual periods beginning on or after 1 January 2016. These amendments clarify the application of the consolidation exception for investment entities and their subsidiaries.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following new standards and amendments to standards have been issued, but are not mandatory for the first time for the financial year beginning
1 January 2016 and have been endorsed by the European Union:



| |  | IFRS 15 Revenue from contracts with customers. The standard will improve comparability of the top line in financial statements globally. Companies using IFRS will be required to apply the revenue
standard for annual periods beginning on or after 1 January 2018, subject to EU endorsement.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 9 Financial instruments, effective for annual periods beginning on or after 1 January 2018. The standard addresses the classification, measurement, derecognition of financial assets and
financial liabilities and general hedge accounting.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following new standards and amendments to standards have been issued, but are not
mandatory for the first time for the financial year beginning 1 January 2016 and have not been endorsed by the European Union:



| |  | IFRS 16Leases. This standard replaces the current guidance in IAS 17 and is a far reaching change in accounting by lessees in particular. Under IAS 17, lessees were required to make a distinction
between a finance lease (on balance sheet) and an operating lease (off balance sheet). IFRS 16 requires lessees to recognise a lease liability reflecting future lease payments and a
right-of-use asset for virtually all lease contracts. For lessors, the accounting stays almost the same. However, as the IASB has updated the guidance on the
definition of a lease (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for consideration.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments toIFRS 10, Consolidated financial statements and IAS 28,Investments in associates and joint ventures, for which the effective date still has to be determined. These
amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a
full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are
housed in a subsidiary.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IAS 12,Income taxes on Recognition of deferred tax assets for unrealised losses (effective 1 January 2017). These amendments on the recognition of deferred tax assets for unrealised
losses clarify how to account for deferred tax assets related to debt instruments measured at fair value.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IAS 7, Statement of cash flows (effective 1 January 2017). These amendments to IAS 7 introduce an additional disclosure that will enable users of financial statements to evaluate changes in
liabilities arising from financing activities. The amendment is part of the IASBs Disclosure Initiative, which continues to explore how financial statement disclosure can be improved.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Amendments to IFRS 15, Revenue from contracts with customersClarifications (effective 1 January 2018). These amendments compromise clarification guidance on identifying performance
obligations, accounting for licences of intellectual property and the principle versus agent assessment. The amendment also includes more illustrative examples.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | Amendments to IFRS 2: Share-based payments (effective 1 January 2018): The amendment clarifies the measurement basis for cash-settled payments and the accounting for modifications that change an award from
cash settled to equity settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employees tax
obligation associated with a share-based payment and pay the amount to the tax authorities.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Annual improvements 2014-2016. This set of amendments impacts 3 standards: IFRS 1 First-time adoption of International Financial Reporting Standards regarding short-term exemptions for first-time
adopters (effective 1 January 2018), IFRS 12  Disclosure of interests in other entities regarding the scope of the Standard (effective 1 January 2017), and IAS 28 Investments in associates and joint ventures
regarding measuring an associate or joint venture at fair value (effective 1 January 2018).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRIC 22 Foreign currency transactions and advance considerations (effective 1 January 2018). This Interpretation addresses how to determine the date of the transaction for the purpose of
determining the exchange rate to use on initial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or liability arising from the payment or receipt of advance
consideration in a foreign currency.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Going concern

The Group is pursuing a strategy to develop therapies to treat unmet medical needs in both cardiology and oncology. Management has prepared detailed budgets
and cash flow forecasts for the years 2016 and 2017. These forecasts reflect the strategy of the Group and include significant expenses and cash outflows in relation to the development of selected research programs and products candidates.

Based on its current scope of activities, the Group estimates its cash position as of 31 December 2016 (including short term investments) is sufficient
to cover its cash requirements until mid of 2019, therefore until the readout of the CAR-T NKR-2 T-cells THINK trial. After due
consideration of the above, the Board of Directors determined that management has an appropriate basis to conclude on the continuity over the next 12 months of the Groups business and hence it is appropriate to prepare the financial statements
on a going concern basis.

Note 3: Accounting Principles

Subsidiaries

Subsidiaries are all entities (including
structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date control ceases.

The Group applies the acquisition method to account for business combinations.

The consideration transferred for the acquisition of a subsidiary is measured at the aggregate of the fair values of the assets transferred, the liabilities
incurred or assumed and the equity interests issued by the Group at the date of the acquisition. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred.

Any
contingent consideration to be transferred by the Group is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognized in accordance
with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for
within equity.

Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are
also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Groups accounting policies.



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Foreign currency translation

Functional and presentation currency

Items included in
the financial statements of each of the Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented
in Euros, which is the Groups presentation currency.

Transactions and balances

Foreign currency transactions (mainly USD) are translated into functional currency using the applicable exchange rate on the transaction dates. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

Foreign
currency exchange gains and losses arising from settling foreign currency transactions and from the retranslation of monetary assets and liabilities denominated in foreign currencies at the reporting date are recognised in the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as of the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined.

Group companies

The results and
financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

Income and expenses for each income statement are translated at average exchange rate (unless this average is not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

All resulting exchange differences are recognized in other comprehensive income.

Revenue

Revenue is measured at the fair value of
the consideration received or receivable, and represents amounts receivable for goods supplied in the ordinary course of the Group activities, stated net of discounts, returns and value added taxes. The Company recognizes revenue when the amount of
revenue can be reliably measured and when it is probable that future economic benefits will flow to the entity. The amount of revenue is not considered to be reliably measured until all contingencies relating to the sale have been resolved.

Revenue from the sale of goods is recognized when:



| |  |  | The significant risks and rewards of the ownership of goods are transferred to the buyer;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The amount of revenue can be measured reliably;
| | - |  | -----------------------------------------------



| |  |  | It is probable that the economic benefits associated with the transaction will flow to the entity; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | The costs incurred or to be incurred in respect of the transaction can be measured reliably.
| | - |  | --------------------------------------------------------------------------------------------

For 2016 and
2015, sales generated by the Group are associated with C-Cathez, its proprietary catheter, and are marginal compared to its operating expenses. In 2016,
the group recognized the non refundable payment received from ONO Pharmaceuticals associated to the License Agreement executed in July 2016.

Licensing revenues

The license agreement with ONO
contracted in July 2016 includes non-refundable upfront fees, milestone payments (the receipt of which is dependent upon the achievement of certain clinical, regulatory or commercial milestones), royalties on
sales and sales milestones. The revenue recognition policies can be summarized as follows:

Upfront payments

Non-refundable upfront payments received in connection with research and development collaboration agreements and for
which there are subsequent deliverables are initially reported as deferred income and are recognized as revenue when earned over the period of the development collaboration. However, when non-refundable
upfront payments are received without further performance obligations, these are recognized when they become receivable



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Milestone payments

Research milestone payments are recognized as revenues when achieved. In addition, the payments have to be acquired irrevocably and the milestone payment
amount needs to be substantive and commensurate with the magnitude of the related achievement. Milestone payments that are not substantive, not commensurate or that are not irrevocable are recorded as deferred revenue. Revenue from these activities
can vary significantly from period to period due to the timing of milestones.

Other operating income

The Groups current operating income is generated from (i) government grants received from the European Commission under the Seventh Framework
Program (FP7) and (ii) government grants received from the Regional government (Walloon Region or Region) in the form of recoverable cash advances (RCAs).

Government Grant

Government grants are recognised at their fair
value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Once a government grant is recognized, any related contingent liability (or contingent asset) is treated in
accordance with IAS 39/IFRS9.

Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match
them with the costs that they are intended to compensate.

Recoverable cash advances (RCAs)

As explained above, the Group receives grants from the Regional government in the form of recoverable cash advances (RCAs).

RCAs are dedicated to support specific development programs. All RCA contracts, in essence, consist of three phases, i.e., the research phase, the
decision phase and the exploitation phase. During the research phase, the Group receives funds from the Region based on statements of expenses.

The RCAs are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the
grants are intended to compensate.

At the end of the research phase, the Group should within a period of six months decide whether or not to exploit the
results of the research phase (decision phase). The exploitation phase may have a duration of up to 10 years. In the event the Group decides to exploit the results under an RCA, the relevant RCA becomes contingently refundable.

In early 2016, the IFRS IC has concluded that contingently repayable cash received from a government to finance a research and development (R&D) project
is a financial liability under IAS 39 Financial Instruments: Recognition and Measurement. The liability should be initially recognized at fair value and any difference between, the cash received and the fair value of the liability should
be considered as a government grant, accounted for under IAS 20, Government Grants

When the Group does not exploit (or does not continue to
exploit) the results under an RCA, it has to notify the Region of this decision. This decision is of the sole responsibility of the Group. The RCA associated to the decision does not become refundable (respectively is no longer refundable as of the
calendar year after such decision), and the rights related to such results will be transferred to the Region. Also when the Group decides to renounce to its rights to patents which may result from the research, title to such patents will be
transferred to the Region.

Other government grants

The Group has received and will continue to apply grants to European (FP7) and Regional authorities. These grants are dedicated to partially finance early
stage projects such as fundamental research, applied research, prototype design, etc.

As per 31 December 2016, all grants received are not
associated to any conditions. As per contract, grants are paid upon submission by the Group of statement of expenses. The Company incurs project expenses first and asks for partial refunding according to the terms of the contracts.

The government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for
which the grants are intended to compensate.



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Intangible assets

Intangible assets acquired from third parties are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated impairment losses.

Internally generated intangible assets, excluding capitalised development costs
(when conditions are met), are not capitalised. Expenditure is reflected in the income statement in the year in which the expenditure is incurred.

The
useful life of intangible assets is assessed as finite. They are amortised over the expected useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is
accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement of in the expense
category consistent with the function of the intangible asset.

Gains or losses arising from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

Goodwill

A goodwill is an asset representing the future
economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised. Goodwill is measured as a residual at the acquisition date, as the excess of the fair value of the
consideration transferred and the assets and liabilities recognised (in accordance with IFRS 3).

Goodwill has an indefinite useful life and is tested for
impairment at least annually or more frequently whenever events or changes in circumstances indicate that goodwill may be impaired, as set forth in IAS 36 (Impairment of Assets)

In process research and development costs

The In-process research and development costs (IPRD) are capitalized as an indefinite-lived intangible asset until project has been completed or abandoned. IPRD is measured at fair value at the date of
acquisition and that fair value becomes the new historical cost for future subsequent amortization.

The IPRD is not eligible for the revaluation model
under IAS 38 Intangible assets because it is not traded on an active market, which is the requirement under IAS 38 for an intangible asset to avail of the revaluation model. Therefore, the IPRD cannot be subsequently revalued at fair
value.

Subsequent R&D expenditure can be capitalized as part of the IPRD only to the extent that IPRD is in development stage, i.e. when such
expenditure meets the recognition criteria of IAS 38. Assuming that under Celyad, development stage is reached when the intangible asset nears regulatory approval in Phase III, any R&D expenditure between the acquisition date and the development
stage should be treated as part of research phase and expensed in the income statement.

Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can
demonstrate:



| |  |  | the technical feasibility of completing the intangible asset so that it will be available for use or sale.
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | its intention to complete the intangible asset and use or sell it.
| | - |  | ------------------------------------------------------------------



| |  |  | its ability to use or sell the intangible asset.
| | - |  | ------------------------------------------------



| |  |  | how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself
or, if it is to be used internally, the usefulness of the intangible asset.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | its ability to measure reliably the expenditure attributable to the intangible asset during its development.
| | - |  | ------------------------------------------------------------------------------------------------------------

For the industry in which the Group operates, the life science industry, criteria a) and d) tend to be the most difficult to achieve. Experience shows that in
the Biotechnology sector technical feasibility of completing the project is met when such project completes successfully Phase III of its development. For medical devices this is usually met at the moment of CE marking.



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Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the
asset to be carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation of the asset begins when development has
been completed and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in Research & Development expenses. During the period of development, the asset is tested for impairment
annually.

As per 31 December 2016, only the development costs of C-Cathez are capitalized and amortized over
a period of 17 years which corresponds to the period over which the intellectual property is protected.

Patents, Licences and Trademarks

Payments related to the acquisition of technology rights are capitalised as intangible assets when the two following criteria are met:



| |  |  | it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the cost of the asset can be measured reliably.
| | - |  | -----------------------------------------------

Licences for the use of intellectual property are granted for
a period corresponding to the intellectual property of the assets licensed. Amortisation is calculated on a straight-line basis over this useful life.

Patents and licences are assessed for impairment whenever there is an indication these assets may be impaired. Indication of impairment is related to the
value of the patent demonstrated by the preclinical and clinical results of the technology.

Software

Software only concerns acquired computer software licences. Software is capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful lives of three years on a straight-line basis.

Property, plant and equipment

Plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Repair and maintenance costs
are recognised in the income statement of as incurred.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as
follows:



| |  |  | Land and buildings: 15 to 20 years
| | - |  | ----------------------------------



| |  |  | Plant and equipment: 5 to 15 years
| | - |  | ----------------------------------



| |  |  | Laboratory equipment: 3 to 5 years
| | - |  | ----------------------------------



| |  |  | Furniture: 3 to 10 years
| | - |  | ------------------------



| |  |  | Leasehold improvements: 3 to 10 years (based on duration of office building lease)
| | - |  | ----------------------------------------------------------------------------------

An item of property, plant
and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.

The
assets residual values, useful lives and methods of depreciation are reviewed at each financial year end, and adjusted prospectively, if applicable.

Leases

The determination of whether an
arrangement is, or contains, a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the
commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the income statement.

Leased assets are
depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and
the lease term.

Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.



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The Group has performed sale and leaseback transactions. If the sale and leaseback transaction results in a
finance lease, any excess of sales proceeds over the carrying amount is deferred and amortised over the lease term. If the transaction results in an operating lease and the transaction occurred at fair value, any profit or loss is recognised
immediately.

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used based on the discounted cash-flow model.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may
have decreased. If such indication exists, the Group estimates the assets or cash-generating units recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the assets recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement unless the asset is carried at a revalued amount, in which case the reversal is treated as a
revaluation increase.

The Group has four cash-generating units which consist of the development and commercialization activities on its the following
products, C-Cure, C-Cathez, Heart-Xs and
NKR-T. Indicators of impairment used by the Group are the preclinical and clinical results obtained with the technology.

Cash and cash equivalents

Cash and cash
equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less.

Financial assets

Classification

The Group classifies its financial assets in the following category: loans and receivables. The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the
reporting period. These are classified as non-current assets. The Groups loans and receivables comprise cash and cash equivalents, short-term deposits, trade and other
receivables and Deposits.

Initial recognition and measurement

All financial assets are recognised initially at fair value plus directly attributable transaction costs.

Subsequent measurement

After initial measurement, loans
and receivables are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an
integral part of the EIR. The EIR amortisation is included in finance income in the income statement. The losses arising from impairment are recognised in the income statement.

Impairment of financial assets

The Group assesses at
each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be
reliably estimated.



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Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated
future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost the Group first assesses individually whether objective evidence of impairment exists individually for financial
assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, it includes
the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised
are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has incurred, the amount of the loss is
measured as the difference between the assets carrying amount and the present value of estimated future cash flows.

The present value of the
estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Interest
income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance
income in the income statement. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because
of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the
recovery is credited to the income statement.

Financial liabilities

Classification

The Groups financial liabilities
include contingent consideration trade and other payables, bank overdrafts and loans and borrowings. The Group classifies its financial liabilities in the following category: financial liabilities measured at amortised cost using the effective
interest method.

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.

Subsequent measurement

The measurement of financial
liabilities depends on their classification as follows:

Contingent consideration

The contingent consideration is recognized and measured at fair value at the acquisition date and classified as a long term liability. After initial
recognition, contingent consideration arrangements that are classified as liabilities are re-measured at fair value with changes in fair value recognized in the income statement in accordance with IFRS 3 and
IAS 39. Therefore, contingent payments will not be eligible for capitalization but will simply reduce the contingent consideration liability.

Details
regarding the valuation of the contingent consideration are disclosed in Note 14 Business Combination

Trade payables and other payables

After initial recognition, trade payables and other payables are measured at amortised cost using the effective interest method.



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Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains
and losses are recognised in the income statement when the liabilities are derecognised.

Amortised cost is calculated by taking into account any discount
or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance expense in the income statement.

Derecognition

A financial liability is derecognised when
the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the income statement.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value
of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost.

On July 8, 2016, following the unsuccessful outcome of the conciliation procedure organized
under Swiss laws, a Swiss company named AtonRâ Partners SA has formalized its claim against us before the Tribunal of First Instance of Geneva (Switzerland). AtonRâ Partners SA claims the payment of respectively 95.250 EUR and 300.300
USD as alleged broker intermediary commissions in the context of our fund raising of 3 March 2015 and our Initial Public Offering (IPO) on the NASDAQ on 18 June 2015. We fully contest the merits of the claim and the jurisdiction of the
Tribunal as Atonrâ was not a party of the bank syndicate of these two placements. The procedure is pending and the Tribunal has not fixed the judgment date. The decision is subject to appeal in accordance with Swiss laws. No accrual is booked
as of December 31, 2016 on this claim.

Employee benefits

Defined contribution plan

The Group operates a pension
plan which requires contributions to be made by the Group to an insurance company. The pension plans is classified as a defined contribution plan. A defined contribution plan is a pension plan under which the Group pays fixed contributions per
employee into a separate fund. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits they are entitled to under the existing schemes.

However, because of the Belgian legislation applicable to 2nd pillar pension plans (so-called Law
Vandenbroucke), all Belgian defined contribution plans have to be considered under IFRS as defined benefit plans. Law Vandenbroucke states that in the context of defined contribution plans, the employer must guarantee a minimum return of 3.75%
on employee contributions and 3.25% on employer contributions. Because of this minimum guaranteed return for defined contributions plans in Belgium, the employer is exposed to a financial risk (there is a legal obligation to pay further
contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods).

Prior to 2014, the Group did not apply the defined benefit accounting for these plans because higher discount rates were applicable and the return on plan
assets provided by the insurance company was sufficient to cover the minimum guaranteed return. As a result of continuous low interest rates offered by the European financial markets, in 2014 Celyad has decided to measure and account for the
potential impact of defined benefit accounting for these pension plans with a minimum fixed guaranteed return because of the higher financial risk related to these plans than in the past. The prior year financial statements were not revised due to
such effect not being material.



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The Group has calculated the provision for employee benefit pension plans with the assistance of an independent
third-party actuarial firm The calculation is based on the projected unit credit method.

The liability recognized in the balance sheet in respect of the
pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.

The current service cost of the defined benefit plan, recognized in the income statement as part of the operating costs, reflects the increase in the defined
benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements.

Past-service costs are recognized
immediately in the income statement.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in the operating costs in the income statement.

Actuarial gains and losses arising
from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.

Short term benefits

Short-term employee benefits are
those expected to be settled wholly before twelve months after the end of the annual reporting period during which employee services are rendered, but do not include termination benefits such as wages, salaries, profit-sharing and bonuses and non-monetary benefits paid to current employees.

The undiscounted amount of the benefits expected to be paid in respect
of service rendered by employees in an accounting period is recognised in that period. The expected cost of short-term compensated absences is recognised as the employees render service that increases their entitlement or, in the case of non-accumulating absences, when the absences occur, and includes any additional amounts an entity expects to pay as a result of unused entitlements at the end of the period.

Share-based payments

Certain employees, managers and
members of the Board of Directors of the Group receive remuneration, as compensation for services rendered, in the form of share-based payments. It concerns equity-settled share-based payments.

Measurement

The cost of equity-settled share-based
payments is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model, further details are given in the Note 16.

Recognition

The cost of equity-settled share-based
payments is recognised, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Groups best estimate of the number of equity instruments that will ultimately vest.

The expense or credit for a period accounted for in the income statement represents the movement in cumulative expense recognised as of the beginning and end
of that period.

Modification

Where the terms of an
equity-settled transaction award are modified, the minimum expense recognised is the expense as if the terms had not been modified, if the original terms of the award were met. An additional expense is recognised for any modification that increases
the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Cancellation

An equity-settled award can be cancelled
with the departure of a beneficiary before the end of the vesting period, or cancelled and replaced by a new equity settled award. Where an equity-settled award is cancelled, the previously recognised expenses is offset directly in the equity of the
Group and credited against the retained earnings. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph. All cancellations of equity-settled transaction awards are treated equally.



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Taxes

Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:



| |  |  | Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it
is probable that the temporary differences will not reverse in the foreseeable future.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Deferred tax assets are recognised for all
deductible temporary differences, carry forward of unused tax credits and unused tax losses(except if the deferred tax asset arises from the initial recognition of an asset or liability in a transaction other than a business combination and that, at
the time of the transaction affects neither accounting nor taxable profit or loss), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is not probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax
liabilities and the deferred taxes relate to income taxes levied by the same taxation authority or either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Earnings (loss) per share

The basic net
profit/(loss) per share is calculated based on the weighted average number of shares outstanding during the period.

The diluted net profit/(loss) per
share is calculated based on the weighted average number of shares outstanding including the dilutive effect of potentially dilutive ordinary shares such as warrants and convertible debts. Potentially dilutive ordinary shares should be included in
diluted earnings (loss) per share when and only when their conversion to ordinary shares would decrease the net profit per share (or increase net loss per share).

