Advanced Oncotherapy - Update on financing and convertible notes

Advanced Oncotherapy

31/05/2023 17:57

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RNS Number : 2447B  Advanced Oncotherapy PLC  31 May 2023

 

 

31 May 2023

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy", "AVO" or the "Company")

 

Partial conversion of Convertible Notes

Update on financing discussions

Further issue under Secured Convertible Note Facility

 

Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton
therapy systems for cancer treatment, announces that it has received a
conversion notice for a portion of the convertible notes, which were issued to
a French counterparty, as announced on 1 March 2023, into new ordinary shares
of 25p each in the share capital of the Company ("Ordinary Shares"). Further
details of the conversion are set out below:

·    Number of convertible notes converted: 10

·    Total value of the convertible notes being converted: £50,000

·    Conversion price: £0.25 being the higher of 90% of the lowest daily
VWAP in 15 days preceding conversion notice of £0.0523854 or the nominal
value of £0.25

·    Number of new Ordinary Shares issued from the conversion: 200,000

 

As set out in the Company's announcement on 1 March 2023, if the conversion
price is below the nominal value of the Ordinary Shares, the Company shall pay
the noteholder a conversion fee calculated to compensate for the difference,
which may be settled through the issue of new Ordinary Shares or cash. As
such, a conversion fee of £56,702 (the "Conversion Fee") is to be paid. The
Conversion Fee will be settled through the issuance of 756,020 new Ordinary
Shares.

Application will be made for admission of the 200,000 new Ordinary Shares
deriving from the conversion of the convertible notes and the 756,020 new
Ordinary Shares in satisfaction of the Conversion Fee to trading on AIM
("Admission") and it is expected that Admission will occur on or around 6 June
2023.

Update on financing discussions

Advanced Oncotherapy's Board continues to consider financing options that are
in the best interests of the Company and its shareholders and, since the
announcement made by the Company on 5 May 2023, has taken steps to manage its
working capital, including through further cost reductions and managing of
existing creditors which will extend the Company's cash runway into June 2023.
In respect of further financing options being explored, the Company is in
discussions to raise further funding under the secured loan note agreement as
well as through other non-dilutive financing options and the board is hopeful
of securing additional financing during June 2023. Whilst the Board is
optimistic of a satisfactory outcome on the financing options being explored,
there can be no certainty that these discussions will be successful, nor to
the terms or timing thereof.

Further announcements will be made with regards to financing at the
appropriate time.

Further issue under secured convertible loan note agreement

Further to the Company's announcements released on 1 March 2023 and 5 May
2023, the Company has issued convertible notes totalling £34,600 under its
secured convertible loan note agreement (the "Secured Convertible Note") in
settlement of amounts the Company owed to an existing supplier.

This brings the total amount of Secured Convertible Notes to £6,379,725.

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.

Total voting rights

Following Admission, the Company's enlarged issued share capital will comprise
538,437,229 Ordinary Shares, with voting rights. The Company does not hold any
Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares in
the Company with voting rights will be 538,437,229. This figure may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Takeover Code, AVO confirms that, following
the receipt of funds under the Secured Convertible Note, it now has 6,379,725
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 30 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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