Advanced Oncotherapy - Additional funding from Secured Convertible Note
05/05/2023 07:00
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RNS Number : 5011Y Advanced Oncotherapy PLC 05 May 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310. MARKET
SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT,
WITH THE RESULT THAT CERTAIN PERSONS PREVIOUSLY BECAME AWARE OF SUCH INSIDE
INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND ALL SUCH PERSONS
SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
5 May 2023
ADVANCED ONCOTHERAPY PLC
("Advanced Oncotherapy", "AVO" or the "Company")
Additional funding from Secured Convertible Note Facility
Further to the Company's announcements released on 1 March 2023, 20 March 2023
and 18 April 2023, Advanced Oncotherapy (AIM:AVO), the developer of LIGHT, the
next-generation proton therapy system for cancer treatment, announces that is
has raised a further £1.37 million under its secured convertible loan note
agreement (the "Secured Convertible Note") from existing investors including a
total of £420,000 from certain Directors of the Company as detailed below
(together, the "Lenders"). This brings the total amount of funds raised under
the Secured Convertible Note to £6.345 million.
Of the additional funds raised under the Secured Convertible Note, £1.245
million has been received as at the date of this announcement. The balance of
funds totalling £125,000 are due to be received shortly.
The additional funding received from the Secured Convertible Note aims to
provide the Company with a cash runway until towards the end of May 2023. The
Company continues to take steps to raise additional financing, including
through raising further funds pursuant to the Secured Convertible Note. Whilst
the terms of the Secured Convertible Note increase the cost to the Company of
the overall facility, the Directors of Advanced Oncotherapy believe that the
Secured Convertible Note is the most attractive available fundraising option
to the Company at the current time and is therefore in the best interests of
the Company and its shareholders.
Dr. Mike Sinclair, Executive Chairman of Advanced Oncotherapy, commented:
"Previously achieving a world first in accelerating protons in a linear manner
to reach clinical energy levels validated the talent, dedication and skill of
our team. That this has not been reflected in the market value of our Company
speaks volumes about the market for early stage medtech stocks in our current
jurisdiction. Your Board is determined to address this challenging paradox."
Further updates on fundraising will be provided as appropriate.
As announced on 1 March 2023, the key terms of the Secured Convertible Note
are as set out in the table below:
Maturity Date 9 months from the date of the secured convertible loan note agreement
Conversion Option to convert prior to the Maturity Date at 20% discount to the next
equity fund raising of the Company
Interest Rate Fixed interest of 1.25% per month until the earliest of the full redemption or
the conversion of the loan
Revenue share entitlement for the Harley Street machine The Operator of the Harley Street Centre shall pay to the Lenders a pro rata
portion of the revenue generated by the Proton Therapy machine which is to be
installed in Harley Street. The total revenue amount will be capped at £2.5
million per annum and the portion each Lender will receive will be calculated
on a pro rata basis according to each Lender's loan amount of the total
Secured Convertible Note. The first payment shall be made at the end of the
first full calendar year of operations of the proton centre located on Harley
Street (London, UK). An annual payment shall be made for 10 consecutive years.
Even if the Secured Convertible Note is redeemed prior to the maturity date or
converted into Ordinary Shares, the revenue share entitlement will continue
for the full 10 years.
A summary of the other material terms of the Secured Convertible Note is set
out in the Appendix of this announcement.
Director participation
Certain of the Directors (the "Participating Directors"), detailed below, are
increasing their subscription in the Secured Convertible Note, which is deemed
to be a Related Party Transaction pursuant to AIM Rule 13.
Secured Convertible Note
Director Existing participation of the Secured Convertible Note Additional participation of the Secured Convertible Note Total Participation
Michael Sinclair £563,000 £270,000 £833,000
(Executive Chairman)
Michael Bradfield £80,000 £50,000 £130,000
(Non-Executive Director)
Enrico Vanni £30,000 £50,000 £80,000
(Non-Executive Director)
Prof. Stephen Myers £25,000 £50,000 £75,000
(Executive Director and ADAM Executive Chairman)
Revenue share entitlement
Director Existing revenue share entitlement p.a.** Additional revenue share entitlement p.a.** Total revenue share entitlement p.a.**
Michael Sinclair £140,750 £67,500 £208,250
(Executive Chairman)
Michael Bradfield £20,000 £12,500 £32,500
(Non-Executive Director)
Enrico Vanni £7,500 £12,500 £20,000
(Non-Executive Director)
Prof. Stephen Myers £6,250 £12,500 £18,750
(Executive Director and ADAM Executive Chairman)
**Revenue share entitlement and pro rata calculations are based on £10
million being raised under the Secured Convertible Note. Revenue share
entitlement is calculated pro rata the aggregate amount raised. Should
additional funds be raised the revenue share entitlements will decrease and be
based pro rata on the higher amount raised.
Related party transaction disclosure
The Participating Directors are directors of AVO and therefore related parties
of the Company for the purposes of the AIM Rules for Companies ("AIM Rules").