Note 4. Risk Management

Financial risk factors

Interest rate risk

The interest rate risk is
very limited as the Group has only a limited amount of finance leases and no outstanding loans. So far, because of the materiality of the exposure, the Group did not enter into any interest hedging arrangements.

Credit risk

Seen the limited amount of trade receivables
due to the fact that sales to third parties are not significant, credit risk arises mainly from cash and cash equivalents and deposits with banks and financial institutions. The Group only works with international reputable commercial banks and
financial institutions.



F-18



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##### Table of Contents

Foreign exchange risk

The Group is exposed to foreign exchange risk as certain collaborations or supply agreements of raw materials are denominated in USD. Moreover, the Group has
also investments in foreign operations, whose net assets are exposed to foreign currency translation risk (USD). So far, because of the materiality of the exposure, the Group did not enter into any currency hedging arrangements. No sensitivity has
been performed on the foreign exchange risk as up till now this risk is still considered as immaterial by the Group.

Liquidity risk

The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool.

The Groups objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposit and finance leases.

The Group is exposed to liabilities and contingent liabilities as a result of the RCAs it has received from the Walloon Government. Out of the RCAs contracted
as of 31 December 2016, 21.2 million has been effectively paid out.

In 2017 and 2018, the Group will have to make an exploitation
decision on the remaining RCAs (Agreement 5951, 7246 and 7502) with a potential recognition of an additional liability of 4.9 million based on the contractual values.

We refer to Note 19 for an analysis of the Groups non-derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Capital management

The Groups objectives when
managing capital are to safeguard Celyad ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an adequate structure to limit to costs of capital.

Note 5. Critical accounting estimates and judgments

The
preparation of the Groups financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at
the end of the reporting period.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability
affected in future periods.

In the process of applying the Groups accounting policies, management has made judgments and has used estimates and
assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are addressed below.

Advances received from the Walloon Region: recognition of a contingent
liability

Change in accounting policy - RCA accounting

Following the IFRS IC interpretation rejection regarding IAS 20 Accounting for Government Grants and Disclosure for Government Assistance - Accounting
for repayable cash receipt issued in May 2016, Celyad decided to change its accounting policy regarding its RCAs. The IFRS IC has concluded that contingently repayable cash received from a government to finance a research and development
(R&D) project is a financial liability under IAS 39 Financial Instruments: Recognition and Measurement. The liability should be initially recognised at fair value and any difference between, the cash received and the fair value of
the liability should be considered as a government grant, accounted for under IAS 20, Government Grants.

Previously, Celyad accounted for
RCAs as government grant under IAS 20 which resulted in all cash received to be recorded as operating income. A provision for cash repayable was recognised under IAS 37 when Celyad notified the Walloon Region of its decision to exploit the outcome
of the research financed.

Given the clarification issued by IFRS IC, Celyad has decided to amend its accounting policy in respect of cash advance
received from the Walloon Region which are now considered, at inception, as a financial liability that should be recognised in accordance with IAS 39. In that context, Celyad has also chosen the fair value option for subsequent measurement of RCAs
on the basis that all RCAs financial liabilities are managed on a fair value basis.



F-19



---

##### Table of Contents

Such change in accounting policy requires the restatement of comparative figures. In this regards, Celyad has
performed the valuation of the financial liability at 31 December 2015 and at 31 December 2016 based on assumptions regarding the probability of success for respective projects that existed as at those dates without hindsight. The
assumptions included the estimation of the timing and the probability of successful commercialisation of the R&D results. In accordance with the RCA agreements, the following two components were assessed when calculating estimated future cash
flows:



| |  |  | 30% of the initial RCA is repayable when the company exploit the outcome of the research financed, and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | The remaining amount is repayable based on future sales milestones and the actual cash paid-out might range from 50% to 200% of the initial RCA, including interest depending on
RCA agreement.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Estimated future cash flows are discounted to their present value using discount rates ranging from 1.5 % to
12.5 % that reflect relevant risks related to each cash flow at 31 December 2015 and at 31 December 2016.

The financial liability of the
comparative period has been computed and found as not materially different from the previous provision recorded under IAS 37 for advances repayable as at 31 December 2015. Consequently, there is no restatement for comparative figures and a
reclassification from provision to financial liability has been made.

As per this clarification paper, RCAs should be recognised as a financial
liability in accordance with IFRS9/IAS 39. The Company applied the recommended accounting treatment retrospectively as of 31 December 2015 and no material difference was observed compared to the previous accounting treatment applied by the
Company. Therefore, no restatement of the consolidated financial position of the group is required as per IAS 8.

Advances received from the Walloon
Region only become contingently reimbursable if the Company notifies the Region of its decision to exploit the outcome of the research program funded with the advances received. At the end of this research phase, the Group should, within a period of
six months, decide whether or not to exploit the results of the research programs (decision phase). In the event the Group decides to exploit the results under an RCA, the relevant RCA becomes contingently repayable to the Walloon Region
and the Company determines its liability under IAS 39. When a contingent liability is recognised, estimates are required to determine the discount rate used to calculate the present value of those contingent liabilities as well as the determination
of the estimated cash flows.

The reimbursements of the RCAs to the Walloon Region consist of two elements, i.e., sales-dependent reimbursements (a
percentage of sales) and sales-independent reimbursements (an annual lump-sum).

Measurement of non-financial assets

Non current non financial assets are subject to impairment testing if the Group believes there
are material facts of evidences that justify such measurement. Measuring the fair value of a non financial assets requires judgement and estimates by management. These estimates could change substantially over time as new facts emerge or new
strategies are taken by the Group. Further details are contained in Note 7.

Business combinations

In respect of acquired businesses by the Group, significant judgement is made to determine whether these acquisitions are to be considered as an asset deal or
as a business combination. Determining whether a particular set of assets and activities is a business should be based on whether the integrated set is capable of being conducted and managed as a business by a market participant. Moreover,
management judgement is particularly involved in the recognition and fair value measurement of the acquired assets, liabilities, contingent liabilities and contingent consideration. In making this assessment management considers the underlying
economic substance of the items concerned in addition to the contractual terms.

Contingent consideration provisions

The Group makes provision for the estimated fair value of contingent consideration arrangements arising from business combinations. The estimated amounts are
the expected payments, determined by considering the possible scenarios of forecast sales and other performance criteria, the amount to be paid under each scenario, and the probability of each scenario, which is then discounted to a net present
value. The estimates could change substantially over time as new facts emerge and each scenario develops.

Deferred Tax Assets

Deferred tax assets for unused tax losses are recognised to the extent that it is probable that taxable profit will be available against which the losses can
be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.



F-20



---

##### Table of Contents

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they
are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most
appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment
transactions are disclosed in Note 16.

Note 6. Operating segment information

The chief operating decision-maker (CODM), who is responsible for allocating resources and assessing performance of the Group, has been identified
as the Board of Directors that makes strategic decisions.

As per 31 December 2014 the Group was operating in one operating segment as the second
segment (Immuno-oncology) resulted from the acquisition of Oncyte LLC in January 2015.



|                                                                   |  |                             |         |   |           |  |        |             |  |  |         |  
|------------------------------------------------------------------ |  | --------------------------- | ------- | - | --------- |  | ------ | ----------- |  |  | ------- | -
|000                                                              |  | For the year at end of 2014 |        
|                                                                   |  | Cardiology                  |         |   | Corporate |  |        | Group Total | 
|Revenue                                                            |  |                             | 146     |   |           |  |        |             |  |  | 146     |  
|Cost of Sales                                                      |  |                             | (115    | ) |           |  |        |             |  |  | (115    | )
|Gross Profit                                                       |  |                             | 31      |   |           |  |       |             |  |  | 31      |  
|Research & Development expenses                                    |  |                             | (15,865 | ) |           |  |       |             |  |  | (15,865 | )
|General & Administrative expenses                                  |  |                             |        |   |           |  | (5,016 | )           |  |  | (5,016  | )
|Other operating Income & Charges                                   |  |                             | 4,413   |   |           |  |       |             |  |  | 4,413   |  
|                                                                   |  |                             |         |   |           |  |        |             |  |  |         |  
|Operating Profit (Loss)                                            |  |                             | (11,421 | ) |           |  | (5,016 | )           |  |  | (16,437 | )
|                                                                   |  |                             |         |   |           |  |        |             |  |  |         |  
|Net Financial Charges                                              |  |                             |         |   |           |  | 236    |             |  |  | 236     |  
|Share of Loss of investments accounted for using the equity method |  |                             |         |   |           |  | (252   | )           |  |  | (252    | )
|Profit (Loss) before taxes                                         |  |                             | (11,421 | ) |           |  | (5,032 | )           |  |  | (16,453 | )
|Income Taxes                                                       |  |                             |         |   |           |  |        |             |  |  |        |  
|                                                                   |  |                             |         |   |           |  |        |             |  |  |         |  
|Profit (Loss) for the year 2015                                    |  |                             | (11,421 | ) |           |  | (5,032 | )           |  |  | (16,453 | )
|                                                                   |  |                             |         |   |           |  |        |             |  |  |         |  

In 2015, the management and the CODM have determined that as from 2015, there are two operating segments, respectively the
cardiology segment, regrouping the Cardiopoiesis platform, the Corquest platform and C-Cathez, and the immuno-oncology segment regrouping all assets developed based on the platform acquired from Oncyte LLC.

Although the Group is currently active in Europe and in the US, no geographical financial information is currently available given the fact that the core
operations are currently still in a study phase. No disaggregated information on product level or geographical level or any other level is currently existing and hence also not considered by the Board for assessing performance or allocating
resources.

CODM is not reviewing assets by segments, hence no segment information per assets is disclosed. As per 31 December 2016, all of the Group
non-current assets are located in Belgium, except (i) the Corquest intellectual property, valued at 1,5 million which is located in the US, (ii) the goodwill and IPRD of Oncyte also
located in the US and (iii) the leasehold improvements made in the offices of Celyad Inc located in Boston, USA.

During 2015, marginal revenues were
generated from external customers. All revenues generated relate to sales of C-Cathez to a limited number of customers located in the US.



|                                                                   |  |                             |         |   |                 |  |        |           |  |  |             |    |  |  |         |  
|------------------------------------------------------------------ |  | --------------------------- | ------- | - | --------------- |  | ------ | --------- |  |  | ----------- | -- |  |  | ------- | -
|000                                                              |  | For the year at end of 2015 |        
|                                                                   |  | Cardiology                  |         |   | Immuno-oncology |  |        | Corporate |  |  | Group Total |   
|Revenue                                                            |  |                             | 3       |   |                 |  |        |           |  |  |             |    |  |  | 3       |  
|Cost of Sales                                                      |  |                             | (1      | ) |                 |  |        |           |  |  |             |    |  |  | (1      | )
|Gross Profit                                                       |  |                             | 2       |   |                 |  |       |           |  |  |            |    |  |  | 2       |  
|Research & Development expenses                                    |  |                             | (20,634 | ) |                 |  | (2,132 | )         |  |  |             |    |  |  | (22,766 | )
|General & Administrative expenses                                  |  |                             |        |   |                 |  |       |           |  |  | (7,230      | )  |  |  | (7,230  | )
|Other operating Income & Charges                                   |  |                             | 218     |   |                 |  | 104    |           |  |  |             |    |  |  | 322     |  
|                                                                   |  |                             |         |   |                 |  |        |           |  |  |             |    |  |  |         |  
|Operating Profit (Loss)                                            |  |                             | (20,414 | ) |                 |  | (2,028 | )         |  |  | (7,230      | )  |  |  | (29,672 | )
|                                                                   |  |                             |         |   |                 |  |        |           |  |  |             |    |  |  |         |  
|Net Financial Charges                                              |  |                             |        |   |                 |  |       |           |  |  | 306         |    |  |  | 306     |  
|Share of Loss of investments accounted for using the equity method |  |                             |        |   |                 |  |       |           |  |  | 252         |    |  |  | 252     |  
|Profit (Loss) before taxes                                         |  |                             | (20,414 | ) |                 |  | (2,028 | )         |  |  | (6,672      | )  |  |  | (29,114 | )
|Income Taxes                                                       |  |                             |        |   |                 |  |       |           |  |  |            |    |  |  |        |  
|                                                                   |  |                             |         |   |                 |  |        |           |  |  |             |    |  |  |         |  
|Profit (Loss) for the year 2015                                    |  |                             | (20,414 | ) |                 |  | (2,028 | )         |  |  | (6,672      | )) |  |  | (29.114 | )
|                                                                   |  |                             |         |   |                 |  |        |           |  |  |             |    |  |  |         |  



F-21



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##### Table of Contents

In August 2016, the Group has received a non-refundable upfront payment
as a result of the ONO agreement. This upfront payment has been fully recognised upon receipt as there are no performance obligations nor subsequent deliverables associated to the payment. The non-refundable
upfront payment was rather received as a consideration for the sale of licence to ONO. In 2016, the total revenue generated through sales of C-Cathez was 0.1 million.



|                                  |  |                             |         |   |                 |  |         |           |  |  |             |   |  |  |         |  
|--------------------------------- |  | --------------------------- | ------- | - | --------------- |  | ------- | --------- |  |  | ----------- | - |  |  | ------- | -
|000                             |  | For the year at end of 2016 |        
|                                  |  | Cardiology                  |         |   | Immuno-oncology |  |         | Corporate |  |  | Group Total |  
|Revenue                           |  |                             | 84      |   |                 |  | 8,440   |           |  |  |             |   |  |  | 8,523   |  
|Cost of Sales                     |  |                             | (53     | ) |                 |  |         |           |  |  |             |   |  |  | (53     | )
|Gross Profit                      |  |                             | 31      |   |                 |  | 8,440   |           |  |  |            |   |  |  | 8,471   |  
|Research & Development expenses   |  |                             | (12,704 | ) |                 |  | (14,971 | )         |  |  |             |   |  |  | (27,675 | )
|General & Administrative expenses |  |                             |        |   |                 |  |        |           |  |  | (9,744      | ) |  |  | (9,744  | )
|Other operating Income & Charges  |  |                             | 1,540   |   |                 |  | 1,800   |           |  |  |             |   |  |  | 3,340   |  
|                                  |  |                             |         |   |                 |  |         |           |  |  |             |   |  |  |         |  
|Operating Profit (Loss)           |  |                             | (11,133 | ) |                 |  | (4,731  | )         |  |  | (9,744      | ) |  |  | (25,609 | )
|                                  |  |                             |         |   |                 |  |         |           |  |  |             |   |  |  |         |  
|Net Financial Charges             |  |                             |        |   |                 |  |        |           |  |  | 1,997       |   |  |  | 1,997   |  
|Profit (Loss) before taxes        |  |                             | (11,133 | ) |                 |  | (4,731  | )         |  |  | (7,747      | ) |  |  | (23,612 | )
|Income Taxes                      |  |                             |        |   |                 |  |        |           |  |  | 6           |   |  |  | 6       |  
|                                  |  |                             |         |   |                 |  |         |           |  |  |             |   |  |  |         |  
|Profit (Loss) for the year 2015   |  |                             | (11,133 | ) |                 |  | (4,731  | )         |  |  | (7,742      | ) |  |  | (23,606 | )
|                                  |  |                             |         |   |                 |  |         |           |  |  |             |   |  |  |         |  

Note 7: Intangible assets

The intangible assets are broken down as follows:



|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|-------------------------------- |  | -------- | ----- |  | --------------------------------- |  | ------ | ---------------- |  |  | ---------------------------- | - |  | -------- | ------ | - | ----- |  | ---- | - |  |  | ------ | -
|(000)                          |  | Goodwill |       |  | In-processresearch anddevelopment |  |        | Developmentcosts |  |  | Patents, licences,trademarks |   |  | Software |        |   | Total | 
|Cost:                            |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|At 1 January 2015                |  |          |       |  |                                   |  |        |                  |  |  | 1,057                        |   |  |          | 13,337 |   |       |  | 110  |   |  |  | 14,504 |  
|Additions                        |  |          |       |  |                                   |  |        |                  |  |  | 27                           |   |  |          |        |   |       |  |      |   |  |  | 27     |  
|Acquisition of Oncyte LLC        |  |          | 1,003 |  |                                   |  | 38,254 |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  | 39,257 |  
|Divestiture                      |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  | (3   | ) |  |  | (3     | )
|At 31 December 2015              |  |          | 1,003 |  |                                   |  | 38,254 |                  |  |  | 1,084                        |   |  |          | 13,337 |   |       |  | 107  |   |  |  | 53,785 |  
|Additions                        |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  | 95   |   |  |  | 95     |  
|Currency translation adjustments |  |          | 37    |  |                                   |  | 1,401  |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  | 1,438  |  
|Divestiture                      |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|At 31 December 2016              |  |          | 1,040 |  |                                   |  | 39,655 |                  |  |  | 1,084                        |   |  |          | 13,337 |   |       |  | 203  |   |  |  | 55,318 |  
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|Accumated amortisation           |  |          | 1,040 |  |                                   |  | 39,655 |                  |  |  | 1,084                        |   |  |          | 13,337 |   |       |  | 203  |   |  |  | 55,318 |  
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|At 1 January 2015                |  |          |       |  |                                   |  |        |                  |  |  | (146                         | ) |  |          | (4,023 | ) |       |  | (69  | ) |  |  | (4,238 | )
|Amortisation charge              |  |          |       |  |                                   |  |        |                  |  |  | (66                          | ) |  |          | (675   | ) |       |  | (19  | ) |  |  | (760   | )
|At 31 December 2015              |  |          |       |  |                                   |  |        |                  |  |  | (212                         | ) |  |          | (4,698 | ) |       |  | (85  | ) |  |  | (4,995 | )
|Amortisation charge              |  |          |       |  |                                   |  |        |                  |  |  | (66                          | ) |  |          | (675   | ) |       |  | (15  | ) |  |  | (756   | )
|Divestiture                      |  |          |      |  |                                   |  |       |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|At 31 December 2016              |  |          |      |  |                                   |  |       |                  |  |  | (279                         | ) |  |          | (5,373 | ) |       |  | (100 | ) |  |  | (5,752 | )
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|Net book value                   |  |          |      |  |                                   |  |       |                  |  |  | (279                         | ) |  |          | (5,373 | ) |       |  | (100 | ) |  |  | (5,752 | )
|Cost                             |  |          | 1,003 |  |                                   |  | 38,254 |                  |  |  | 1,084                        |   |  |          | 13,337 |   |       |  | 107  |   |  |  | 53,785 |  
|Accumulated amortisation         |  |          |      |  |                                   |  |       |                  |  |  | (213                         | ) |  |          | (4,698 | ) |       |  | (85  | ) |  |  | (4,995 | )
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|As at 31 December 2015           |  |          | 1,003 |  |                                   |  | 38,254 |                  |  |  | 871                          |   |  |          | 8,639  |   |       |  | 22   |   |  |  | 48,789 |  
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|Cost                             |  |          | 1,040 |  |                                   |  | 39,655 |                  |  |  | 1,084                        |   |  |          | 13,337 |   |       |  | 203  |   |  |  | 55,318 |  
|Accumulated amortisation         |  |          |       |  |                                   |  |        |                  |  |  | (279                         | ) |  |          | (5,373 | ) |       |  | (100 | ) |  |  | (5,752 | )
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  
|As at 31 December 2016           |  |          | 1,040 |  |                                   |  | 39,655 |                  |  |  | 805                          |   |  |          | 7,964  |   |       |  | 103  |   |  |  | 49,566 |  
|                                 |  |          |       |  |                                   |  |        |                  |  |  |                              |   |  |          |        |   |       |  |      |   |  |  |        |  



F-22



---

##### Table of Contents

The capitalised development costs relate to the development of C-Cathez.
Since May 2012 and the CE marking of C-Cathez, the development costs of C-Cathez are capitalized and depreciated over the estimate residual intellectual property
protection as of the CE marking (14 and 15 years respectively in 2015 and 2014). No other development costs have been capitalised up till now. All C-Cure and CAR-T NKR-2 related development costs have been assessed as not being eligible for capitalisation and have therefore been recognised in the income statement as research and development expenses. Software are amortized
over a period of 3 to 5 years.

Goodwill, In-process R&D, Patents, Licenses and Trademarks relate to the
following items:



| |  |  | Goodwill and In-process research and development resulted from the purchase price allocation exercise performed after the acquisition of Oncyte LLC . As of 31 December 2016,
Goodwill and In-Process Research and Development are not amortized.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A licence, granted in August 2007 by Mayo Clinic and related to C-Cure (for an amount of k9,500) upon the Groups inception and an extension to the licensed field of
use, granted on 29 October 2010 for a total amount of k2,344. The licence and its extension are amortised straight line over a period of 20 years.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Patents acquired upon the acquisition of CorQuest LLC in November 2014. The fair value of these intellectual rights was estimated at k1,492. These patents are amortised over 18 years, corresponding to the
remaining intellectual property protection filed for the first patent application in 2012.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management has not identified any impairment
indicators in relation to the intangible assets as mentioned above. Therefore, no impairment exercise was performed and hence no impairment losses were recognized.

