Convertible Loan Note Agreements

Oxford Cannabinoid Tech.Holdings

02 February 2024

 

Oxford Cannabinoid Technologies Holdings plc

("OCTP" or the "Company")

Convertible Loan Note Agreements

Oxford Cannabinoid Technologies Holdings plc (LSE:OCTP), the biotech company developing prescription cannabinoid medicines, is pleased to announce that it has today entered into convertible Loan Note Agreements ("CLN Agreements") with Cantheon Capital LLC ("Cantheon"), directors and existing Shareholders of the Company (the "CLN Investors") totalling £565,000.

As previously announced on 30 January 2024, the CLN Investors will invest up to £565,000 by way of convertible loan notes (the "CLNs"). The investment will be made in two equal tranches and will be triggered by two operational events in connection with the proposed trial, the first being payment by the Company of the first clinical trial commencement invoice and the second being payment of the invoice related to the first patient enrolments.

Cantheon, a fund focused on investing in listed biotech stocks with near term catalysts, will invest an aggregate amount of £450,000 (payable in two equal tranches on achievement of key milestones by the Company) to provide funding in respect of OCTP's Phase I clinical trial for OCT130401, its second programme focusing on the circa £1.8bn Trigeminal Neuralgia ("TN") market, which is anticipated to commence in Q2 2024 in Australia.

The CLNs will be at an interest rate of 8 per cent paid annually in cash in arrears, will each be for a term of 12 months, and will only be convertible in a maximum of two tranches per investor (subject always to the Company's prior consent). The conversion price shall be the higher of £0.005 (being the price which the Company raised money pursuant to a Subscription announced on 30 January 2024 ("Subscription")) and a price equal to the volume weighted average price of the Company's Ordinary Shares over the previous 10 trading days, less a discount of 10 per cent.

As such, the maximum number of Ordinary Shares that may be issued pursuant to the CLN Agreement is 113,000,000 Ordinary Shares ("Maximum Conversion Shares" each such share being a "Conversion Share"). Given that this is outside of the current authorities issued to the Directors at its annual general meeting held on 28 September 2023 and having taken into account the Ordinary Shares to be issued pursuant to the Subscription, the CLNs are conditional on shareholder approval and the Directors are convening a GM on 19 February 2024 to propose the disapplication of pre-emption rights in relation to the issue of the Maximum Conversion Shares.

The CLN Agreements are conditional on (i) shareholder approval; (ii) the Company and Cantheon identifying a mutually acceptable CRO in Australia to perform the Phase I clinical trial for OCT130401; and (iii) the Cantheon investment not exceeding 25 per cent. of the total trial cost at any time. The CLN Agreements are subject to customary events of default, including: (a) events regarding the solvency of the Company or any of its subsidiaries and their ability to pay debts and/or carry on their business; (b) failure to pay any principal or interest within five business days of such payment being due; (c) non-compliance or breach in any material respect of any covenant, condition or provision in the agreement and where such non-compliance or breach is capable of remedy, failure to remedy such non-compliance or breach to the reasonable satisfaction of the CLN holder within 10 Business Days of being given notice of the same; and (d) any warranty contained in the agreement proves to be incorrect in any material respect. On the occurrence of an event of default, the Company shall repay, upon demand, the principal amount of the loan outstanding together with unpaid and accrued interest. The Company shall be permitted to repay the relevant loans outstanding with 30 days' notice subject always to the prepayment penalty of 15% being paid on any amount repaid within six months of receipt of such relevant loan.

The CLN Investors have agreed that any Ordinary Shares to be issued to them under the CLN Agreements may be subject to a delayed admission process whereby, admission will not occur until such time as the Company publishes a prospectus in compliance with Prospectus Regulation Rule 1.2.4 (which prohibits the admission of more than 20 per cent. of the number of securities already admitted to trading on the Main Market of the London Stock Exchange without a prospectus) in relation to the issue of up to a maximum of 113,000,000 such new Ordinary Shares in order to enable those shares to be admitted to the Official List of the FCA and to trading on the Main Market of the London Stock Exchange in accordance with Listing Rule 14.3.4.

The CLN Investors include related parties as defined in the Disclosure Guidance and Transparency Rules DTR 7.3: Julie Pomeroy, Director, investing £5,000; Clarissa Sowemimo-Coker, Director, investing £10,000; and Neil Mahapatra, Director, investing £50,000.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018).

The Directors of the Company accept responsibility for the content of this announcement.

Enquiries:

Oxford Cannabinoid Technologies Holdings plc	[phone]
Clarissa Sowemimo-Coker (CEO)	[e-mail]
Cairn Financial Advisers LLP
Emily Staples	[phone]
Jo Turner	[phone]
Axis Capital Markets Limited
Richard Hutchison	[phone]
Acuitas Communications	020 3745 0293 / 07799 767676
Simon Nayyar	[e-mail]
Arthur Dingemans	[e-mail]

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

About Oxford Cannabinoid Technologies Holdings Plc:

Oxford Cannabinoid Technologies Holdings plc ("OCTP") is the holding company of Oxford Cannabinoid Technologies Ltd (together the "Group"), a pharmaceutical Group developing prescription cannabinoid medicines initially targeting the US$ multi-billion global pain market.

OCTP currently has a portfolio of four drug development programmes. Its lead compound, OCT461201, will initially target neuropathic and visceral pain (including irritable bowel syndrome ("IBS") and chemotherapy induced peripheral neuropathy ("CIPN"). The global market for CIPN alone is currently forecast to reach US$1.17bn by 2028.

OCTP's drug development pipeline comprises both natural and synthetic compounds, and includes compounds targeting trigeminal neuralgia, a severe type of face pain, and cannabinoid derivatives targeting pain and potentially other therapeutic areas. Having established an exclusive licence agreement with Canopy Growth Corporation for their entire pharmaceutical cannabinoid derivative library, OCTP now has a portfolio of almost five hundred derivatives and intellectual property rights including fourteen patent families and associated research data.

OCTP has a clearly defined path to commercialisation, revenues and growth. The Group is developing drug candidates through clinical trials to gain regulatory approval (FDA/MHRA/EMA) that will enable medical professionals to prescribe them with confidence. OCTP's portfolio aims to balance risk, value and time to market, whilst ensuring market exclusivity around all its key activities.

 

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