Participation in the Secured Convertible Note by the Participating Directors
is a related party transaction under the AIM Rules. The independent Directors
(being Lori Cross and Renhua Zhang) of AVO consider, having consulted with the
Company's nominated adviser, Allenby Capital Limited, that the terms of the
participation in the Secured Convertible Note by the Participating Directors
are fair and reasonable insofar as the Company's shareholders are concerned.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Takeover Code, AVO confirms that, following
this further raise under the Secured Convertible Note, it now has 6,220,125
senior secured fixed rate convertible loan notes ("Loan Notes") in issue (as
at today's date), which have a maturity date of 11 January 2024 and are
convertible into ordinary shares of 25p each in the Company at a conversion
price representing a 20% discount to the next equity fund raising undertaken
by the Company. The Loan Notes pay an interest rate of 1.25% per month and
includes a revenue sharing agreement with Harley Street Centre.
AVO also confirms that as at the close of business on 4 May 2023 its issued
share capital consisted of 537,481,209 ordinary shares of 25 pence each. The
International Securities Identification Number for the Company's ordinary
shares is GB00BD6SX109.
Advanced Oncotherapy plc www.avoplc.com (http://www.avoplc.com/)
Dr. Michael Sinclair, Executive Chairman Tel: +44 (0) 20 3617 8728
Nicolas Serandour, CEO
WH Ireland Limited (Financial adviser) Tel: +44 (0) 20 7220 1666
Antonio Bossi / James Bavister AVOPLC@whirelandcm.com
Allenby Capital Limited (Nomad and Joint Broker)
Nick Athanas / Piers Shimwell (Corporate Finance) Tel: +44 (0) 20 3328 5656
Amrit Nahal / Matt Butlin (Sales & Corporate Broking)
SI Capital Ltd (Joint Broker)
Nick Emerson Tel: +44 (0) 1483 413 500
Jon Levinson Tel: +44 (0) 20 3871 4066
About Advanced Oncotherapy Plc www.avoplc.com (http://www.avoplc.com)
Advanced Oncotherapy, a UK headquartered company with offices in London,
Geneva, The Netherlands and in the USA, is a provider of particle therapy with
protons that harnesses the best in modern technology. Advanced Oncotherapy's
team "ADAM," based in Geneva, focuses on the development of a proprietary
proton accelerator called, Linac Image Guided Hadron Technology (LIGHT).
LIGHT's compact configuration delivers proton beams in a way that facilitates
greater precision and electronic control.
Advanced Oncotherapy will offer healthcare providers affordable systems that
will enable them to treat cancer with innovative technology as well as
expected lower treatment-related side effects.
Advanced Oncotherapy continually monitors the market for any emerging
improvements in delivering proton therapy and actively seeks working
relationships with providers of these innovative technologies. Through these
relationships, the Company will remain the prime provider of an innovative and
cost-effective system for particle therapy with protons.
Appendix
Secured Convertible Note
Financing instrument Secured interest-bearing convertible facility
Principal Up to £15 million
Maturity Date 9 months from the date of the secured convertible loan note agreement
Conversion Option to convert prior to the Maturity Date at 20% discount to the next
equity fund raising of the Company
Interest Rate Fixed interest of 1.25% per month until the earliest of the full redemption or
the conversion of the loan
Revenue share entitlement for the Harley Street machine The Operator of the Harley Street Centre shall pay to the Lenders a pro rata
portion of the revenue the Operator will receive from the Proton Therapy
machine which is to be installed in Harley Street. The total revenue amount
will be capped at £2.5 million per annum and the portion each Lender will
receive will be calculated on a pro rata basis according to each Lender's loan
amount of the total Secured Convertible Note. The first payment shall be made
at the end of the first full calendar year of operations of the proton centre
located on Harley Street (London, UK). An annual payment shall be made for 10
consecutive years. Even if the Secured Convertible Note is redeemed prior to
the maturity date or converted into Ordinary Shares, the revenue share
entitlement will continue for the full 10 years.
Security Secured against the same assets as the existing facilities in place with
Nerano Pharma Ltd, on a pari passu basis, such as the LIGHT components being
built in Daresbury and Geneva, associated intellectual property and the
property at Harley St.
Assignment and transfer by the Lender All transfers and assignments are subject to the Lender receiving the
Company's prior consent not to be unreasonably withheld. Such proposed
transfer or assignment will not be permitted when the proposed transferee or
assignee is a person whose principal business or material activity is
investing in distressed debt or the purchase of loans or other debt securities
with the intention of (or view to) owning the equity (loan to own) or gaining
control of a business or exploiting holdout or blocking positions.
AOB In the event other investors wish to subscribe to this instrument up to a
maximum aggregated amount of £15 million those investors would benefit from
the same terms as detailed above, notably in relation to the interest rate and
(on a pro rata basis) the security package and revenue share entitlement.
Any subscription under the Secured Convertible Note is subject to the consent
of the Lenders and Nerano Pharma Ltd ("Nerano") and disclosure to the Lenders
and Nerano of the identity of such new subscriber.
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