Oncyte LLC goodwill and IPRD impairment test

Goodwill
and In-process research and development (IPRD) exclusively relate to the acquisition of Oncyte LLC which was acquired in 2015. The Group performed annual impairment test on goodwill and on indefinite
lived asset that are not amortized in accordance with the accounting policies stated in Notes 3 and 5. The impairment test has been performed at the level the CGU to which the goodwill and the IPRD belongs which represent the immuno-oncology
segment. The recoverable amount has been calculated based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections
based on 8-year period business plan based on probability of success of the CAR-T NKR-2 products as well as extrapolations of
projected cash flows resulting from the future expected sales associated with CAR-T NKR-2. Recoverable values of the CGU exceeded its carrying amounts. Accordingly, no
impairment loss was recognized on goodwill nor on the IPRD intangible assets for the year ended 31 December 2016.

Managements key assumptions
about projected cash flows when determining value in use are as follows:



|                                |  |                                                           
|------------------------------- |  | ----------------------------------------------------------
|       Discount rate           |  | 17,5% (industry standard for product candidate in Phase I)
|                                | 
|       Variance on Sales Price |  | variance of 5 and 10% of the estimated product price      



F-23



---

##### Table of Contents

The sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. The
following table presents the sensitivity analyses of the recoverable amount of the CGU associated to Oncyte LLC:



|                       |  |  |     |   |               |  |      |   |  |  |    |   |  |  |      |  
|---------------------- |  |  | --- | - | ------------- |  | ---- | - |  |  | -- | - |  |  | ---- | -
|                       |  |  |     |   | Discount rate | 
|Variance on Sale Price |  |  |     |   |               |  | 17,5 | % |  |  | 20 | % |  |  | 22,5 | %
|                       |  |  | 90  | % |               |  | 82   | % |  |  | 56 | % |  |  | 39   | %
|                       |  |  | 95  | % |               |  | 91   | % |  |  | 63 | % |  |  | 44   | %
|                       |  |  | 100 | % |               |  | 100  | % |  |  | 70 | % |  |  | 50   | %

Even at the lower sales price and higher discount rate, the recoverable value of the CGU exceeded its carrying amount as of
31 December 2016.

C-Cure impairment test

In June 2016, the clinical results of the CHART-1 European Phase III trial evaluating
C-Cure® cell therapy did not meet its primary endpoint. Consequently, in accordance with the Groups policies described in Note 3, the Group
performed an impairment test on the cash-generating unit (CGU) associated to the C-Cure products, including the Mayo license. The recoverable value of the CGU was determined based on a 15-year business plan based on probability of success of the C-Cure products as well as extrapolations of projected cash flows resulting from the future expected sales
associated with the C-Cure products. The recoverable value of the CGU exceeded its carrying amount. Accordingly, no impairment loss was recognized on the CGU related to
C-Cure products for the year ended 31 December 2016.

Managements main assumptions about projected cash
flows when determining value in use of the CGU associated to C-Cure products are as follows:



|                                                      |  |                                                           
|----------------------------------------------------- |  | ----------------------------------------------------------
|       Estimated probability of success              |  | 55% (industry standard for product candidate in Phase III)
|                                                      | 
|       Discount rate development stage of the
asset) |  | 7% (management estimate based on clinical                 

Sensitivity analyses of the recoverable amount of the CGU associated to C-Cure
products were calculated based on reasonably possible changes to each key assumption without considering simultaneous changes to these key assumptions. The following table presents the sensitivity analysis as follow:



|                       |  |  |    |   |               |  |     |   |  |  |    |   |  |  |    |  
|---------------------- |  |  | -- | - | ------------- |  | --- | - |  |  | -- | - |  |  | -- | -
|                       |  |  |    |   | Discount rate | 
|Probability of success |  |  |    |   |               |  | 7   | % |  |  | 11 | % |  |  | 15 | %
|                       |  |  | 25 | % |               |  | 47  | % |  |  | 32 | % |  |  | 22 | %
|                       |  |  | 40 | % |               |  | 73  | % |  |  | 50 | % |  |  | 35 | %
|                       |  |  | 55 | % |               |  | 100 | % |  |  | 68 | % |  |  | 47 | %

Even at the lower probability of success and higher discount rate, the recoverable value of the CGU exceeded its carrying
amount as of 31 December 2016.

Note 8: Property, plant and equipment



|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|------------------------- |  | --------- | ------ | - | ---------- |  | ---- | --------- |  |  | ----- | - |  |  | ------ | -
|(000)                   |  | Equipment |        |   | Furnitures |  |      | Leasehold |  |  | Total |  
|Cost:                     |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 1 January 2015         |  |           | 1,901  |   |            |  | 167  |           |  |  | 590   |   |  |  | 2,658  |  
|Additions                 |  |           | 486    |   |            |  | 0    |           |  |  | 325   |   |  |  | 811    |  
|Disposals                 |  |           | (12    | ) |            |  | (17  | )         |  |  | 0     |   |  |  | (29    | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 31 December 2015       |  |           | 2,375  |   |            |  | 150  |           |  |  | 915   |   |  |  | 3,440  |  
|Additions                 |  |           | 610    |   |            |  | 315  |           |  |  | 2,066 |   |  |  | 2,990  |  
|Acquisition of BMS SA     |  |           | 1,065  |   |            |  |      |           |  |  |       |   |  |  | 1,065  |  
|Disposals                 |  |           | (51    | ) |            |  |      |           |  |  | (34   | ) |  |  | (85    | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 31 December 2016       |  |           | 3,999  |   |            |  | 465  |           |  |  | 2,947 |   |  |  | 7,410  |  
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|Accumulated depreciation: |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 1 January 2015         |  |           | (1,346 | ) |            |  | (167 | )         |  |  | (547  | ) |  |  | (2,060 | )
|Depreciation charge       |  |           | (255   | ) |            |  |      |           |  |  | (18   | ) |  |  | (273   | )
|Disposals                 |  |           | 12     |   |            |  | 17   |           |  |  |       |   |  |  | 29     |  
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 31 December 2015       |  |           | (1,589 | ) |            |  | (150 | )         |  |  | (565  | ) |  |  | (2,304 | )
|Depreciation charge       |  |           | (380   | ) |            |  | (33  | )         |  |  | (347  | ) |  |  | (760   | )
|Acquisition of BMS SA     |  |           | (790   | ) |            |  |     |           |  |  |      |   |  |  | (790   | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|Disposals                 |  |           | 7      |   |            |  |     |           |  |  |      |   |  |  | 7      |  
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|At 31 December 2016       |  |           | (2,752 | ) |            |  | (184 | )         |  |  | (912  | ) |  |  | (3,847 | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|Net book value            |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|Cost                      |  |           | 2,375  |   |            |  | 150  |           |  |  | 915   |   |  |  | 3,440  |  
|Accumulated depreciation  |  |           | (1,589 | ) |            |  | (150 | )         |  |  | (565  | ) |  |  | (2,304 | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|As at 31 December 2015    |  |           | 786    |   |            |  | 0    |           |  |  | 350   |   |  |  | 1,136  |  
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|Cost                      |  |           | 3,999  |   |            |  | 465  |           |  |  | 2,947 |   |  |  | 7,410  |  
|Accumulated depreciation  |  |           | (2,752 | ) |            |  | (184 | )         |  |  | (912  | ) |  |  | (3,847 | )
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  
|As at 31 December 2016    |  |           | 1,246  |   |            |  | 281  |           |  |  | 2,035 |   |  |  | 3,563  |  
|                          |  |           |        |   |            |  |      |           |  |  |       |   |  |  |        |  



F-24



---

##### Table of Contents

Property, Plant and Equipment is mainly composed of office furniture, leasehold improvements, and laboratory
machinery and equipment.

The acquisition of BMS was accounted for as an asset deal. The fair value of the assets acquired is concentrated in one
identifiable asset, i.e. the GMP laboratories. The difference between the purchase price and the net assets of BMS at the date of acquisition is then allocated entirely to the Property, Plant and Equipment.

Finance leases

Lease contracts considered as finance
lease relate to some contracts with financial institutions and relate to laboratory and office equipment. All finance leases have a maturity of three years. A key common feature is that they include an option to purchase the leased asset at the end
of the three-year-lease term. The carrying value of plant and equipment held under finance leases at 31 December 2016 was 727k (31 December 2015 was 670k). The carrying value corresponds to the net investment in finance lease
at the end of period and includes the purchase option price.

Hereunder the summary of impacts in the P&L:

Depreciation and amortisation



|                                              |  |                                |       |  |      |  |       |      |  |  |     | 
|--------------------------------------------- |  | ------------------------------ | ----- |  | ---- |  | ----- | ---- |  |  | --- | 
|(000)                                       |  | For the year ended 31 December |       |  |      | 
|                                              |  | 2016                           |       |  | 2015 |  |       | 2014 | 
|Depreciation of property, plant and equipment |  |                                | 760   |  |      |  | 273   |      |  |  | 187 | 
|Amortisation of intangible assets             |  |                                | 756   |  |      |  | 760   |      |  |  | 677 | 
|                                              |  |                                |       |  |      |  |       |      |  |  |     | 
|Total depreciation and amortisation           |  |                                | 1,516 |  |      |  | 1,033 |      |  |  | 864 | 
|                                              |  |                                |       |  |      |  |       |      |  |  |     | 

Note 9: Non-current financial assets



|         |  |                   |     |  |      |  |     | 
|-------- |  | ----------------- | --- |  | ---- |  | --- | 
|(000)  |  | As of 31 December |    
|         |  | 2016              |     |  | 2015 | 
|Deposits |  |                   | 311 |  |      |  | 180 | 
|         |  |                   |     |  |      |  |     | 
|Total    |  |                   | 311 |  |      |  | 180 | 
|         |  |                   |     |  |      |  |     | 

The non-current financial assets are composed of security deposits paid to the lessors
of the building leased by the Group and to Social Security Contribution.

Note 10 : Inventories and Work in Progress

Not applicable

Note 11: Customer Accounts Receivable and
other current assets



|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|(000)                              |  | As of 31 December |      
|                                     |  | 2016              |       |  | 2015 |  |       | 2014 | 
|Trade receivable                     |  |                   |       |  |      |  |       |      |  |  |       | 
|Trade receivable                     |  |                   | 54    |  |      |  | 62    |      |  |  | 31    | 
|Advance deposits                     |  |                   | 663   |  |      |  | 288   |      |  |  | 701   | 
|Other receivables                    |  |                   | 643   |  |      |  | 199   |      |  |  | 98    | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|Total Trade and Other receivables    |  |                   | 1,359 |  |      |  | 549   |      |  |  | 830   | 
|Grants and Recoverable Cash Advances |  |                   |      |  |      |  | 104   |      |  |  | 1,009 | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|Prepaid expenses                     |  |                   | 615   |  |      |  | 544   |      |  |  | 212   | 
|VAT receivable                       |  |                   | 393   |  |      |  | 273   |      |  |  | 388   | 
|Other receivables                    |  |                   | 413   |  |      |  | 437   |      |  |  | 191   | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|Total Other current assets           |  |                   | 1,420 |  |      |  | 1,254 |      |  |  | 792   | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       | 



F-25



---

##### Table of Contents

As of 31 December 2016, other receivables mainly relate to credit notes to be received from suppliers and
advance deposits made to the THINK trial clinical vendors.

Grants and Recoverable Cash Advances refer to amounts due by the Walloon Region and are
related to Recoverable Cash Advances and grants agreements.

Impairment of receivables is assessed on an individual basis at the end of each accounting
year.

As per 31 December 2016 and 31 December 2015, no receivable was overdue. There were no carrying amounts for trade and other receivables
denominated in foreign currencies and no impairments were recorded.

Note 12: Short term investments



|                       |  |                   |        |  |                 |  |       |      |  |  |   | 
|---------------------- |  | ----------------- | ------ |  | --------------- |  | ----- | ---- |  |  | - | 
|(000)                |  | As of 31 December |        |  | As per 1January | 
|                       |  | 2016              |        |  | 2015            |  |       | 2014 | 
|Short term investments |  |                   | 34,230 |  |                 |  | 7,338 |      |  |  |  | 
|                       |  |                   |        |  |                 |  |       |      |  |  |   | 
|Total                  |  |                   | 34,230 |  |                 |  | 7,338 |      |  |  |  | 
|                       |  |                   |        |  |                 |  |       |      |  |  |   | 

Amounts recorded as short term investments in the current assets correspond to short term deposits with fixed interest rates.
Short-term deposits are made for variable periods depending on the short term cash requirements of the Group. Interest is calculated at the respective short-term deposit rates.

Note 13: Cash and Cash equivalents



|                         |  |                   |        |  |                 |  |         |      |  |  |  | 
|------------------------ |  | ----------------- | ------ |  | --------------- |  | ------- | ---- |  |  |  | 
|(000)                  |  | As of 31 December |        |  | As per 1January | 
|                         |  | 2016              |        |  | 2015            |  |         | 2014 | 
|Cash at bank and on hand |  |                   | 48,357 |  |                 |  | 100,175 |      |  |  |  | 
|                         |  |                   |        |  |                 |  |         |      |  |  |  | 
|Total                    |  |                   | 48,357 |  |                 |  | 100,175 |      |  |  |  | 
|                         |  |                   |        |  |                 |  |         |      |  |  |  | 

Cash at banks earn interest at floating rates based on daily bank deposit rates.

The credit quality of cash and cash equivalents and short-term deposit balances may be categorised between A-2 and A+
based on Standard and Poors rating at 31 December 2016.

Note 14: Investment in Subsidiaries

Subsidiaries fully consolidated



|                                     |  |                                              |  |                    |  |                                                        |     |   |                                                   |  |     |                                                                  |  |  |   |  
|------------------------------------ |  | -------------------------------------------- |  | ------------------ |  | ------------------------------------------------------ | --- | - | ------------------------------------------------- |  | --- | ---------------------------------------------------------------- |  |  | - | -
|Name                                 |  | Country ofIncorporation andPlace of Business |  | Nature of Business |  | Proportion ofordinaryshares directlyheld by parent (%) |     |   | Proportion ofordinary shares heldby the group (%) |  |     | Proportion ofordinary shares heldby non-controllinginterests (%) | 
|Celyad Inc                           |  | USA                                          |  | Biopharma          |  |                                                        | 100 | % |                                                   |  | 100 | %                                                                |  |  | 0 | %
|Oncyte LLC                           |  | USA                                          |  | Biopharma          |  |                                                        | 100 | % |                                                   |  | 100 | %                                                                |  |  | 0 | %
|CorQuest Inc                         |  | USA                                          |  | Medical Device     |  |                                                        | 100 | % |                                                   |  | 100 | %                                                                |  |  | 0 | %
|Biological Manufacturing Services SA |  | Belgium                                      |  | GMP laboratories   |  |                                                        | 100 | % |                                                   |  | 100 | %                                                                |  |  | 0 | %



F-26



---

##### Table of Contents

Biologicial Manufacturing Services SA (BMS) was acquired in May 2016. BMS owns GMP laboratories. BMS rent its
laboratories to Celyad SA since 2009 and until 30 April 2016. BMS was considered as a related party to Celyad.

Cardio3 Inc was incorporated in 2011
to support clinical and regulatory activities of the Group in the US. Cardio3 Inc was renamed in Celyad Inc in 2015. The growth of the activities of celyad Inc is associated to the development of the US clinical and regulatory activities of the
Group in the US. Celyad Inc shows a net loss for the year ended 31 December 2016 and 31 December 2015 of respectively $2,634K and $1,144K.

Corquest Inc was acquired on 5 November 2014. Corquest Inc. is developing Heart XS, a new access route to the left atrium. Oncyte LLC was acquired on
21 January 2015. Oncyte LLC is the company holding the CAR-T Cell portfolio of clinical-stage immuno-oncology assets.

Business Combinations

Corquest Medical, Inc.

On 5 November 2014 the Group acquired a 100% interest in CorQuest Medical, Inc. (CorQuest), a US private company based in Miami (Florida),
through a single cash payment of 1.5 million. With this acquisition, the Group intended to strengthen its Medical Device division. The CorQuest technology platform is fully complementary with Celyad
C-Cathez® and C-Cure® programs.

Although no workforce was transferred, this transaction was considered as a business combination since the Group acquired inputs and processes in the form of
intellectual property and will be able to progress this intellectual property further through the appropriate clinical and regulatory approval processes with the aim of obtaining CE mark approval in 2017 which would allow commercialisation in
Europe. In order to guarantee the transfer of knowledge an exclusive consultancy agreement was concluded with one of the sellers.

The following table
summarises the consideration paid for Corquest as well as the fair value of assets acquired at the acquisition date.



|                                                           |  |  |       | 
|---------------------------------------------------------- |  |  | ----- | 
|Consideration at 05 November 2014 (000)                  |  |  |       | 
|Cash                                                       |  |  | 1,500 | 
|                                                           |  |  |       | 
|Total consideration transferred                            |  |  | 1,500 | 
|                                                           |  |  |       | 
|Recognised amounts of identifiable assets acquired
(000) | 
|Licences & Patents                                         |  |  | 1,493 | 
|Trade and Other Receivables                                |  |  | 7     | 
|                                                           |  |  |       | 
|Total identifiable net assets                              |  |  | 1,500 | 
|                                                           |  |  |       | 

This acquisition has been subject to a Purchase Price Allocation process which consists in booking, at fair value,
all the assets and liabilities of a target company acquired in the consolidated balance sheet of the acquiring company. The acquired assets and liabilities have been valued at fair value by an independent firm.

The Licences and Patents of CorQuest can be considered as its only significant asset. It has been valued using a Risk-Adjusted Net Present Value
(rNPV) method. Patents acquired are depreciated over 18 years, corresponding to the remaining intellectual property protection filed for the first patent application in 2012.

There were no revenues contributed by Corquest Medical, Inc in the consolidated statement of comprehensive loss. Since 5 November 2014 all expenses
associated to the development of the assets acquired were incurred by Celyad SA.

Oncyte LLC

On 21 January 2015, the Company acquired 100% of the share capital of Oncyte LLC from Celdara Medical LLC in exchange for a cash consideration of
$11 million (of which $6 million paid upfront and $5 million when first cohort of CAR-T NKR-2 trial is completed) and 93,087 new shares of Celyad for a
total value of $4 million, or (3,451,680). The fair value of the 93,087 ordinary shares issued as part of the consideration paid for Oncyte LLC was based on a share price of 37.08, the share price at the acquisition.

Oncyte LLC is the company holding the CAR T-Cell portfolio of clinical-stage immuno-oncology assets. The portfolio
includes three autologous CAR-T Cell cell therapy products and an allogeneic T-Cell platform, targeting a broad range of cancer indications. CAR-T Cell immuno-oncology represents one of the most promising cancer treatment areas today.



F-27



---

##### Table of Contents

Although no workforce is transferred, this transaction is considered as a business combination since the Group
will be able to produce outputs based on the inputs acquired and processes transferred in the form of intellectual property. The transfer of knowledge to the Group is guaranteed by the conclusion of a service agreement between the Group and the
seller.

This acquisition has been subject to a Purchase Price Allocation, process which consists in booking, at fair value, all the assets
and liabilities of a target company acquired in the consolidated balance sheet of the acquiring company. The acquired assets and liabilities have been valued at fair value by the Group with the assistance of an independent third-party valuation
firm.

The following table summarises the consideration paid for Oncyte LLC, the fair value of assets acquired and liabilities assumed at the acquisition
date.



|                                                                                  |  |     |        |  |     |  |        | 
|--------------------------------------------------------------------------------- |  | --- | ------ |  | --- |  | ------ | 
|Consideration (000)                                                              |  | USD |        |  | EUR | 
|Cash upfront paid on 21 January 2015                                              |  |     | 6,000  |  |     |  | 5,186  | 
|Equity instruments (93,087 ordinary shares)                                       |  |     | 4,000  |  |     |  | 3,452  | 
|Deferred cash payment                                                             |  |     | 5,000  |  |     |  | 4,576  | 
|Contingent considerations                                                         |  |     | 27,896 |  |     |  | 25,529 | 
|CTA                                                                               |  |     |       |  |     |  | 514    | 
|                                                                                  |  |     |        |  |     |  |        | 
|Total consideration transferred                                                   |  |     | 42,896 |  |     |  | 39,257 | 
|                                                                                  |  |     |        |  |     |  |        | 
|                                                                                  |  |    
|Recognised amounts of identifiable assets acquired and liabilities assumed
(000) |  | USD |        |  | EUR | 
|Goodwill                                                                          |  |     | 1,096  |  |     |  | 1,003  | 
|In-Process Research and Development                                               |  |     | 41,800 |  |     |  | 38,254 | 
|                                                                                  |  |     |        |  |     |  |        | 
|Total identifiable net assets                                                     |  |     | 42,896 |  |     |  | 39,257 | 
|                                                                                  |  |     |        |  |     |  |        | 

The sales price also includes a contingent consideration payment, the potential remaining part of the purchase price, based on
future outcome of the research and development and potential future sales that are estimated at year end 2016, through a risk-adjusted Net Present Value, at $29.7 million, considering the impact of the discount and the probability of success
(28.2 million). For the successful development of the most advanced product CAR-T NKR-2, the seller could receive up to $45 million in development and
regulatory milestones until market approval. The seller will be eligible to additional payments on the other products upon achievement of development and regulatory milestones totalling up to $36.5 million per product. In addition, the seller
will receive up to $80 million in sales milestones when net sales will exceed $1 billion and royalties ranging from 5 to 8%.

No deferred taxes
have been taken up in the overview of fair value of assets acquired and liabilities assumed since the company elected for IRS Section 338 which lead to creating a tax deductible depreciation in the US Tax books.

Except the contingent consideration resulting from the business combination mentioned above, the carrying amount of all other financial assets and financial
liabilities is a reasonable approximation of the fair value. There were no changes in valuation techniques during the period.

The following table
presents the groups financial assets and liabilities that are measured at fair value at 31 December 2016:



|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|------------------------ |  | ------- | - |  | -------- |  | - | --------- |  |  | ------ |  |  |  | ------ | 
|(000)                  |  |         |   |  |          |  |   |           | 
|                         |  | Level I |   |  | Level II |  |   | Level III |  |  | Total  | 
|Assets                   |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|                         |  |         |  |  |          |  |  |           |  |  |       |  |  |  |       | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Total Assets             |  |         |  |  |          |  |  |           |  |  |       |  |  |  |       | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Liabilities              |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Contingent consideration |  |         |  |  |          |  |  |           |  |  | 28,179 |  |  |  | 28,179 | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Total Liabilities        |  |         |  |  |          |  |  |           |  |  | 28,179 |  |  |  | 28,179 | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 

Fair value measurements using significant unobservable inputs (Level 3):



|                                     |  |                                                 |        | 
|------------------------------------ |  | ----------------------------------------------- | ------ | 
|(000)                              |  | Contingentconsideration ina businesscombination |       
|Opening balanace at 1st January 2015 |  |                                                 |       | 
|                                     |  |                                                 |        | 
|Acquisition of OnCyte LLC            |  |                                                 | 25,529 | 
|                                     |  |                                                 |        | 
|Closing balance at 31 December 2015  |  |                                                 | 25,529 | 
|                                     |  |                                                 |        | 
|Year end 2016 Fair value adjsutment  |  |                                                 | 1,715  | 
|                                     |  |                                                 |        | 
|CTA                                  |  |                                                 | 935    | 
|                                     |  |                                                 |        | 
|Closing balance at 31 December 2016  |  |                                                 | 28,179 | 
|                                     |  |                                                 |        | 



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##### Table of Contents

The 2016 fair value adjustment of the contingent liability resulted from the progresses made in the clinical
development of CAR-NKR-2 and therefore the increase of likelihood of the payment of the next clinical development milestones.

Sensitivity analysis performed on the main assumptions driving the fair value of the contingent consideration:



|                           |  |               |       |   |       |  |       |       |  |  |       |  |  |       |       |   |  |  |       |  
|-------------------------- |  | ------------- | ----- | - | ----- |  | ----- | ----- |  |  | ----- |  |  | ----- | ----- | - |  |  | ----- | -
|                           |  | Discount rate |      
|                           |  | 15,5%         |       |   | 16,5% |  |       | 17,5% |  |  | 18,5% |  |  | 19,5% |      
|Cont. consideration (MUSD) |  |               | 31,42 |   |       |  | 29,59 |       |  |  | 27,90 |  |  |       | 26,32 |   |  |  | 24,86 |  
|Impact (%)                 |  |               | 6     | % |       |  | 6     | %     |  |  |      |  |  |       | -6    | % |  |  | -6    | %
|                           | 
|                           |  | Sales         |      
|                           |  | 80%           |       |   | 90%   |  |       | 100%  |  |  | 110%  |  |  | 120%  |      
|Cont. consideration (MUSD) |  |               | 24,76 |   |       |  | 26,33 |       |  |  | 27,90 |  |  |       | 30,04 |   |  |  | 32,00 |  
|Impact (%)                 |  |               | -6    | % |       |  | -6    | %     |  |  |      |  |  |       | 8     | % |  |  | 7     | %
|                           | 
|                           |  | Probabilities |      
|                           |  | 98%           |       |   | 99%   |  |       | 100%  |  |  | 101%  |  |  | 102%  |      
|Cont. consideration (MUSD) |  |               | 26,05 |   |       |  | 26,96 |       |  |  | 27,90 |  |  |       | 28,86 |   |  |  | 29,85 |  
|Impact (%)                 |  |               | -3    | % |       |  | -3    | %     |  |  |      |  |  |       | 3     | % |  |  | 3     | %

Note 15: Share Capital Issued

The number of shares issued is expressed in units.



|                                              |  |                   |           |  |      |  |           | 
|--------------------------------------------- |  | ----------------- | --------- |  | ---- |  | --------- | 
|                                              |  | As of 31 December |          
|                                              |  | 2016              |           |  | 2015 | 
|Number of ordinary shares                     |  |                   | 9,313,603 |  |      |  | 9,313,603 | 
|Share Capital (000)                         |  |                   | 32,571    |  |      |  | 32,571    | 
|                                              |  |                   |           |  |      |  |           | 
|Total number of issued and outstanding shares |  |                   | 9,313,603 |  |      |  | 9,313,603 | 
|                                              |  |                   |           |  |      |  |           | 
|Total share capital (000)                   |  |                   | 32,571    |  |      |  | 32,571    | 
|                                              |  |                   |           |  |      |  |           | 

As of 31 December 2016, the share capital amounts to 32,571k represented by 9,313,603 fully authorized and
subscribed and paid-up shares with a nominal value of 3.50. This number does not include warrants issued by the Company and granted to certain directors, employees and
non-employees of the Company.

History of the capital of the Company

The Company has been incorporated on 24 July 2007 with a share capital of 62,500 by the issuance of 409,375 class A shares. On 31 August 2007,
the Company has issued 261,732 class A shares to Mayo Clinic by way of a contribution in kind of the upfront fee that was due upon execution of the Mayo Licence for a total amount of 9,500,000.

Round B Investors have participated in a capital increase of the Company by way of a contribution in kind of a convertible loan (2,387,049) and a
contribution in cash (4,849,624 of which 1,949,624 uncalled) on 23 December 2008; 204,652 class B shares have been issued at the occasion of that capital increase. Since then, the capital is divided in 875,759 shares, of which
671,107 are class A shares and 204,652 are class B shares.

On 29 October 2010, the Company closed its third financing round resulting in a capital
increase totalling 12,100,809. The capital increase can be detailed as follows:



| |  |  | capital increase in cash by certain existing investors for a total amount of 2,609,320.48 by the issuance of 73,793 class B shares at a price of 35.36 per share;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | capital increase in cash by certain existing investors for a total amount of 471,240 by the issuance of 21,000 class B shares at a price of 22.44 per share;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | capital increase in cash by certain new investors for a total amount of 399,921.60 by the issuance of 9,048 class B shares at a price of 44.20 per share;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | exercise of 12,300 warrants (Warrants A) granted to the Round C investors with total proceeds of 276,012 and issuance of 12,300 class B shares. The exercise price was 22.44 per Warrant A;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | contribution in kind by means of conversion of the loan C for a total amount of 3,255,524.48 (accrued interest included) by the issuance of 92,068 class B shares at a conversion price of 35.36 per share;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | contribution in kind by means of conversion of the loan D for a total amount of 2,018,879.20 (accrued interest included) by the issuance of 57,095 class B shares at a conversion price of 35.36 per share. The
loan D is a convertible loan granted by certain investors to the Company on 14 October 2010 for a nominal amount of 2,010,000.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | contribution in kind of a payable towards Mayo Foundation for Medical Education and Research for a total amount of 3,069,911 by the issuance of 69,455 class B shares at a price of 44.20 per share. The
payable towards Mayo Clinic was related to (i) research undertaken by Mayo Clinic in the years 2009 and 2010, (ii) delivery of certain materials, (iii) expansion of the Mayo Clinical Technology Licence Contract by way the Second Amendment
dated 18 October 2010.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On 5 May 2011, pursuant the decision of the Extraordinary General Meeting, the capital was reduced by an
amount of 18,925,474 equivalent to the outstanding net loss as of 31 December 2010.

On 31 May 2013, the Company closed its fourth
financing round, the Round D financing. The convertible loans E, F, G and H previously recorded as financial debt were converted in shares which led to an increase in equity for a total amount of 28,645k of which 5,026k is
accounted for as capital and 6,988k as share premium. The remainder (16,613k) is accounted for as other reserves. Furthermore, a contribution in cash by existing shareholders of the Company led to an increase in share capital and issue
premium by an amount of 7,000k.

At the Extraordinary Shareholders Meeting of 11 June 2013 all existing classes of shares of the Company have
been converted into ordinary shares. Preferred shares have been converted at a 1 for 1 ratio and subsequently.

On 5 July 2013, the Company completed
its Initial Public Offering. The Company issued 1,381,500 new shares at 16.65 per shares, corresponding to a total of 23,002k.

On
15 July 2013, the over-allotment option was fully exercised for a total amount of 3,450k corresponding to 207,225 new shares. The total IPO proceeds amounted to 26,452k and the capital and the share premium of the Company increased
accordingly. The costs relating to the capital increases performed in 2013 amounted to 2.8 million and are presented in deduction of share premium.

On 11 June 2013, the Extraordinary General Shareholders Meeting of Celyad SA authorized the Board of Directors to increase the share capital of the
Company, in one or several times, and under certain conditions set forth in extenso in the articles of association. This authorization is valid for a period of five years starting on 26 July 2013 and until 26 July 2018. The Board of
Directors may increase the share capital of the Company within the framework of the authorized capital for an amount of up to 21,413k.

Over the
course of 2014, the capital of the Company was increased in June 2014 by way of a capital increase of 25,000k represented by 568,180 new shares fully subscribed by Medisun International Limited.

In 2014, the capital of the Company was also increased by way of exercise of Company warrants. Over four different exercise periods, 139,415 warrants were
exercised resulting in the issuance of 139,415 new shares. The capital and the share premium of the Company were therefore increased respectively by 488k and 500k.

In January 2015, the shares of Oncyte LLC were contributed to the capital of the Company, resulting in a capital increase of 3,452k and the issuance of
93,087 new shares.

In 2015, the Company conducted two fund raising. A private placement was closed in March resulting in a capital increase of
31,745k represented by 713,380 new shares. The Company also completed an IPO on Nasdaq in June, resulting in a capital increase of 87,965k represented by 1,460,000 new shares.

Also in 2015, the capital of the Company was also increased by way of exercise of Company warrants. Over three different exercise periods, 6,749 warrants were
exercised resulting in the issuance of 6,749 new shares. The capital and the share premium of the Company were therefore increased respectively by 23k and 196k.

There was no capital increase in 2016. As of 31 December 2016 all shares issued have been fully paid.



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##### Table of Contents

The following share issuances occurred since the incorporation of the Company:



|                |  |                  |  |                                                             |  |             |           |  |                  |  |       | 
|--------------- |  | ---------------- |  | ----------------------------------------------------------- |  | ----------- | --------- |  | ---------------- |  | ----- | 
|Category        |  | Transaction date |  | Description                                                 |  | # of shares |           |  | Par value (in ) | 
|Class A shares  |  | 24 July 2007     |  | Company incorporation                                       |  |             | 409,375   |  |                  |  | 0.15  | 
|Class A shares  |  | 31 August 2007   |  | Contribution in kind (upfront fee Mayo Licence)             |  |             | 261,732   |  |                  |  | 36.30 | 
|Class B shares  |  | 23 December 2008 |  | Capital increase (Round B)                                  |  |             | 137,150   |  |                  |  | 35.36 | 
|Class B shares  |  | 23 December 2008 |  | Contribution in kind (Loan B)                               |  |             | 67,502    |  |                  |  | 35.36 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in cash                                        |  |             | 21,000    |  |                  |  | 22.44 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in kind (Loan C)                               |  |             | 92,068    |  |                  |  | 35.36 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in kind (Loan D)                               |  |             | 57,095    |  |                  |  | 35.36 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in cash                                        |  |             | 73,793    |  |                  |  | 35.36 | 
|Class B shares  |  | 28 October 2010  |  | Exercise of warrants                                        |  |             | 12,300    |  |                  |  | 22.44 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in kind (Mayo receivable)                      |  |             | 69,455    |  |                  |  | 44.20 | 
|Class B shares  |  | 28 October 2010  |  | Contribution in cash                                        |  |             | 9,048     |  |                  |  | 44.20 | 
|Class B shares  |  | 31 May 2013      |  | Contribution in kind (Loan E)                               |  |             | 118,365   |  |                  |  | 38,39 | 
|Class B shares  |  | 31 May 2013      |  | Contribution in kind (Loan F)                               |  |             | 56,936    |  |                  |  | 38,39 | 
|Class B shares  |  | 31 May 2013      |  | Contribution in kind (Loan G)                               |  |             | 654,301   |  |                  |  | 4,52  | 
|Class B shares  |  | 31 May 2013      |  | Contribution in kind (Loan H)                               |  |             | 75,755    |  |                  |  | 30,71 | 
|Class B shares  |  | 31 May 2013      |  | Contribution in cash                                        |  |             | 219,016   |  |                  |  | 31,96 | 
|Class B shares  |  | 4 June 2013      |  | Conversion of warrants                                      |  |             | 2,409,176 |  |                  |  | 0,01  | 
|Ordinary shares |  | 11 June 2013     |  | Conversion of Class A and Class B shares in ordinary shares |  |             | 4,744,067 |  |                  |  |      | 
|Ordinary shares |  | 5 July 2013      |  | Initial Public Offering                                     |  |             | 1,381,500 |  |                  |  | 16.65 | 
|Ordinary shares |  | 15 July 2013     |  | Exercise of over-allotment option                           |  |             | 207,225   |  |                  |  | 16.65 | 
|Ordinary shares |  | 31 January 2014  |  | Exercise of warrants issued in September 2008               |  |             | 5,966     |  |                  |  | 22.44 | 
|Ordinary shares |  | 31 January 2014  |  | Exercise of warrants issued in May 2010                     |  |             | 333       |  |                  |  | 22.44 | 
|Ordinary shares |  | 31 January 2014  |  | Exercise of warrants issued in January 2013                 |  |             | 120,000   |  |                  |  | 4.52  | 
|Ordinary shares |  | 30 April 2014    |  | Exercise of warrants issued in September 2008               |  |             | 2,366     |  |                  |  | 22.44 | 
|Ordinary shares |  | 16 June 2014     |  | Capital increase                                            |  |             | 284,090   |  |                  |  | 44.00 | 
|Ordinary shares |  | 30 June 2014     |  | Capital increase                                            |  |             | 284,090   |  |                  |  | 44.00 | 
|Ordinary shares |  | 4 August 2014    |  | Exercise of warrants issued in September 2008               |  |             | 5,000     |  |                  |  | 22.44 | 
|Ordinary shares |  | 4 August 2014    |  | Exercise of warrants issued in October 2010                 |  |             | 750       |  |                  |  | 35.36 | 
|Ordinary shares |  | 3 November 2014  |  | Exercise of warrants issued in September 2008               |  |             | 5,000     |  |                  |  | 22.44 | 
|Ordinary shares |  | 21 January 2015  |  | Contribution in kind (Oncyte LLC)                           |  |             | 93,087    |  |                  |  | 37.08 | 
|Ordinary shares |  | 7 February 2015  |  | Exercice of warrant issued in May 2010                      |  |             | 333       |  |                  |  | 22.44 | 
|Ordinary shares |  | 3 March 2015     |  | Capital increase                                            |  |             | 713,380   |  |                  |  | 44.50 | 
|Ordinary shares |  | 11 May 2015      |  | Exercice of warrant issued in May 2010                      |  |             | 500       |  |                  |  | 22.44 | 
|Ordinary shares |  | 24 June 2015     |  | Capital increase                                            |  |             | 1,460,000 |  |                  |  | 60.25 | 
|Ordinary shares |  | 4 August 2015    |  | Exercice of warrant issued in May 2010                      |  |             | 666       |  |                  |  | 22.44 | 
|Ordinary shares |  | 4 August 2015    |  | Exercice of warrant issued in October 2010                  |  |             | 5,250     |  |                  |  | 35.36 | 



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##### Table of Contents

|       |  |                                                                                               |  |               |        |  |               |  |         |                  |  |  |               |  |  |  |         | 
|------ |  | --------------------------------------------------------------------------------------------- |  | ------------- | ------ |  | ------------- |  | ------- | ---------------- |  |  | ------------- |  |  |  | ------- | 
|(000) |  |                                                                                               |  |               |        |  |               |  |         |                  |  |  |               | 
|Date   |  | Nature of the transactions                                                                    |  | Share Capital |        |  | Share premium |  |         | Number of shares |  |  | Nominal value | 
|       |  | Balance as of January 1, 2015                                                                 |  |               | 24,615 |  |               |  | 53,302  |                  |  |  | 7,040,387     |  |  |  | 81,882  | 
|       |  | Issue of shares related to exercise of warrants                                               |  |               | 23     |  |               |  | 196     |                  |  |  | 6,749         |  |  |  | 219     | 
|       |  | Contribution in kind of shares of Oncyte LLC (after deduction of transaction costs)           |  |               | 326    |  |               |  | 3,126   |                  |  |  | 93,087        |  |  |  | 3,363   | 
|       |  | Capital increase by issuance of ordinary common shares (after deduction of transaction
costs) |  |               | 7,607  |  |               |  | 101,327 |                  |  |  | 2,173.380     |  |  |  | 119,710 | 
|       |  | Share based payments                                                                          |  |               |       |  |               |  | 59      |                  |  |  |              |  |  |  | 59      | 
|       |  |                                                                                               |  |               |        |  |               |  |         |                  |  |  |               |  |  |  |         | 
|       |  | Balance as of December 31, 2015                                                               |  |               | 32,571 |  |               |  | 158,010 |                  |  |  | 9,313,603     |  |  |  | 205,233 | 
|       |  |                                                                                               |  |               |        |  |               |  |         |                  |  |  |               |  |  |  |         | 
|       |  | Balance as of December 31, 2016                                                               |  |               | 32,571 |  |               |  | 158,010 |                  |  |  | 9,313,603     |  |  |  | 205,233 | 
|       |  |                                                                                               |  |               |        |  |               |  |         |                  |  |  |               |  |  |  |         | 

The total number of shares issued and outstanding as of 31 December 2015 and 2016 totals 9,313,603 and are ordinary
common shares.

Note 16: Share-based payments

The
Company operates an equity-based compensation plan, whereby warrants are granted to directors, management and selected employees and non-employees. The warrants are accounted for as equity-settled share-based
payment plans since the Company has no legal or constructive obligation to repurchase or settle the warrants in cash.

Each warrant gives the
beneficiaries the right to subscribe to one common share of the Company. The warrants are granted for free and have an exercise price equal to the fair market price of the underlying shares at the date of the grant, as determined by the Board of
Directors of the Company.

Movements in the number of warrants outstanding and their related weighted average exercise prices are as follows:



|                            |  |                                       |       |  |                    |  |         |                                       |  |  |                    |  |  |  |         | 
|--------------------------- |  | ------------------------------------- | ----- |  | ------------------ |  | ------- | ------------------------------------- |  |  | ------------------ |  |  |  | ------- | 
|                            |  |                                       |       |  | 2016               |  |         |                                       |  |  | 2015               | 
|                            |  | Weighted averageexercise price (in ) |       |  | Number of warrants |  |         | Weighted averageexercise price (in ) |  |  | Number of warrants | 
|Outstanding as of 1 January |  |                                       | 11.61 |  |                    |  | 319,330 |                                       |  |  | 9.57               |  |  |  | 296,930 | 
|Granted                     |  |                                       | 33.10 |  |                    |  | 343,550 |                                       |  |  | 35.68              |  |  |  | 45,400  | 
|Forfeited                   |  |                                       | 34.20 |  |                    |  | 91,436  |                                       |  |  | 32.87              |  |  |  | 16,251  | 
|Exercised                   |  |                                       |      |  |                    |  |        |                                       |  |  | 32.49              |  |  |  | 6,749   | 
|Expired                     |  |                                       |      |  |                    |  |        |                                       |  |  |                   |  |  |  |        | 
|At 31 December              |  |                                       | 20.92 |  |                    |  | 571,444 |                                       |  |  | 11.61              |  |  |  | 319,330 | 

There was no warrant exercised in 2016.

Warrants outstanding at the end of the year have the following expiry date and exercise price:



|                         |  |                  |  |             |  |                                                      |         |  |                                                      |  |         |                         |  |  |       | 
|------------------------ |  | ---------------- |  | ----------- |  | ---------------------------------------------------- | ------- |  | ---------------------------------------------------- |  | ------- | ----------------------- |  |  | ----- | 
|Grant date               |  | Vesting date     |  | Expiry date |  | Number of warrantsoutstanding as of 31December, 2016 |         |  | Number of warrantsoutstanding as of 31December, 2015 |  |         | Exercise price pershare | 
|05 May 2010 (warrants B) |  | 05 May 2010      |  | 31 Dec 2016 |  |                                                      | 5,000   |  |                                                      |  | 5,000   |                         |  |  | 35.36 | 
|05 May 2010 (warrants C) |  | 05 May 2013      |  | 31 Dec 2016 |  |                                                      | 799     |  |                                                      |  | 799     |                         |  |  | 22.44 | 
|29 Oct 2010              |  | 29 Oct 2013      |  | 31 Dec 2020 |  |                                                      | 1,632   |  |                                                      |  | 1,632   |                         |  |  | 35.36 | 
|06 May 2013              |  | 06 May 2016      |  | 31 Dec 2023 |  |                                                      | 232,100 |  |                                                      |  | 232,100 |                         |  |  | 2.64  | 
|05 May 2014              |  | 05 May 2017      |  | 31 Dec 2024 |  |                                                      | 62,864  |  |                                                      |  | 79,799  |                         |  |  | 36.66 | 
|05 November 2015         |  | 05 November 2018 |  | 31 Dec 2025 |  |                                                      | 269,049 |  |                                                      |  |        |                         |  |  | 32.86 | 
|                         |  |                  |  |             |  |                                                      |         |  |                                                      |  |         |                         |  |  |       | 
|                         |  |                  |  |             |  |                                                      | 571,444 |  |                                                      |  | 319,330 |                         |  |  |       | 
|                         |  |                  |  |             |  |                                                      |         |  |                                                      |  |         |                         |  |  |       | 

Warrants issued on 5 November 2015

At the Extraordinary Shareholders Meeting of 5 November 2015, a plan of 466,000 warrants was approved. Warrants were offered to Companys new comers
(employees, non-employees and directors) in five different tranches. Out of the warrants offered, 343,550 warrants were accepted by the beneficiaries and 269,049 warrants are outstanding on the date hereof.

These warrants will be vested in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary the issuance.
The warrants that are vested can only be exercised at the



F-32



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##### Table of Contents

end of the third calendar year following the issuance date, thus starting on 1 January 2019. The exercise price of the different tranches ranges from 15.90 to 34.65. Warrants not
exercised within 10 years after issue become null and void.

On 12 December 2016, the Board of Directors issued a new plan of 100,000 warrants. An
equivalent number of warrants were cancelled from the remaining pool of warrants of the plan of 5 November 2015.

The fair value of the warrants has
been determined at grant date based on the Black-Scholes formula. The variables, used in this model, are:



|                                                           |  |                         |       |   |                         |  |        |                |  |  |                 |   |  |            |         |   |  |  |         |  
|---------------------------------------------------------- |  | ----------------------- | ----- | - | ----------------------- |  | ------ | -------------- |  |  | --------------- | - |  | ---------- | ------- | - |  |  | ------- | -
|                                                           |  | Warrants issued on      |      
|                                                           |  | 05 May 2010(warrants B) |       |   | 05 May 2010(warrants C) |  |        | 29 October2010 |  |  | 31 January 2013 |   |  | 6 May 2013 |        
|Number of warrants issued                                  |  |                         | 5,000 |   |                         |  | 30,000 |                |  |  | 79,500          |   |  |            | 140,000 |   |  |  | 266,241 |  
|Number of warrants granted                                 |  |                         | 5,000 |   |                         |  | 21,700 |                |  |  | 61,050          |   |  |            | 120,000 |   |  |  | 253,150 |  
|Number of warrants not fully vested as of 31 December 2016 |  |                         |      |   |                         |  |       |                |  |  |                |   |  |            |        |   |  |  |        |  
|Value of shares                                            |  |                         | 22.44 |   |                         |  | 22.44  |                |  |  | 35.36           |   |  |            | 4.52    |   |  |  | 14.99   |  
|Exercise price (in )                                      |  |                         | 35.36 |   |                         |  | 22.44  |                |  |  | 35.36           |   |  |            | 4.52    |   |  |  | 2.64    |  
|Expected share value volatility                            |  |                         | 35.60 | % |                         |  | 35.60  | %              |  |  | 35.60           | % |  |            | 35.60   | % |  |  | 39.55   | %
|Risk-free interest rate                                    |  |                         | 3.31  | % |                         |  | 3.31   | %              |  |  | 3.21            | % |  |            | 2.30    | % |  |  | 2.06    | %
|Fair value (in )                                          |  |                         | 5.72  |   |                         |  | 9.05   |                |  |  | 9.00            |   |  |            | 2.22    |   |  |  | 12.44   |  
|Weighted average remaining contractual life                |  |                         | 0.42  |   |                         |  | 0.42   |                |  |  | 4.78            |   |  |            | 7.09    |   |  |  | 7.35    |  



|                                                           |  |                    |         |   |                    |  |         |     
|---------------------------------------------------------- |  | ------------------ | ------- | - | ------------------ |  | ------- | ----
|                                                           |  | Warrants issued on |        
|                                                           |  | 5 May 2014         |         |   | 5 November 2015[1] | 
|Number of warrants issued                                  |  |                    | 100,000 |   |                    |  | 466,000 |     
|Number of warrants granted                                 |  |                    | 94,400  |   |                    |  | 343,550 |     
|Number of warrants not fully vested as of 31 December 2016 |  |                    | 62,864  |   |                    |  | 269,049 |     
|Value of shares                                            |  |                    | 35.79   |   |                    |  | 32.86   |     
|Exercise price (in )                                      |  |                    | 35.79   |   |                    |  | 32.86   | [4] 
|Expected share value volatility                            |  |                    | 67.73   | % |                    |  | 57.06   | %[2]
|Risk-free interest rate                                    |  |                    | 1.09    | % |                    |  | 0.26    | %   
|Fair value (in )                                          |  |                    | 26.16   |   |                    |  | 21.02   | [3] 
|Weighted average remaining contractual life                |  |                    | 8.35    |   |                    |  | 9.62    |     



|(1) | Warrants issued on 5 November 2015 were offered in several tranches, in January 2016, April 2016, September 2016, November 2016 and January 2017. Assumptions on each tranche are disclosed in the following notes
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The volatility has been determined based on the stock price evolution post IPO: 57.06% in January 2016, 57.83% in April 2016, 63.34% in September 2016, 62.27% in November 2016 and 61.66% in January 2017.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The fair value of the five tranches are 22.10 in January 2016, 20.65 in April 2016, 16.77 in September 2016, 14.20 in November 2016 and 10.73 in January 2017.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | The value of shares and exercise price of the five tranches are 34.65 in January 2016, 32.60 in April 2016, 24.39 in September 2016, 20.90 in November 2016 and 15.90 in January 2017.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The total net expense recognized in the income statement for the outstanding warrants totals 2,847k for 2016 (2015: 796k).

Note 17: Post Employment benefits



|                    |  |                   |     |  |      |  |     | 
|------------------- |  | ----------------- | --- |  | ---- |  | --- | 
|(000)              |  | As of 31 December |    
|                    |  | 2016              |     |  | 2015 | 
|Pension obligations |  |                   | 204 |  |      |  | 121 | 
|                    |  |                   |     |  |      |  |     | 
|Total               |  |                   | 204 |  |      |  | 121 | 
|                    |  |                   |     |  |      |  |     | 

The Group operates a pension plan which requires contributions to be made by the Group to an insurance company. The pension
plan is a defined contribution plan. However, because of the Belgian legislation applicable to 2nd pillar pension plans (so-called Law Vandenbroucke), all Belgian defined contribution plans have to
be accounted for under IFRS as defined benefit plans because of the minimum guaranteed returns on these plans.



F-33



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Prior to 2014, the Group did not apply the defined benefit accounting for these plans because higher discount
rates were applicable and the return on plan assets provided by the insurance company was sufficient to cover the minimum guaranteed return. Since 2014 and as a result of continuous low interest rates offered by the European financial markets,
Celyad is at year end measuring and accounting for the potential impact of defined benefit accounting for these pension plans with a minimum fixed guaranteed return because of the higher financial risk related to these plans than in the past. The
prior year financial statements were not revised due to such effect not being material.

The contributions to the plan are determined as a percentage of
the yearly salary. There are no employee contributions. The benefit also includes a death in service benefit.

The amounts recognized in the balance sheet
are determined as follows:



|                                               |  |                   |        |   |      |  |        |  
|---------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | -
|                                               |  | As of 31 December |       
|(000)                                        |  | 2016              |        |   | 2015 | 
|Present value of funded obligations            |  |                   | 1,509  |   |      |  | 1,212  |  
|Fair value of plan assets                      |  |                   | (1,305 | ) |      |  | (1,091 | )
|                                               |  |                   |        |   |      |  |        |  
|Deficit of funded plans                        |  |                   | 204    |   |      |  | 121    |  
|Total deficit of defined benefit pension plans |  |                   | 204    |   |      |  | 121    |  
|Liability in the balance sheet                 |  |                   | 204    |   |      |  | 121    |  
|                                               |  |                   |        |   |      |  |        |  

The movement in the defined benefit liability over the year is as follows:



|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|-------------------------------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ |  | ----- | ----- |  |  | ---- | -
|(000)                                                                          |  | Present value ofobligation |       |   | Fair value of planassets |  |       | Total | 
|As of 1 January 2015                                                             |  |                            | 1,073 |   |                          |  | 891   |       |  |  | 182  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Current service cost                                                             |  |                            | 159   |   |                          |  |       |       |  |  | 159  |  
|Interest expense/(income)                                                        |  |                            | 24    |   |                          |  | 20    |       |  |  | 4    |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|                                                                                 |  |                            | 1,256 |   |                          |  | 911   |       |  |  | 345  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Remeasurements                                                                   |  |                            |       |   |                          |  |       |       |  |  |      |  
|- return on plan assets, excluding amounts included in interest expense/(income) |  |                            |      |   |                          |  | (2    | )     |  |  | (2   | )
|- (Gain)/loss from change in financial assumptions                               |  |                            | (57   | ) |                          |  |      |       |  |  | (57  | )
|- Experience (gains)/losses                                                      |  |                            | 44    |   |                          |  |      |       |  |  | 44   |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|                                                                                 |  |                            | (13   | ) |                          |  | (2    | )     |  |  | (15  | )
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Employer contributions:                                                          |  |                            |      |   |                          |  | 209   |       |  |  | (209 | )
|Benefits Paid                                                                    |  |                            | (31   | ) |                          |  | (31   | )     |  |  |     |  
|At 31 December 2015                                                              |  |                            | 1,212 |   |                          |  | 1,089 |       |  |  | 121  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|As of 1 January 2016                                                             |  |                            | 1,212 |   |                          |  | 1,089 |       |  |  | 121  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Current service cost                                                             |  |                            | 192   |   |                          |  |       |       |  |  | 192  |  
|Interest expense/(income)                                                        |  |                            | 33    |   |                          |  | 29    |       |  |  | 4    |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|                                                                                 |  |                            | 1,437 |   |                          |  | 1,118 |       |  |  | 319  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Remeasurements                                                                   |  |                            |       |   |                          |  |       |       |  |  |      |  
|- return on plan assets, excluding amounts included in interest expense/(income) |  |                            |       |   |                          |  | 1     |       |  |  | 1    |  
|- (Gain)/loss from change in financial assumptions                               |  |                            | 77    |   |                          |  |       |       |  |  | 77   |  
|- Experience (gains)/losses                                                      |  |                            | 29    |   |                          |  |       |       |  |  | 29   |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|                                                                                 |  |                            | 106   |   |                          |  | 1     |       |  |  | 107  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|Employer contributions:                                                          |  |                            |       |   |                          |  | 221   |       |  |  | (221 | )
|Benefits Paid                                                                    |  |                            | (33   | ) |                          |  | (33   | )     |  |  |     |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  
|At 31 December 2016                                                              |  |                            | 1,509 |   |                          |  | 1,306 |       |  |  | 203  |  
|                                                                                 |  |                            |       |   |                          |  |       |       |  |  |      |  

The income statement charge included in operating profit for post-employment benefits amount to:



|                                                |  |      |     |   |      |  |     |  
|----------------------------------------------- |  | ---- | --- | - | ---- |  | --- | -
|(000)                                         |  | 2016 |     |   | 2015 | 
|Current service cost                            |  |      | 192 |   |      |  | 159 |  
|Interest expense on DBO                         |  |      | 33  |   |      |  | 24  |  
|Interest (income) on plan assets                |  |      | (28 | ) |      |  | (20 | )
|                                                |  |      |     |   |      |  |     |  
|Total defined benefit costs at 31 December 2016 |  |      | 197 |   |      |  | 163 |  
|                                                |  |      |     |   |      |  |     |  



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##### Table of Contents

The re-measurements included in other comprehensive loss amount to:



|                                           |  |      |     |  |      |  |     |  
|------------------------------------------ |  | ---- | --- |  | ---- |  | --- | -
|(000)                                    |  | 2016 |     |  | 2015 | 
|Effect of changes in financial assumptions |  |      | 77  |  |      |  | (57 | )
|Effect of experience adjustments           |  |      | 28  |  |      |  | 43  |  
|Return on plan assets                      |  |      | 1   |  |      |  | (2  | )
|                                           |  |      |     |  |      |  |     |  
|Balance at 31 December 2016                |  |      | 106 |  |      |  | (16 | )
|                                           |  |      |     |  |      |  |     |  

Plan assets relate all to qualifying insurance policies. The significant actuarial assumptions as per 31 December 2016
were as follows:

Demographic assumptions:



| |  |  | Mortality tables: mortality rates-5 year for the men and 5 year for the women
| | - |  | -----------------------------------------------------------------------------



| |  |  | Withdrawal rate: 5% each year
| | - |  | -----------------------------

Economic assumptions:



| |  |  | Yearly inflation rate: 1,75%
| | - |  | ----------------------------



| |  |  | Yearly salary raise: 1,5% (above inflation)
| | - |  | -------------------------------------------



| |  |  | Yearly discount rate: 1.90%
| | - |  | ---------------------------

If the discount rate would decrease/increase with 0,5%, the defined benefit
obligation would increase resp. decrease with 5% and 6%.

The above sensitivity analysis is based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present
value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognized within the statement of financial position.

Through its defined benefit pension plan, the Group is exposed to a number of risks, the most significant of which are detailed below:



| |  |  | Changes in discount rate: a decrease in discount rate will increase plan liabilities;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Inflation risk: the pension obligations are linked to inflation, and higher inflation will lead to higher liabilities. The majority of the plans assets are either unaffected by or loosely correlated with
inflation, meaning that an increase in inflation will also increase the deficit.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The investment positions are managed by the insurance
company within an asset-liability matching framework that has been developed to achieve long-term investments that are in line with the obligations under the pension schemes.

Expected contributions to pension benefit plans for the year ending 31 December 2016 are k228.

Note 18: Other reserves



|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 
|--------------------------------------------- |  | ------------------------- | ----- |  | --------------- |  | ------ | ----------- |  |  | ----- | - |  |  | ------ | 
|(000 )                                      |  | Share basedpaymentreserve |       |  | Convertibleloan |  |        | Translation |  |  | Total |  
|Balance as of 1st January 2013                |  |                           | 1,006 |  |                 |  |       |             |  |  |      |   |  |  | 1,006  | 
|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 
|Contribution in kind convertible loans        |  |                           |      |  |                 |  | 16,631 |             |  |  |       |   |  |  | 16,631 | 
|Vested share-based payments                   |  |                           | 274   |  |                 |  |        |             |  |  |       |   |  |  | 274    | 
|Restatement share-based payments              |  |                           | 984   |  |                 |  |        |             |  |  |       |   |  |  | 984    | 
|Balance as of 1st January 2014                |  |                           | 2,264 |  |                 |  | 16,631 |             |  |  | 0     |   |  |  | 18,984 | 
|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 
|Vested share-based payments                   |  |                           | 1,098 |  |                 |  |        |             |  |  | (10   | ) |  |  | 1,088  | 
|Balance as of 31 December 2014                |  |                           | 3,362 |  |                 |  | 16,631 |             |  |  | (10   | ) |  |  | 19,983 | 
|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 
|Vested share-based payments                   |  |                           | 736   |  |                 |  |        |             |  |  |       |   |  |  | 736    | 
|Currency Translation differences subsidiaries |  |                           |       |  |                 |  |        |             |  |  | 485   |   |  |  | 485    | 
|Balance as of 31 December 2015                |  |                           | 4,098 |  |                 |  | 16,631 |             |  |  | 475   |   |  |  | 21,205 | 
|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 
|Vested share-based payments                   |  |                           | 2,847 |  |                 |  |        |             |  |  |       |   |  |  | 2,847  | 
|Currency Translation differences subsidiaries |  |                           |       |  |                 |  |        |             |  |  | 277   |   |  |  | 277    | 
|Balance as of 31 December 2016                |  |                           | 6,946 |  |                 |  | 16,631 |             |  |  | 752   |   |  |  | 24,329 | 
|                                              |  |                           |       |  |                 |  |        |             |  |  |       |   |  |  |        | 



F-35



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##### Table of Contents

Note 19: Financial Liabilities



|                                            |  |      |        |  |      |  |        | 
|------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | 
|(000)                                     |  | 2016 |        |  | 2015 | 
|Total Non-Current portion as of 1st January |  |      | 10,484 |  |      |  | 10,778 | 
|Total Non-Current portion at 31 December    |  |      | 7,330  |  |      |  | 10,484 | 
|                                            |  |      |        |  |      |  |        | 
|Total Current portion as of 1st
January     |  |      | 898    |  |      |  | 777    | 
|Total Current potion at 31 December         |  |      | 1,108  |  |      |  | 898    | 
|                                            |  |      |        |  |      |  |        | 

The Group receives government support in the form of recoverable cash advances from the Walloon Region in order to compensate
the research and development costs incurred by the Group. These advances are recognized in the income statement as other operating income over the period in which the Group recognizes the expenses for which the advances are intended to compensate.

In May 2016, the IFRS Interpretation Committee issued clarification on the accounting treatment of the Recoverable Cash Advances (RCAs). As per
this clarification paper, RCAs should be recognized as a financial liability in accordance with IFRS9/IAS 39. The Group is applying this new accounting treatment as from January 1st 2016.
There was no restatement of the 2015 consolidated financial position of the Group as no material difference was observed when applying retrospectively the new recommended accounting treatment to the liability as of December 31 2015.

The total estimated amount to be reimbursed as per 31 December 2016 includes the sales-independent reimbursements as well as the sales-dependent
reimbursements and interests (if applicable) if the reimbursement of these amounts is probable. The contingent liability is discounted using a discount rate made up of two components: a risk free rate reflecting the maturity of the advances
repayable and the spread reflecting the Company credit risk.

The amounts recorded under Current Advances Repayable correspond to the
sales-independent amounts estimated to be repaid to the Region in the next 12 months period. Non-current Advances repayable are the sum of the estimated sales-independent and
sales-dependent reimbursements discounted using a discount rate of respectively 5% and 12.5%.

In 2016, the
Company notified the Region of its decision to exploit the outcome of contract 7027 related to the clinical use of C-Cathez in the USA.

The decrease in the non-current part of the advances repayable is explained by the change in estimates (time to
commercialization) in the fair value of the recoverable cash advances associated to the contracts related to C-Cure and C-Cathez, as a result of the outcome of the CHART-trial. Fair value of these instruments is estimated by using the discounted cash flows method.

As per 31 December 2016, the Company has received a total of 21,239k in recoverable cash advances out of a total contractual amount of
23,200k. The residual amount to receive out of the existing contracts amounts to 1,051k and should be received over 2017 and beyond depending on the progress of the different programs partially funded by the Region.



F-36



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##### Table of Contents

Reference is made to the table below which shows (i) the year for which amounts under those agreements have
been received and initially recognised in the income statement as other operating income and (ii) a description of the specific characteristics of those recoverable cash advances including repayment schedule and information on other outstanding
advances.



|                |  |         |                   |  |                   |  |        |                                                  |  |  |                       |  |  |      |       |  |       |  |       |                |  |  |        |  |  |  |       | 
|--------------- |  | ------- | ----------------- |  | ----------------- |  | ------ | ------------------------------------------------ |  |  | --------------------- |  |  | ---- | ----- |  | ----- |  | ----- | -------------- |  |  | ------ |  |  |  | ----- | 
|(in 000)      |  |         |                   |  |                   |  |        | Amounts received for the years ended 31 December |  |  | Amounts yet toreceive | 
|Contract
number |  | Project |                   |  | Contractualamount |  |        | Previous years                                   |  |  | 2015                  |  |  | 2016 |       |  | Total |  |       | 2017 andbeyond | 
|5160            |  |         | C-Cure            |  |                   |  | 2,920  |                                                  |  |  | 2,920                 |  |  |      |      |  |       |  |       |                |  |  | 2,920  |  |  |  |      | 
|5731            |  |         | C-Cure            |  |                   |  | 3,400  |                                                  |  |  | 3,400                 |  |  |      |      |  |       |  |       |                |  |  | 3,400  |  |  |  |      | 
|5914            |  |         | C-Cure            |  |                   |  | 700    |                                                  |  |  | 687                   |  |  |      |      |  |       |  |       |                |  |  | 687    |  |  |  |      | 
|5915            |  |         | C-Cathez          |  |                   |  | 910    |                                                  |  |  | 910                   |  |  |      |      |  |       |  |       |                |  |  | 910    |  |  |  |      | 
|5951            |  |         | Industrialization |  |                   |  | 1,470  |                                                  |  |  | 866                   |  |  |      |      |  |       |  |       |                |  |  | 866    |  |  |  | 604   | 
|6003            |  |         | C-Cure            |  |                   |  | 1,729  |                                                  |  |  | 1,715                 |  |  |      |      |  |       |  |       |                |  |  | 1,715  |  |  |  |      | 
|6230            |  |         | C-Cure            |  |                   |  | 1,084  |                                                  |  |  | 1,084                 |  |  |      |      |  |       |  |       |                |  |  | 1,084  |  |  |  |      | 
|6363            |  |         | C-Cure            |  |                   |  | 1,140  |                                                  |  |  | 1,126                 |  |  |      |      |  |       |  |       |                |  |  | 1,126  |  |  |  |      | 
|6548            |  |         | Industrialization |  |                   |  | 660    |                                                  |  |  | 541                   |  |  |      |      |  |       |  |       |                |  |  | 541    |  |  |  |      | 
|6633            |  |         | C-Cathez          |  |                   |  | 1,020  |                                                  |  |  | 1,020                 |  |  |      |      |  |       |  |       |                |  |  | 1,020  |  |  |  |      | 
|6646            |  |         | Proteins          |  |                   |  | 1,200  |                                                  |  |  | 450                   |  |  |      |      |  |       |  |       |                |  |  | 450    |  |  |  |      | 
|7027            |  |         | C-Cathez          |  |                   |  | 2,500  |                                                  |  |  | 2,232                 |  |  |      |      |  |       |  | 268   |                |  |  | 2,500  |  |  |  |      | 
|7246            |  |         | PreclinicalC-Cure |  |                   |  | 2,467  |                                                  |  |  |                      |  |  |      | 1,480 |  |       |  | 740   |                |  |  | 2,220  |  |  |  | 247   | 
|7502            |  |         | CAR-T Cell        |  |                   |  | 2,000  |                                                  |  |  |                      |  |  |      |      |  |       |  | 1,800 |                |  |  | 1,800  |  |  |  | 200   | 
|                |  |         |                   |  |                   |  |        |                                                  |  |  |                       |  |  |      |       |  |       |  |       |                |  |  |        |  |  |  |       | 
|Total           |  |         |                   |  |                   |  | 23,200 |                                                  |  |  | 16,951                |  |  |      | 1,480 |  |       |  | 2,808 |                |  |  | 21,239 |  |  |  | 1,051 | 
|                |  |         |                   |  |                   |  |        |                                                  |  |  |                       |  |  |      |       |  |       |  |       |                |  |  |        |  |  |  |       | 



|                |  |                        |        |  |                |  |        |                              |  |  |        |  |  |                              |              |  |  |  |       | 
|--------------- |  | ---------------------- | ------ |  | -------------- |  | ------ | ---------------------------- |  |  | ------ |  |  | ---------------------------- | ------------ |  |  |  | ----- | 
|(in 000)      |  | As of 31 December 2016 |       
|Contract number |  | Contractualamount      |        |  | Total received |  |        | To receive in2017 and beyond |  |  | Status |  |  | Amountreimbursed(cumulative) |             
|5160            |  |                        | 2,920  |  |                |  | 2,920  |                              |  |  |       |  |  |                              | Exploitation |  |  |  |      | 
|5731            |  |                        | 3,400  |  |                |  | 3,400  |                              |  |  |       |  |  |                              | Exploitation |  |  |  |      | 
|5914            |  |                        | 700    |  |                |  | 687    |                              |  |  |       |  |  |                              | Abandoned    |  |  |  | 180   | 
|5915            |  |                        | 910    |  |                |  | 910    |                              |  |  |       |  |  |                              | Exploitation |  |  |  | 320   | 
|5951            |  |                        | 1,470  |  |                |  | 866    |                              |  |  | 604    |  |  |                              | Research     |  |  |  |      | 
|6003            |  |                        | 1,729  |  |                |  | 1,715  |                              |  |  |       |  |  |                              | Exploitation |  |  |  |      | 
|6230            |  |                        | 1,084  |  |                |  | 1,083  |                              |  |  |       |  |  |                              | Exploitation |  |  |  |      | 
|6363            |  |                        | 1,140  |  |                |  | 1,126  |                              |  |  |       |  |  |                              | Exploitation |  |  |  | 1,024 | 
|6548            |  |                        | 660    |  |                |  | 541    |                              |  |  |       |  |  |                              | Abandoned    |  |  |  |      | 
|6633            |  |                        | 1,020  |  |                |  | 1,020  |                              |  |  |       |  |  |                              | Exploitation |  |  |  | 102   | 
|6646            |  |                        | 1,200  |  |                |  | 450    |                              |  |  |       |  |  |                              | Abandoned    |  |  |  |      | 
|7027            |  |                        | 2,500  |  |                |  | 2,500  |                              |  |  |       |  |  |                              | Exploitation |  |  |  |      | 
|7246            |  |                        | 2,467  |  |                |  | 2,220  |                              |  |  | 247    |  |  |                              | Research     |  |  |  |      | 
|7502            |  |                        | 2,000  |  |                |  | 1,800  |                              |  |  | 200    |  |  |                              | Research     |  |  |  |      | 
|                |  |                        |        |  |                |  |        |                              |  |  |        |  |  |                              |              |  |  |  |       | 
|                |  |                        | 23,200 |  |                |  | 21,239 |                              |  |  | 1,051  |  |  |                              |              |  |  |  | 1,626 | 
|                |  |                        |        |  |                |  |        |                              |  |  |        |  |  |                              |              |  |  |  |       | 

The contracts 5160, 5731, 5914, 5915 and 5951 have the following specific characteristics:



| |  |  | funding by the Region covers 70% of the budgeted project costs;
| | - |  | ---------------------------------------------------------------



| |  |  | certain activities have to be performed within the Region;
| | - |  | ----------------------------------------------------------



| |  |  | in case of an outlicensing agreement or a sale to a third party, Celyad will have to pay 10% of the price received (excl. of VAT) to the Region;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | sales-independent reimbursements, sales-dependent reimbursements, and amounts due in case of an outlicensing agreement or a sale to a third party, are, in the aggregate, capped at 100% of the principal amount paid out
by the Region;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | sales-dependent reimbursements payable in any given year can be set-off against sales-independent reimbursements already paid out during that year;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount of sales-independent reimbursement and sales-dependant reimbursement may possibly be adapted in case of an outlicensing agreement, a sale to a third party or industrial use of a prototype or pilot
installation, when obtaining the consent of the Walloon Region to proceed thereto.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The other contracts have the following specific
characteristics:



| |  |  | funding by the Region covers 60% of the budgeted project costs;
| | - |  | ---------------------------------------------------------------



| |  |  | certain activities have to be performed within the European Union;
| | - |  | ------------------------------------------------------------------



| |  |  | sales-independent reimbursements represent in the aggregate 30% of the principal amount;
| | - |  | ----------------------------------------------------------------------------------------



F-37



---

##### Table of Contents

| |  |  | sales-dependent reimbursements range between 50% and 200% (including accrued interest) of the principal amount of the RCA depending on the actual outcome of the project compared to the outcome projected at the time of
grant of the RCA (below or above projections);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | interests (at Euribor 1 year (as applicable on the first day of the month in which the decision to grant the relevant RCA was made + 100 basis points) accrue as of the 1st day of the exploitation phase;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount of sales-independent reimbursement and sales-dependant reimbursement may possibly be adapted in case of an outlicensing agreement, a sale to a third party or industrial use of a prototype or pilot
installation, when obtaining the consent of the Region to proceed thereto.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | sales-independent reimbursements and sales-dependent reimbursements are, in the aggregate (including the accrued interests), capped at 200% of the principal amount paid out by the Region;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in case of bankruptcy, the research results obtained by the Company under those contracts are expressed to be assumed by the Region by operation of law.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

The table below summarizes, in addition to the specific characteristics described above, certain terms and conditions for the recoverable cash advances:



|                |  |                |                   |  |                                |  |    |                                 |  |  |                                    |   |                     |                                                                     |                                                      |                    |  |                           
|--------------- |  | -------------- | ----------------- |  | ------------------------------ |  | -- | ------------------------------- |  |  | ---------------------------------- | - | ------------------- | ------------------------------------------------------------------- | ---------------------------------------------------- | ------------------ |  | --------------------------
|Contract
number |  | Research phase |                   |  | Percentageof totalprojectcosts |  |    | Turnover-dependentreimbursement |  |  | Turnover-independent
reimbursement |   | Interestrateaccrual |                                                                     | Amounts due in caseof licensing (peryear) resp. Sale
|(000)        
|5160            |  |                | 01/05/05-30/04/08 |  |                                |  | 70 | %                               |  |  | 0.18                               | % |                     | Consolidated with 6363                                              |                                                      | N/A                |  | N/A                       
|5731            |  |                | 01/05/08-31/10/09 |  |                                |  | 70 | %                               |  |  | 0.18                               | % |                     | Consolidated with 6363                                              |                                                      | N/A                |  | N/A                       
|5914            |  |                | 01/09/08-30/06/11 |  |                                |  | 70 | %                               |  |  | 5.00                               | % |                     | 30 in 2012 and 70 each year after                                   |                                                      | N/A                |  | 10% with a minimumof 100/Y
|5915            |  |                | 01/08/08-30/04/11 |  |                                |  | 70 | %                               |  |  | 5.00                               | % |                     | 40 in 2012 and 70 each year after                                   |                                                      | N/A                |  | 10% with a minimumof 100/Y
|5951            |  |                | 01/09/08-31/12/14 |  |                                |  | 70 | %                               |  |  | 5.00                               | % |                     | 100 in 2014 and 150 each year after                                 |                                                      | N/A                |  | 10% with a minimumof 200/Y
|6003            |  |                | 01/01/09-30/09/11 |  |                                |  | 60 | %                               |  |  | 0.18                               | % |                     | Consolidated with 6363                                              |                                                      | N/A                |  | N/A                       
|6230            |  |                | 01/01/10-31/03/12 |  |                                |  | 60 | %                               |  |  | 0.18                               | % |                     | Consolidated with 6363                                              |                                                      | N/A                |  | N/A                       
|6363            |  |                | 01/03/10-30/06/12 |  |                                |  | 60 | %                               |  |  | 0.18                               | % |                     | From 103 to 514 starting in 2013 until 30% of advance is reached    |                                                      | Startingon01/01/13 |  | N/A                       
|6548            |  |                | 01/01/11-31/03/13 |  |                                |  | 60 | %                               |  |  | 0.01                               | % |                     | From 15 to 29 starting in 2014 until 30% of advance is reached      |                                                      | Startingon01/10/13 |  | N/A                       
|6633            |  |                | 01/05/11-30/11/12 |  |                                |  | 60 | %                               |  |  | 0.27                               | % |                     | From 10 to 51 starting in 2013 until 30% of advance is reached      |                                                      | Startingon01/06/13 |  | N/A                       
|6646            |  |                | 01/05/11-30/06/15 |  |                                |  | 60 | %                               |  |  | 0.01                               | % |                     | From 12 to 60 starting in 2015 until 30% of advance is reached      |                                                      | Startingon01/01/16 |  | N/A                       
|7027            |  |                | 01/11/12-31/10/14 |  |                                |  | 50 | %                               |  |  | 0.33                               | % |                     | From 25 to 125 starting in 2015 until 30% of advance is reached     |                                                      | Startingon01/01/15 |  | N/A                       
|7246            |  |                | 01/01/14-31/12/16 |  |                                |  | 50 | %                               |  |  | 0,05                               | % |                     | From 30 to 148 K starting in 2017 until 30% of advance is reached. |                                                      | Startingin 2017    |  | N/A                       
|7502            |  |                | 01/12/15-30/11/18 |  |                                |  | 45 | %                               |  |  | 0.19                               | % |                     | From 20 to 50K starting in 2019 until 30% is reached.              |                                                      | Starting2019       |  | N/A                       



F-38



---

##### Table of Contents

Note 20: Due dates of the Financial Liabilities

Non-current liabilities



|                                             |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 
|-------------------------------------------- |  | ----- | ------ |  | ----------------- |  | ----- | ----------------- |  |  | ------------------ |  |  | ------------------- | ----- |  |  |  | ----- | 
|(000)                                      |  | Total |        |  | Less thanone year |  |       | One to threeyears |  |  | Three tofive years |  |  | More thanfive years |      
|As of December 31, 2014                      |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 
|Finance leases                               |  |       | 413    |  |                   |  | 134   |                   |  |  | 245                |  |  |                     | 34    |  |  |  |      | 
|Operating leases                             |  |       | 1,683  |  |                   |  | 751   |                   |  |  | 679                |  |  |                     | 88    |  |  |  | 165   | 
|Pension obligations                          |  |       | 182    |  |                   |  |      |                   |  |  |                   |  |  |                     |      |  |  |  | 182   | 
|Advances repayable (current and non-current) |  |       | 11,555 |  |                   |  | 777   |                   |  |  | 1,570              |  |  |                     | 1,846 |  |  |  | 7,362 | 
|                                             |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 
|Total                                        |  |       | 13,833 |  |                   |  | 1,662 |                   |  |  | 2,494              |  |  |                     | 1,968 |  |  |  | 7,709 | 
|                                             |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 



|                                             |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 
|-------------------------------------------- |  | ----- | ------ |  | ----------------- |  | ----- | ----------------- |  |  | ------------------ |  |  | ------------------- | ----- |  |  |  | ----- | 
|(000)                                      |  | Total |        |  | Less thanone year |  |       | One to threeyears |  |  | Three tofive years |  |  | More thanfive years |      
|As of December 31, 2015                      |  |       |        |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  |       | 
|Finance leases                               |  |       | 675    |  |                   |  | 248   |                   |  |  | 427                |  |  |                     |       |  |  |  |       | 
|Operating leases                             |  |       | 1.759  |  |                   |  | 817   |                   |  |  | 692                |  |  |                     | 126   |  |  |  | 124   | 
|Pension obligations                          |  |       | 121    |  |                   |  |       |                   |  |  |                    |  |  |                     |       |  |  |  | 121   | 
|Advances repayable (current and non-current) |  |       | 11.382 |  |                   |  | 898   |                   |  |  | 3.043              |  |  |                     | 1.814 |  |  |  | 5.627 | 
|                                             |  |       |        |  |                  
|Total                                        |  |       | 13.937 |  |                   |  | 1.962 |                   |  |  | 4.163              |  |  |                     | 1.940 |  |  |  | 5.872 | 

The following table discloses aggregate information about material contractual obligations and periods in which payments were
due as of December 31, 2016. Future events could cause actual payments to differ from these estimates.



|                                             |  |       |        |  |                   |  |       |                   |  |  |                   |  |  |                     |       |  |  |  |       | 
|-------------------------------------------- |  | ----- | ------ |  | ----------------- |  | ----- | ----------------- |  |  | ----------------- |  |  | ------------------- | ----- |  |  |  | ----- | 
|(000)                                      |  | Total |        |  | Less thanone year |  |       | One to threeyears |  |  | Tree tofive years |  |  | More thanfive years |      
|As of December 31, 2016                      |  |       |        |  |                   |  |       |                   |  |  |                   |  |  |                     |       |  |  |  |       | 
|Finance leases                               |  |       | 735    |  |                   |  | 354   |                   |  |  | 315               |  |  |                     | 66    |  |  |  |       | 
|Bank loan                                    |  |       | 743    |  |                   |  | 207   |                   |  |  | 417               |  |  |                     | 118   |  |  |  |      | 
|Operating leases                             |  |       | 3,377  |  |                   |  | 456   |                   |  |  | 945               |  |  |                     | 733   |  |  |  | 1,244 | 
|Pension obligations                          |  |       | 204    |  |                   |  |       |                   |  |  |                   |  |  |                     |       |  |  |  | 204   | 
|Advances repayable (current and non-current) |  |       | 8,438  |  |                   |  | 1,108 |                   |  |  | 1,812             |  |  |                     | 1,598 |  |  |  | 3,920 | 
|                                             |  |       |        |  |                  
|Total                                        |  |       | 13,497 |  |                   |  | 2,125 |                   |  |  | 3,489             |  |  |                     | 2,494 |  |  |  | 5,389 | 

Current liabilities

Financial liabilities as of 31 December 2015:



|                                             |  |       |        |  |                    |  |        |                   |  |  |                      |  |  |  |   | 
|-------------------------------------------- |  | ----- | ------ |  | ------------------ |  | ------ | ----------------- |  |  | -------------------- |  |  |  | - | 
|(000)                                      |  | Total |        |  | Less than one year |  |        | One to five years |  |  | More than five years | 
|As of 31 December, 2015                      |  |       |        |  |                    |  |        |                   |  |  |                      |  |  |  |   | 
|Financial leases                             |  |       | 675    |  |                    |  | 248    |                   |  |  | 427                  |  |  |  |  | 
|Trade payables and other current liabilities |  |       | 10,344 |  |                    |  | 10,344 |                   |  |  |                     |  |  |  |  | 
|                                             |  |       |        |  |                    |  |        |                   |  |  |                      |  |  |  |   | 
|Total financial liabilities                  |  |       | 11,019 |  |                    |  | 10,592 |                   |  |  | 427                  |  |  |  |  | 
|                                             |  |       |        |  |                    |  |        |                   |  |  |                      |  |  |  |   | 



F-39



---

##### Table of Contents

Financial liabilities posted as of 31 December 2016:



|                                             |  |       |        |  |                    |  |        |                   |  |  |                     |  |  |  |    | 
|-------------------------------------------- |  | ----- | ------ |  | ------------------ |  | ------ | ----------------- |  |  | ------------------- |  |  |  | -- | 
|(000)                                      |  | Total |        |  | Less than one year |  |        | One to five years |  |  | More than fiveyears | 
|As of 31 December, 2016                      |  |       |        |  |                    |  |        |                   |  |  |                     |  |  |  |    | 
|Bank loan                                    |  |       | 743    |  |                    |  | 207    |                   |  |  | 536                 |  |  |  |   | 
|Financial leases                             |  |       | 735    |  |                    |  | 354    |                   |  |  | 360                 |  |  |  | 21 | 
|Trade payables and other current liabilities |  |       | 9,606  |  |                    |  | 9,606  |                   |  |  |                    |  |  |  |   | 
|                                             |  |       |        |  |                    |  |        |                   |  |  |                     |  |  |  |    | 
|Total financial liabilities                  |  |       | 11,084 |  |                    |  | 10,167 |                   |  |  | 917                 |  |  |  |   | 
|                                             |  |       |        |  |                    |  |        |                   |  |  |                     |  |  |  |    | 

Details of current liabilities

Trade payables and other current liabilities



|                                |  |      |       |  |                   |  |       | 
|------------------------------- |  | ---- | ----- |  | ----------------- |  | ----- | 
|(000)                         |  |      |       |  | As of 31 December | 
|                                |  | 2016 |       |  | 2015              | 
|Total trade payables            |  |      | 8,098 |  |                   |  | 8,576 | 
|Other current liabilities       |  |      |       |  |                   |  |       | 
|Social security                 |  |      | 294   |  |                   |  | 301   | 
|Payroll accruals and taxes      |  |      | 1,206 |  |                   |  | 1,300 | 
|Other current liabilities       |  |      | 8     |  |                   |  | 167   | 
|                                |  |      |       |  |                   |  |       | 
|Total other current liabilities |  |      | 1,508 |  |                   |  | 1,768 | 
|                                |  |      |       |  |                   |  |       | 

Trade payables (composed of suppliers invoices and accruals for suppliers invoices not yet received at closing)
are non-interest bearing and are normally settled on a 45-day terms.

Other current liabilities are non-interest bearing and have an average term of six months. Fair value equals
approximately the carrying amount of the trade payables and other current liabilities.

The Other current liabilities include the short term debts to
employees and social welfare and tax agencies.

No discounting was performed to the extent that the amounts do not present payments terms longer than one
year at the end of each fiscal year presented.

Note 21: Financial instruments on balance sheet



|                            |  |                        |         |  |       |  |         | 
|--------------------------- |  | ---------------------- | ------- |  | ----- |  | ------- | 
|                            |  | As of 31 December 2015 |        
|(000)                     |  | Loans and receivables  |         |  | Total | 
|Assets as per balance sheet |  |                        |         |  |       |  |         | 
|Deposits                    |  |                        | 180     |  |       |  | 180     | 
|Trade and other receivables |  |                        | 549     |  |       |  | 549     | 
|Other current assets        |  |                        | 1,358   |  |       |  | 1,358   | 
|Short term investment       |  |                        | 7,338   |  |       |  | 7,338   | 
|Cash and cash equivalents   |  |                        | 100,175 |  |       |  | 100,175 | 
|                            |  |                        |         |  |       |  |         | 
|Total                       |  |                        | 109,600 |  |       |  | 109,600 | 
|                            |  |                        |         |  |       |  |         | 

For the financial assets as mentioned above, the carrying amount as per 31 December 2015 is a reasonable approximation of
their fair value.



|                                             |  |                                        |        |  |       |  |        | 
|-------------------------------------------- |  | -------------------------------------- | ------ |  | ----- |  | ------ | 
|                                             |  | As of 31 December 2015                 |       
|(000)                                      |  | Financial liabilities atamortised cost |        |  | Total | 
|Liabilities as per balance sheet             |  |                                        |        |  |       |  |        | 
|Finance leases                               |  |                                        | 675    |  |       |  | 675    | 
|Trade payables and other current liabilities |  |                                        | 10,344 |  |       |  | 10,344 | 
|                                             |  |                                        |        |  |       |  |        | 
|Total                                        |  |                                        | 11,019 |  |       |  | 11,019 | 
|                                             |  |                                        |        |  |       |  |        | 



F-40



---

##### Table of Contents

For the financial liabilities as mentioned above the carrying amount as per 31 December 2015 is a reasonable
approximation of their fair value.



|                            |  |                        |        |  |       |  |        | 
|--------------------------- |  | ---------------------- | ------ |  | ----- |  | ------ | 
|                            |  | As of 31 December 2016 |       
|(000)                     |  | Loans and receivables  |        |  | Total | 
|Assets as per balance sheet |  |                        |        |  |       |  |        | 
|Deposits                    |  |                        | 311    |  |       |  | 311    | 
|Trade and other receivables |  |                        | 1,359  |  |       |  | 1,359  | 
|Other current assets        |  |                        | 1,420  |  |       |  | 1,420  | 
|Short term investment       |  |                        | 34,230 |  |       |  | 34,230 | 
|Cash and cash equivalents   |  |                        | 48,357 |  |       |  | 48,357 | 
|                            |  |                        |        |  |       |  |        | 
|Total                       |  |                        | 85,677 |  |       |  | 85,677 | 
|                            |  |                        |        |  |       |  |        | 

For the financial assets as mentioned above, the carrying amount as per 31 December 2016 is a reasonable approximation of
their fair value.



|                                             |  |                                        |        |  |       |  |        | 
|-------------------------------------------- |  | -------------------------------------- | ------ |  | ----- |  | ------ | 
|                                             |  | As of 31 December 2016                 |       
|(000)                                      |  | Financial liabilities atamortized cost |        |  | Total | 
|Liabilities as per balance sheet             |  |                                        |        |  |       |  |        | 
|Bank loans                                   |  |                                        | 742    |  |       |  | 742    | 
|Finance leases                               |  |                                        | 735    |  |       |  | 735    | 
|Trade payables and other current liabilities |  |                                        | 9,606  |  |       |  | 9,606  | 
|                                             |  |                                        |        |  |       |  |        | 
|Total                                        |  |                                        | 11,083 |  |       |  | 11,083 | 
|                                             |  |                                        |        |  |       |  |        | 

For the financial liabilities as mentioned above the carrying amount as per 31 December 2016 is a reasonable
approximation of their fair value.

The following table presents the groups financial assets and liabilities that are measured at fair value at
31 December 2016:



|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|------------------------ |  | ------- | - |  | -------- |  | - | --------- |  |  | ------ |  |  |  | ------ | 
|(000)                  |  | Level I |   |  | Level II |  |   | Level III |  |  | Total  | 
|Assets                   |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|                         |  |         |  |  |          |  |  |           |  |  |       |  |  |  |       | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Total Assets             |  |         |  |  |          |  |  |           |  |  |       |  |  |  |       | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Liabilities              |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Contingent consideration |  |         |  |  |          |  |  |           |  |  | 28,179 |  |  |  | 28,179 | 
|RCAs                    |  |         |   |  |          |  |   |           |  |  | 8,438  |  |  |  | 8,438  | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 
|Total Liabilities        |  |         |  |  |          |  |  |           |  |  | 36,617 |  |  |  | 36,617 | 
|                         |  |         |   |  |          |  |   |           |  |  |        |  |  |  |        | 

Fair value measurements using significant unobservable inputs (Level 3):



|                                     |  |                         |        | 
|------------------------------------ |  | ----------------------- | ------ | 
|(000)                              |  | Contingentconsideration |       
|Opening balanace at 1st January 2015 |  |                         |       | 
|Acquisition of OnCyte LLC            |  |                         | 25,529 | 
|                                     |  |                         |        | 
|Closing balance at 31 December 2015  |  |                         | 25,529 | 
|                                     |  |                         |        | 
|Year end 2016 Fair value adjustment  |  |                         | 1,633  | 
|                                     |  |                         |        | 
|CTA                                  |  |                         | 1,017  | 
|                                     |  |                         |        | 
|Closing balance at 31 December 2016  |  |                         | 28,179 | 
|                                     |  |                         |        | 



F-41



---

##### Table of Contents

Fair value measurements using significant unobservable inputs (Level 3):



|                                    |  |                         |        |  
|----------------------------------- |  | ----------------------- | ------ | -
|(000)                             |  | Contingentconsideration |       
|Opening balance at 1st January 2015 |  |                         | 11,555 |  
|                                    |  |                         |        |  
|Liability recognition               |  |                         | 1,392  |  
|Repayments                          |  |                         | (529   | )
|RCA fair value adjustment           |  |                         | (1,036 | )
|                                    |  |                         |        |  
|Closing balance at 31 December 2015 |  |                         | 11,382 |  
|                                    |  |                         |        |  
|Repayments                          |  |                         | (842   | )
|RCA fair value adjustment           |  |                         | (2,102 | )
|                                    |  |                         |        |  
|Closing balance at 31 December 2016 |  |                         | 8,438  |  
|                                    |  |                         |        |  

A sensitivity analysis was performed on the main assumptions driving the fair value of the contingent consideration. The
principal elements driving the fair value of the contingent liability are the discount rate, the net sales and the probabilities of success.



|                           |  |               |       |   |       |  |       |       |  |  |       |  |  |       |       |   |  |  |       |  
|-------------------------- |  | ------------- | ----- | - | ----- |  | ----- | ----- |  |  | ----- |  |  | ----- | ----- | - |  |  | ----- | -
|                           |  | Discount rate |      
|                           |  | 15,.5%        |       |   | 16.5% |  |       | 17.5% |  |  | 18.5% |  |  | 19.5% |      
|Cont. consideration (MUSD) |  |               | 32.69 |   |       |  | 31.14 |       |  |  | 29.70 |  |  |       | 28.36 |   |  |  | 27.11 |  
|Impact (%)                 |  |               | 5     | % |       |  | 5     | %     |  |  |      |  |  |       | -5    | % |  |  | -4    | %
|                           | 
|                           |  | Sales         |      
|                           |  | 80%           |       |   | 90%   |  |       | 100%  |  |  | 110%  |  |  | 120%  |      
|Cont. consideration (MUSD) |  |               | 26.86 |   |       |  | 28.21 |       |  |  | 29.70 |  |  |       | 31.47 |   |  |  | 33.32 |  
|Impact (%)                 |  |               | -5    | % |       |  | -5    | %     |  |  |      |  |  |       | 8     | % |  |  | 7     | %
|                           | 
|                           |  | Probabilities |      
|                           |  | 98%           |       |   | 99%   |  |       | 100%  |  |  | 101%  |  |  | 102%  |      
|Cont. consideration (MUSD) |  |               | 29.11 |   |       |  | 29.41 |       |  |  | 29.70 |  |  |       | 30.00 |   |  |  | 30.30 |  
|Impact (%)                 |  |               | -3    | % |       |  | -3    | %     |  |  |      |  |  |       | 3     | % |  |  | 3     | %

A sensitivity analysis was performed on the main assumption driving the fair value of the RCAs is presented below. The
principal element driving the fair value of the RCAs is the discount rate.



|           |  |               |      |  |     |  |      |            |  |  |      |  |  |     |      |  |  |  |      | 
|---------- |  | ------------- | ---- |  | --- |  | ---- | ---------- |  |  | ---- |  |  | --- | ---- |  |  |  | ---- | 
|           |  | Discount rate |     
|           |  | -2%           |      |  | -1% |  |      | 5% - 12.5% |  |  | +1%  |  |  | +2% |     
|RCA (MEUR) |  |               | 9.20 |  |     |  | 8.83 |            |  |  | 8.44 |  |  |     | 8.17 |  |  |  | 7.87 | 

Note 22: Revenues and Other operating income and expenses



|                                              |  |                                |       |  |      |  |   |      |  |  |     | 
|--------------------------------------------- |  | ------------------------------ | ----- |  | ---- |  | - | ---- |  |  | --- | 
|(000)                                       |  | For the year ended 31 December |       |  |      | 
|                                              |  | 2016                           |       |  | 2015 |  |   | 2014 | 
|Recognition of non-refundable upfront payment |  |                                | 8,440 |  |      |  |  |      |  |  |    | 
|C-Cathez
sales                                |  |                                | 83    |  |      |  | 3 |      |  |  | 146 | 
|Other                                         |  |                                |      |  |      |  |  |      |  |  |    | 
|                                              |  |                                |       |  |      |  |   |      |  |  |     | 
|Total Revenues                                |  |                                | 8,523 |  |      |  | 3 |      |  |  | 146 | 
|                                              |  |                                |       |  |      |  |   |      |  |  |     | 

Total revenues increased by 8.5 million over 2016. In August 2016, the Group has received a non-refundable upfront payment as a result of the ONO agreement. This upfront payment has been fully recognized upon receipt as there are no performance obligations nor subsequent deliverables associated to the
payment. The non-refundable upfront payment was rather received as a consideration for the sale of license to ONO.



|                                                    |  |                                |        |   |      |  |        |      |  |  |        |  
|--------------------------------------------------- |  | ------------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|(000)                                             |  | For the year ended 31 December |        |   |      | 
|                                                    |  | 2016                           |        |   | 2015 |  |        | 2014 | 
|Recoverable cash advances (RCAs)                    |  |                                | 2,704  |   |      |  | 578    |      |  |  | 3,031  |  
|Subsidies                                           |  |                                | 124    |   |      |  | 412    |      |  |  | 636    |  
|Reversal accrual RCA                                |  |                                |        |   |      |  |       |      |  |  | 299    |  
|Change of fair value RCA                            |  |                                | 2,154  |   |      |  | 1,036  |      |  |  | 2,502  |  
|Realized gain on contribution IP into joint venture |  |                                |       |   |      |  | (312   | )    |  |  | 312    |  
|Other                                               |  |                                |       |   |      |  |       |      |  |  | 167    |  
|                                                    |  |                                |        |   |      |  |        |      |  |  |        |  
|Total Other Operating Income                        |  |                                | 4,982  |   |      |  | 1,714  |      |  |  | 6,947  |  
|                                                    |  |                                |        |   |      |  |        |      |  |  |        |  
|New accrual RCA                                     |  |                                |       |   |      |  | (1,392 | )    |  |  | (2,534 | )
|Change of fair value Contingent Liabilities         |  |                                | (1,634 | ) |      |  |       |      |  |  |       |  
|Other                                               |  |                                | (8     | ) |      |  |       |      |  |  |       |  
|Total Other operating expenses                      |  |                                | (1,642 | ) |      |  | (1,392 | )    |  |  | (2,534 | )
|                                                    |  |                                |        |   |      |  |        |      |  |  |        |  
|Total Other Operating Income and Expenses           |  |                                | 3,340  |   |      |  | 322    |      |  |  | 4,413  |  
|                                                    |  |                                |        |   |      |  |        |      |  |  |        |  



F-42



---

##### Table of Contents

Note 23: Operating Expenses

The operating expenses are made of the next two components:



| |  |  | Research& development expenses
| | - |  | ------------------------------



| |  |  | General and administrative expenses
| | - |  | -----------------------------------

Research and development expenses



|                                        |  |                                |        |  |      |  |        |      |  |  |        | 
|--------------------------------------- |  | ------------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|(000)                                 |  | For the year ended 31 December |        |  |      | 
|                                        |  | 2016                           |        |  | 2015 |  |        | 2014 | 
|Salaries                                |  |                                | 8,160  |  |      |  | 5,785  |      |  |  | 4,235  | 
|Travel and living                       |  |                                | 577    |  |      |  | 168    |      |  |  | 249    | 
|Mayo research project                   |  |                                |       |  |      |  |       |      |  |  | 751    | 
|Preclinical studies                     |  |                                | 4,650  |  |      |  | 2,398  |      |  |  | 274    | 
|Clinical studies                        |  |                                | 4,468  |  |      |  | 6,723  |      |  |  | 4,924  | 
|Delivery systems                        |  |                                | 964    |  |      |  | 173    |      |  |  | 1      | 
|Consulting fees                         |  |                                | 791    |  |      |  | 1,842  |      |  |  | 781    | 
|IP filing and maintenance fees          |  |                                | 799    |  |      |  | 763    |      |  |  | 351    | 
|Scale-up and automation                 |  |                                | 4,164  |  |      |  | 642    |      |  |  | 70     | 
|Rent and utilities                      |  |                                | 939    |  |      |  | 1,045  |      |  |  | 582    | 
|Depreciation and amortization           |  |                                | 1,345  |  |      |  | 1,033  |      |  |  | 864    | 
|Other costs                             |  |                                | 817    |  |      |  | 2,196  |      |  |  | 2,783  | 
|                                        |  |                                |        |  |      |  |        |      |  |  |        | 
|Total Research and development expenses |  |                                | 27,675 |  |      |  | 22,767 |      |  |  | 15,865 | 
|                                        |  |                                |        |  |      |  |        |      |  |  |        | 

General and administrative expenses



|                                 |  |                                |       |   |      |  |       |      |  |  |       | 
|-------------------------------- |  | ------------------------------ | ----- | - | ---- |  | ----- | ---- |  |  | ----- | 
|(000)                          |  | For the year ended 31 December |       |   |      | 
|                                 |  | 2016                           |       |   | 2015 |  |       | 2014 | 
|Employee expenses                |  |                                | 2,486 |   |      |  | 2,761 |      |  |  | 1,408 | 
|Share-based payment              |  |                                | 2,847 |   |      |  | 796   |      |  |  | 1,528 | 
|Rent                             |  |                                | 791   |   |      |  | 617   |      |  |  | 315   | 
|Communication & Marketing        |  |                                | 728   |   |      |  | 891   |      |  |  | 394   | 
|Consulting fees                  |  |                                | 2,029 |   |      |  | 1,511 |      |  |  | 741   | 
|Travel & Living                  |  |                                | 450   |   |      |  | 509   |      |  |  | 399   | 
|Post employment benefits         |  |                                | (24   | ) |      |  | (45   | )    |  |  | 28    | 
|Depreciation                     |  |                                | 173   |   |      |  |      |      |  |  |      | 
|Other                            |  |                                | 265   |   |      |  | 190   |      |  |  | 203   | 
|                                 |  |                                |       |   |      |  |       |      |  |  |       | 
|Total General and administration |  |                                | 9,744 |   |      |  | 7,230 |      |  |  | 5,016 | 
|                                 |  |                                |       |   |      |  |       |      |  |  |       | 



F-43



---

##### Table of Contents

Note 24: Employee Benefit Expenses



|                                       |  |                                |        |  |      |  |       |      |  |  |       | 
|-------------------------------------- |  | ------------------------------ | ------ |  | ---- |  | ----- | ---- |  |  | ----- | 
|(000)                                |  | For the year ended 31 December |        |  |      | 
|                                       |  | 2016                           |        |  | 2015 |  |       | 2014 | 
|Salaries, wages and bonuses            |  |                                | 5,994  |  |      |  | 5,181 |      |  |  | 3,113 | 
|Executive Management team compensation |  |                                | 2,900  |  |      |  | 1,843 |      |  |  | 1,448 | 
|Share based payments                   |  |                                | 2,847  |  |      |  | 796   |      |  |  | 1,527 | 
|Social security                        |  |                                | 1,362  |  |      |  | 1,280 |      |  |  | 889   | 
|Post employment benefits               |  |                                | 215    |  |      |  | 202   |      |  |  | 188   | 
|Hospitalisation insurance              |  |                                | 151    |  |      |  | 40    |      |  |  | 30    | 
|Other benefit expenses                 |  |                                |       |  |      |  | 0     |      |  |  | 3     | 
|                                       |  |                                |        |  |      |  |       |      |  |  |       | 
|Total Employee expenses                |  |                                | 13,469 |  |      |  | 9,342 |      |  |  | 7,198 | 
|                                       |  |                                |        |  |      |  |       |      |  |  |       | 

Note 25: Financial Revenues and Expenses



|                                               |  |                                |       |  |      |  |     |      |  |  |     | 
|---------------------------------------------- |  | ------------------------------ | ----- |  | ---- |  | --- | ---- |  |  | --- | 
|(000)                                        |  | For the year ended 31 December |       |  |      | 
|                                               |  | 2016                           |       |  | 2015 |  |     | 2014 | 
|Interest on RCAs                              |  |                                | 53    |  |      |  |    |      |  |  |    | 
|Interest finance leases                        |  |                                | 19    |  |      |  | 10  |      |  |  | 6   | 
|Interest on overdrafts and other finance costs |  |                                | 37    |  |      |  | 90  |      |  |  | 16  | 
|Exchange Differences                           |  |                                | 98    |  |      |  | 135 |      |  |  | 19  | 
|                                               |  |                                |       |  |      |  |     |      |  |  |     | 
|Finance expenses                               |  |                                | 207   |  |      |  | 236 |      |  |  | 41  | 
|                                               |  |                                |       |  |      |  |     |      |  |  |     | 
|Interest income bank account                   |  |                                | 1,413 |  |      |  | 352 |      |  |  | 277 | 
|Exchange Differences                           |  |                                | 791   |  |      |  | 190 |      |  |  |    | 
|Finance income                                 |  |                                | 2,204 |  |      |  | 542 |      |  |  | 277 | 
|                                               |  |                                |       |  |      |  |     |      |  |  |     | 

Note 26: Income Tax expense

Not applicable

Note 27: Deferred taxes

The following table shows the reconciliation between the effective and theoretical tax expense at the theoretical standard Belgian tax rate of 33.99%
(excluding additional contributions):



|                                                                       |  |                                |         |   |      |  |         |  
|---------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- |  | ------- | -
|(000)                                                                |  | For the year ended 31 December |        
|                                                                       |  | 2016                           |         |   | 2015 | 
|Loss before taxes                                                      |  |                                | (23,606 | ) |      |  | (29,114 | )
|Theoretical group tax rate                                             |  |                                | 33.99   | % |      |  | 33.99   | %
|Theoretical tax gain                                                   |  |                                | 8,024   |   |      |  | 9,896   |  
|Increase/decrease in tax expense arising from:                         |  |                                |         |   |      |  |         |  
|Permanent differences(1)                                               |  |                                |        |   |      |  | 3,663   |  
|Share-based compensation                                               |  |                                | (968    | ) |      |  | (498    | )
|CELYAD Asia                                                            |  |                                |        |   |      |  | (21     | )
|Capitalization of R&D costs                                            |  |                                | 83      |   |      |  | (6,112  | )
|Amortization of Mayo license                                           |  |                                | (201    | ) |      |  | (75     | )
|Amortization of patent                                                 |  |                                | (28     | ) |      |  |        |  
|Recoverable cash advances                                              |  |                                | 1,323   |   |      |  | (371    | )
|Depreciation of tangibles                                              |  |                                | (58     | ) |      |  |        |  
|Revaluation of contingent liability                                    |  |                                | (555    | ) |      |  |         |  
|Amortization of IPRD & goodwill                                        |  |                                | (5,179  | ) |      |  |         |  
|Other temporary differences                                            |  |                                | 11      |   |      |  | 15      |  
|Non recognition of deferred tax assets related to statutory
tax losses |  |                                | (2,526  | ) |      |  | (6,576  | )
|Non taxable statutory losses                                           |  |                                | 75      |   |      |  | 79      |  
|Effective tax gain / (expense)                                         |  |                                |        |   |      |  |        |  
|Effective tax rate                                                     |  |                                |        | % |      |  |        | %



|(1) | The significant balance of permanent differences is mainly affected by transaction costs on capital increases occurred in 2015 and 2014. These transaction costs are booked in equity and are subject to a tax deduction
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-44



---

##### Table of Contents

Unrecognized deferred tax assets:



|                                          |  |                                |          |   |      |  |          |  
|----------------------------------------- |  | ------------------------------ | -------- | - | ---- |  | -------- | -
|(000)                                   |  | For the year ended 31 December |         
|                                          |  | 2016                           |          |   | 2015 | 
|Net loss carried forward                  |  |                                | (83,794  | ) |      |  | (63,863  | )
|Opening temporary differences             |  |                                | (51,717  | ) |      |  | (32,485  | )
|Amortization of intangibles               |  |                                | 14,806   |   |      |  | 19       |  
|Depreciation of tangibles                 |  |                                | (171     | ) |      |  |         |  
|Recoverable cash advances                 |  |                                | 3,891    |   |      |  | (1,093   | )
|Revaluation of contingent liability       |  |                                | 1,633    |   |      |  |         |  
|Capitalization of development costs       |  |                                |         |   |      |  | (18,220  | )
|Post employment benefits                  |  |                                | (24      | ) |      |  | 62       |  
|Total temporary differences of the period |  |                                | 20,135   |   |      |  | (19,232  | )
|Accumulated temporary differences         |  |                                | (31,582  | ) |      |  | (51,717  | )
|Total IFRS tax losses carried forward and |  |                                |          |   |      |  |          |  
|Deductible temporary difference (net)     |  |                                | (115,376 | ) |      |  | (115,580 | )
|Unrecognized deferred tax assets          |  |                                | 39,370   |   |      |  | 39,286   |  

The Group has unused tax losses carried forward that are available indefinitely for offset against future taxable profits of
the Group. In addition to the net loss carried forward, the Group can benefit from additional tax benefits (notional interest deduction) which can be carry-forward until the fiscal year 2019.



|                  |  |                   |        |   |      |  |        |      |  |  |        |  
|----------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|(000)           |  | As of 31 December |        |   |      | 
|                  |  | 2016              |        |   | 2015 |  |        | 2014 | 
|Notional interest |  |                   | (1,861 | ) |      |  | (1,861 | )    |  |  | (1,861 | )

The Group has a history of losses and significant uncertainty exists surrounding the Groups ability to realise taxable
profits in the near future. Therefore, the Group did not recognise any deferred tax assets in respect of these losses, unless sufficient taxable temporary differences were available by which these deferred tax assets can be offset.

The table below present the accumulated deferred tax assets and liabilities as per end of the periods.



|                                 |  |                   |         |   |      |  |        |      |  |  |        |  
|-------------------------------- |  | ----------------- | ------- | - | ---- |  | ------ | ---- |  |  | ------ | -
|(000)                          |  | As of 31 December |         |   |      | 
|                                 |  | 2016              |         |   | 2015 |  |        | 2014 | 
|Deferred tax assets              |  |                   | 50,773  |   |      |  | 43,549 |      |  |  | 30,074 |  
|Deferred tax liabilities         |  |                   | (11,403 | ) |      |  | (4,263 | )    |  |  | (3,905 | )
|Unrecognized deferred tax assets |  |                   | 39,370  |   |      |  | 39,286 |      |  |  | 26,169 |  

The statutory tax rate is 33.99%. It should be noted that the Group has obtained on 14 October 2009 a tax ruling issued
by the Belgian tax authorities by whom the Group is allowed to exempt 80% of all future revenues originated from patents and licences registered in the books of the Group. The tax ruling has no expiration date and will be applicable until the
patents will fall in the public domain.

Note 28: Commitments

Obligations under the terms of ordinary rental agreements

The company has signed a few agreements concerning financial leases with ING and ES Finance concerning technical equipments. The breakdown per year is
available in Note 20.

The company has signed a few operational leases for building, technical labs and cars with BMS, Rentys, KBC. The breakdown per
maturity is available in Note 20.



F-45



---

##### Table of Contents

Obligations under the Terms of Other Agreements

Mayo Foundation for Medical Education and Research

Based
on the terms of the second amendment of the licence agreement dated 18 October 2010, the Company is committed to the following payments:

Undirected research grants

The Company will fund
research in the Field at Mayo Clinic of $1,000,000 per year for four years beginning in or after 2015, as soon as the Company has had both a first commercial sale of a Licensed Product and a positive cash flow from operations in the previous
financial year. The Company will have an exclusive right of first negotiation to acquire an exclusive license to inventions that are the direct result of work carried out under these grants. In case the Company exercises its option to negotiate, but
no agreement is reached within a certain period, then Mayo Clinic during the following nine-month period cannot enter into a licence with a third party.

Royalties

The Company will pay a 2% royalty (on
net commercial sales by itself or its sub-licensees) to Mayo Clinic, for all of the products that absent the Mayo Licence would infringe a valid claim of a Licensed Patent (each, a Licensed
Product), during a royalty period (on a Licensed Product-by-Licensed Product basis) beginning on the date of first commercial sale of such Licensed Product and
ending on the earlier of: (i) 15 years from first commercial sale; (ii) the date on which such Licensed Product is no longer covered by a valid claim of a Licensed Patent in the territories in which it is sold; (iii) or termination of the
Mayo License.

Currently no liability has been accounted for by the Group for these variable payments to Mayo Foundation.

Corquest Inc

Based on the terms of the Share Purchase
Agreement dated 5 November 2014, former shareholders of Corquest Inc will be entitled to an earn-out payment based on the net revenues generated by the Company, which revenues should be generated from the
selling or divesting, in all or in part, of Proprietary Intellectual Property Rights of the Company to a third party.

As from the 5 November 2014
date until the tenth anniversary of the Agreement, former shareholders of Corquest Inc are entitled to:



| |  |  | an Earn-Out royalty of 2% if Net Revenue are bellow or equal to 10 million euro
| | - |  | -------------------------------------------------------------------------------



| |  |  | or an Earn-Out royalty of 4% if Net Revenue are higher than 10 million euro
| | - |  | ---------------------------------------------------------------------------

OnCyte LLC-Celdara Milestones

Based on the terms of the Share Purchase Agreement dated 21 January 2015, Celdara Medical LLC, former owner of OnCyte LLC, will be entitled to development
and regulatory milestones, sales milestones and royalties based on the net sales generated by the Company.

On the lead program CAR-T NKR-2, Celdara Medical will be entitled to the following development and regulatory milestones;



| |  |  | $5 million when the first patient of the second cohort of the Phase I trial is enrolled1
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | $6 million when dosing the first patient of a Phase II trial
| | - |  | ------------------------------------------------------------



| |  |  | $9 million when dosing the first patient of a Phase III trial
| | - |  | -------------------------------------------------------------



| |  |  | $11 million when filing of the first regulatory approval of CAR-T NKR-2
| | - |  | -----------------------------------------------------------------------



| |  |  | $14 million when CAR-T NKR-2 is approved for commercialization in the US
| | - |  | ------------------------------------------------------------------------

On the other preclinical products



| |  |  | $1.5 million when a filing of an IND to the FDA
| | - |  | -----------------------------------------------



| |  |  | $4 million when dosing the first patient of a Phase II trial
| | - |  | ------------------------------------------------------------



| |  |  | $6 million when dosing the first patient of a Phase III trial
| | - |  | -------------------------------------------------------------



| |  |  | $10 million when filing of the first regulatory approval of CAR-T NKR-2
| | - |  | -----------------------------------------------------------------------



| |  |  | $15 million when CAR-T NKR-2 is approved for commercialization in the US
| | - |  | ------------------------------------------------------------------------

Sales milestones will also be due to Celdara Medical and are dependent of cumulative net sales of products developed out of the OnCyte platform:



| |  |  | $15 million when first time cumulative worldwide net sales equal to or exceed $250 million
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | $25 million when first time cumulative worldwide net sales equal to or exceed $500 million
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | $40 million when first time cumulative worldwide net sales equal to or exceed $1 billion
| | - |  | ----------------------------------------------------------------------------------------

Company
will make annual royalty payments to Celdara Medical on net sales of each product sold by the Company, its affiliates and sublicensees at the applicable rate set forth below:



| |  |  | 5% of the net sales if cumulative worldwide annual net sales are less or equal to $250 million
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | 6% of the net sales if cumulative worldwide annual net sales are greater than $250 million and less or equal to $500 million
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | 7% of the net sales if cumulative worldwide annual net sales are greater than $500 million and less or equal to $1 billion
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | 8% of the net sales if cumulative worldwide annual net sales are greater than $1 billion
| | - |  | ----------------------------------------------------------------------------------------





|1 | Paid as of 31 December 2016
|- | ---------------------------



F-46



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##### Table of Contents

Note 29: Relationships with Third-Parties

Remuneration of key management

Key management consists of
the members of the Executive Management Team and the entities controlled by any of them.



|                      |  |                   |   |  |      |  |   |      |  |  |   | 
|--------------------- |  | ----------------- | - |  | ---- |  | - | ---- |  |  | - | 
|                      |  | As of 31 December |   |  |      | 
|                      |  | 2016              |   |  | 2015 |  |   | 2014 | 
|Number of EMT members |  |                   | 8 |  |      |  | 6 |      |  |  | 6 | 



|                                |  |                                 |       |  |      |  |       |      |  |  |       | 
|------------------------------- |  | ------------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|(000)                         |  | For the years ended 31 December |       |  |      | 
|                                |  | 2016                            |       |  | 2015 |  |       | 2014 | 
|Short term employee benefits[1] |  |                                 | 816   |  |      |  | 309   |      |  |  | 270   | 
|Post employee benefits          |  |                                 | 35    |  |      |  | 6     |      |  |  | 3     | 
|Share-based compensation        |  |                                 | 1,790 |  |      |  | 561   |      |  |  | 976   | 
|Other employment costs[2]       |  |                                 | 22    |  |      |  | 4     |      |  |  | 2     | 
|Management fees                 |  |                                 | 2,055 |  |      |  | 1,299 |      |  |  | 1,239 | 
|                                |  |                                 |       |  |      |  |       |      |  |  |       | 
|Total benefits                  |  |                                 | 4,718 |  |      |  | 2,179 |      |  |  | 2,490 | 
|                                |  |                                 |       |  |      |  |       |      |  |  |       | 



|[1] | Include salaries, social security, bonuses, lunch vouchers
|--- | ----------------------------------------------------------

|[2] | Such as Company cars
|--- | --------------------



|                                |  |                   |         |  |      |  |         |      |  |  |         | 
|------------------------------- |  | ----------------- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                                |  | As of 31 December |         |  |      | 
|                                |  | 2016              |         |  | 2015 |  |         | 2014 | 
|Number of warrants granted      |  |                   | 180,000 |  |      |  | 5,000   |      |  |  | 17,500  | 
|Number of warrants lapsed       |  |                   | 40,000  |  |      |  | 10,000  |      |  |  |        | 
|Cumulative outstanding warrants |  |                   | 310,725 |  |      |  | 187,225 |      |  |  | 192,225 | 
|Exercised warrants              |  |                   |        |  |      |  |        |      |  |  | 120,000 | 
|Outstanding payables (in 000) |  |                   | 687     |  |      |  | 537     |      |  |  | 363     | 

Transactions with non-executive directors



|                         |  |                                |       |  |      |  |     |      |  |  |     | 
|------------------------ |  | ------------------------------ | ----- |  | ---- |  | --- | ---- |  |  | --- | 
|                         |  | For the year ended 31 December |       |  |      | 
|(000)                  |  | 2016                           |       |  | 2015 |  |     | 2014 | 
|Share-based compensation |  |                                | 697   |  |      |  | 51  |      |  |  | 46  | 
|Management fees          |  |                                | 363   |  |      |  | 89  |      |  |  | 54  | 
|                         |  |                                |       |  |      |  |     |      |  |  |     | 
|Total benefits           |  |                                | 1,060 |  |      |  | 140 |      |  |  | 100 | 
|                         |  |                                |       |  |      |  |     |      |  |  |     | 



|                                |  |                   |           |  |      |  |           |      |  |  |           | 
|------------------------------- |  | ----------------- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                                |  | As of 31 December |           |  |      | 
|                                |  | 2016              |           |  | 2015 |  |           | 2014 | 
|Number of warrants granted      |  |                   | 50,000    |  |      |  |          |      |  |  | 5,000     | 
|Number of warrants lapsed       |  |                   |          |  |      |  |          |      |  |  |          | 
|Number of exercised warrants    |  |                   |          |  |      |  | 5,000     |      |  |  | 10,000    | 
|Cumulative outstanding warrants |  |                   | 57,904    |  |      |  | 7,904     |      |  |  | 12,904    | 
|Outstanding payables (in 000) |  |                   | 148       |  |      |  | 80        |      |  |  |          | 
|Shares owned                    |  |                   | 2,869,685 |  |      |  | 3,443,065 |      |  |  | 3,639,710 | 



F-47



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##### Table of Contents

Transactions with shareholders



|                            |  |                                 |    |  |      |  |     |      |  |  |       | 
|--------------------------- |  | ------------------------------- | -- |  | ---- |  | --- | ---- |  |  | ----- | 
|                            |  | For the years ended 31 December |    |  |      | 
|(000)                     |  | 2016                            |    |  | 2015 |  |     | 2014 | 
|Rent(1)                     |  |                                 | 99 |  |      |  | 299 |      |  |  | 299   | 
|Patent costs(2)             |  |                                 |   |  |      |  | 93  |      |  |  | 592   | 
|Scientific collaboration(3) |  |                                 |   |  |      |  |    |      |  |  | 754   | 
|Other                       |  |                                 |   |  |      |  |    |      |  |  |      | 
|                            |  |                                 |    |  |      |  |     |      |  |  |       | 
|Total                       |  |                                 | 99 |  |      |  | 392 |      |  |  | 1,645 | 
|                            |  |                                 |    |  |      |  |     |      |  |  |       | 



|[1] | Relate to lease paid to Biological Manufacturing Services, company controlled by Tolefi SA until April 30, 2016
|--- | ---------------------------------------------------------------------------------------------------------------

|[2] | Relate to Mayo License depreciation
|--- | -----------------------------------

|[3] | Relate to directed research grant paid to Mayo Clinic under License Agreement
|--- | -----------------------------------------------------------------------------



|                     |  |                   |   |  |      |  |    |      |  |  |    | 
|-------------------- |  | ----------------- | - |  | ---- |  | -- | ---- |  |  | -- | 
|                     |  | As of 31 December |   |  |      | 
|(000)              |  | 2016              |   |  | 2015 |  |    | 2014 | 
|Outstanding payables |  |                   |  |  |      |  | 39 |      |  |  | 76 | 

Note 30: Loss per share

The loss per share is calculated by dividing loss for the year by the weighted average number of ordinary shares outstanding during the period. As the Group is
incurring net losses, outstanding warrants have an anti-dilutive effect. As such, there is no difference between the basic and the diluted earnings per share. In case the warrants would be included in the calculation of the loss per share, this
would decrease the loss per share.



|                                                |  |                   |           |   |      |  |           |      |  |  |           |  
|----------------------------------------------- |  | ----------------- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|(000)                                         |  | As of 31 December |           |   |      | 
|                                                |  | 2016              |           |   | 2015 |  |           | 2014 | 
|Loss of the year attributable to Equity Holders |  |                   | (23,606   | ) |      |  | (29,114   | )    |  |  | (16,453   | )
|Weighted average number of shares outstanding   |  |                   | 9,313,603 |   |      |  | 8,481,583 |      |  |  | 6,750,383 |  
|                                                |  |                   |           |   |      |  |           |      |  |  |           |  
|Earnings per share (non-fully diluted)          |  |                   | (2.53     | ) |      |  | (3.43     | )    |  |  | (2.44     | )
|                                                |  |                   |           |   |      |  |           |      |  |  |           |  

Note 31: Events after the close of the fiscal Year

New warrant plan

In February 2017, consultants accepted
in total 20,000 warrants offered in December 2016. These warrants are part of the 100,000 warrants issued by the Board of Directors held on 12 December 2016. These warrants will be vested over 2017, 2018 and 2019 and may become exercisable as
early as January 2020.

Exercise of warrants issued in May 2013

Over the month of January 2017, a total of 207,250 warrants issued in May 2013 were exercised by some employees and members of the management team. As a
result, 207,250 new shares were issued and the capital of the Company was increased by an amount of k547, bringing the capital of Celyad SA to k33,118 on February 1st 2017.



F-48



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##### Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.



|             |  |  |  |                     |  |            |  |                                                                      
|------------ |  |  |  | ------------------- |  | ---------- |  | ---------------------------------------------------------------------
|             |  |  |  | Celyad S.A.        
|             |  | 
|4 April 2017 |  |  |  | /s/ Christian Homsy
|             |  |  |  |                     |  | By: Title: |  | Christian Homsy Chief Executive Officer
(Principal Executive Officer)



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##### Table of Contents

EXHIBIT INDEX



|        |  |                                                                                                                                              |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- |  | ----------- |  | ---------- | ------- |  |  | --------- |  |  |  | --------- | 
|        |  |                                                                                                                                              |  | Incorporated by Reference |      
|Exhibit |  | Description                                                                                                                                  |  | Schedule/
Form            |       |  | File
Number |  |            | Exhibit |  |  | File
Date | 
|        |  |                                                                                                                                              |  |                           |      
|1.1#    |  | Articles of Association (English translation)                                                                                                |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 
|        |  |                                                                                                                                              |  |                           |      
|2.1     |  | Form of Deposit Agreement                                                                                                                    |  |                           | F-1/A |  |             |  | 333-204251 |         |  |  | 4.1       |  |  |  | 6-15-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|2.2     |  | Form of American Depositary Receipt (included in Exhibit 2.1)                                                                                |  |                           | F-1/A |  |             |  | 333-204251 |         |  |  | 4.2       |  |  |  | 6-15-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|4.1     |  | Non-Commercial Lease Agreement, dated October 31, 2007, between Immobilière Belin 12 SA and the registrant, as amended (English translation) |  |                           | F-1   |  |             |  | 333-204251 |         |  |  | 10.1      |  |  |  | 5-18-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|4.2    |  | Services Agreement, dated January 7, 2008, between the registrant and Patrick Jeanmart SPRL (English translation)                            |  |                           | F-1   |  |             |  | 333-204251 |         |  |  | 10.3      |  |  |  | 5-18-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|4.3    |  | Open-Ended Employment Contract, dated April 2, 2014, between the registrant and George Rawadi (English translation)                          |  |                           | F-1   |  |             |  | 333-204251 |         |  |  | 10.4      |  |  |  | 5-18-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|4.4#   |  | Employment Contract, effective September 12, 2016 between the registrant and David Gilham                                                    |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 
|        |  |                                                                                                                                              |  |                           |      
|4.5#   |  | Open Ended Employment Contract, effective December 1, 2014 between the registrant and Dieter Hauwaerts (English Translation)                 |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 
|        |  |                                                                                                                                              |  |                           |      
|4.6    |  | Management Services Agreement, dated February 22, 2008, between the registrant and Christian Homsy                                           |  |                           | F-1   |  |             |  | 333-204251 |         |  |  | 10.6      |  |  |  | 5-18-2015 | 
|        |  |                                                                                                                                              |  |                           |      
|4.7#   |  | Services Agreement, effective September 1, 2016 between the registrant and NandaDevi SPRL, represented by Philippe Dechamps                  |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 
|        |  |                                                                                                                                              |  |                           |      
|4.8#   |  | Services Agreement, dated December 7, 2015 between the registrant and KNLC SPRL, represented by Jean-Pierre Latere DwanIsa                  |  |                           |       |  |             |  |            |         |  |  |           |  |  |  |           | 



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|       |  |                                                                                                                                                                                  |  |  |       |  |  |  |            |  |  |  |       |  |  |  |           | 
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----- |  |  |  | ---------- |  |  |  | ----- |  |  |  | --------- | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.9#  |  | Services Agreement, dated August 4, 2015 between the registrant and ImXense SPRL, represented by Frederic Lehmann                                                                |  |  |       |  |  |  |            |  |  |  |       |  |  |  |           | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.10   |  | Exclusive License Agreement, dated April 30, 2010, between the Trustees of Dartmouth College and Celdara Medical, LLC, as amended                                                |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.9  |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.11   |  | Exclusive License Agreement, dated June 27, 2014, between the Trustees of Dartmouth College and Celdara Medical, LLC, as amended                                                 |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.10 |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.12   |  | Technology License Contract, dated June 4, 2007, between the registrant and Mayo Foundation for Medical Education and Research, as amended                                       |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.11 |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.13** |  | Stock Purchase Agreement, by and among the registrant and Celdara Medical, LLC, dated as of January 5, 2015                                                                      |  |  | F-1/A |  |  |  | 333-204251 |  |  |  | 10.12 |  |  |  | 5-29-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.14** |  | Asset Purchase Agreement, by and among OnCyte, LLC, Celdara Medical, LLC and the registrant, dated January 21, 2015                                                              |  |  | F-1/A |  |  |  | 333-204251 |  |  |  | 10.13 |  |  |  | 5-29-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.15** |  | Share Purchase Agreement, by and between the registrant and Didier de Canniere and Serge Elkiner, dated as of October 31, 2014                                                   |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.14 |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.16   |  | Agreement for the Provision of Services for Production of Cardiac Cells between Biological Manufacturing Services and the registrant, dated April 11, 2011 (English translation) |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.15 |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.17#  |  | License and Collaboration Agreement between the registrant and ONO Pharmaceuticals Co., Ltd., dated July 11, 2016.                                                               |  |  |       |  |  |  |            |  |  |  |       |  |  |  |           | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.18  |  | Warrant Plans (English translation)                                                                                                                                              |  |  | F-1   |  |  |  | 333-204251 |  |  |  | 10.16 |  |  |  | 5-18-2015 | 
|       |  |                                                                                                                                                                                  |  |  |      
|4.19# |  | Warrant Plan 2016 (English translation)                                                                                                                                          |  |  |       |  |  |  |            |  |  |  |       |  |  |  |           | 



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##### Table of Contents

|      |  |                                                                                                                                                                                         |  |  |  |  |  |  |  | 
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|8.1#  |  | List of Subsidiaries of the registrant                                                                                                                                                  |  |  |  |  |  |  |  | 
|      |  |                                                                                                                                                                                         |  |  | 
|12.1# |  | Certification by the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  | 
|      |  |                                                                                                                                                                                         |  |  | 
|12.2# |  | Certification by the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  | 
|      |  |                                                                                                                                                                                         |  |  | 
|13.1* |  | Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                               |  |  |  |  |  |  |  | 
|      |  |                                                                                                                                                                                         |  |  | 
|13.2* |  | Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                               |  |  |  |  |  |  |  | 



|# | Filed herewith
|- | --------------

|* | Furnished herewith
|- | ------------------

| | Indicates a management contract or compensatory plan, contract or arrangement
|- | -----------------------------------------------------------------------------

|** | Certain exhibits and schedules to these agreements have been omitted from the registration statement pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish
copies of any of the exhibits and schedules to the Securities and Exchange Commission upon request.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------