MGC Pharmaceuticals - £1.2 million raised in a conditional Placing

Argent BioPharma

11/04/2023 07:01

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RNS Number : 7819V  MGC Pharmaceuticals Limited  11 April 2023

MGC Pharmaceuticals Ltd.

c.£1.2 million raised in a conditional Placing

CannEpil Phase 2b clinical trial funding secured up to c.£0.63 million

UK Broker Option Share offer to raise up to £0.75 million

11 April 2023

ASX, LSE: MXC

 

MGC Pharmaceuticals Ltd ("MGC Pharma" or the "Company"), a European based
pharmaceutical company specialising in the production and development of plant
inspired medicines, is pleased to announce that it has raised £1,204,525
(A$2,204,281) (before expenses) by way of a conditional placing ("Placing") of
274,365,055 new ordinary shares of no par value ("Ordinary Shares") in the
capital of the Company ("Placing Shares") at a price of 0.44 pence (0.8 cents)
per Placing Share ("Placing Price"). The Placing consisted of a placing of
180,005,680 Placing Shares ("UK Placing Shares") with institutional and other
investors in the UK ("UK Placing") and 94,359,375 Placing Shares ("Australian
Placing Shares") to institutional and other investors in Australia
("Australian Placing"). The Placing was supported by a mix of new and existing
institutional and high net worth shareholders. The Company continues to be
supported by existing shareholder Mercer Street Capital which forward funded
£891,000 (A$1,630,530) pursuant to a convertible facility earlier in 2023, in
addition to its cornerstone participation in the Placing. Leading United
Kingdom institutional fund Premier Miton has also continued to support the
Company since its admission to the London Stock Exchange in February 2021, and
has led the UK fundraise as a cornerstone to the UK Placing.

In addition, the Company has also entered into a binding term sheet with
Cantheon Capital, a specialist clinical trial funder for CannEpil®, pursuant
to which Cantheon Capital has agreed to invest up to approximately £629,775
(A$1,152,488) in the Company for up to approximately 144,061,031 Ordinary
Shares ("Cantheon Shares") ("Cantheon Subscription"), on the same pricing
terms. The Cantheon Subscription and the Cantheon Shares will be invested and
issued in tranches, with each tranche subject to the Company paying invoices
for stages of the Phase 2b clinical trial with CannEpil®. The trial, being
conducted in Australia, enables the Company to claim up to a further
£1,095,809 (A$2,005,329) via a 43.5% non-dilutive Australian Federal R&D
government rebate.

The Company has also provided a broker option ("UK Broker Option") of up to
170,454,545 new Ordinary Shares ("UK Broker Option Shares") which could raise
up to a further £750,000 (A$1,372,500) (before expenses). The Company will
also offer Ordinary Shares to s708 exempt sophisticated and high net worth
Australian investors on the same terms and conditions ("Australian HNW Shares"
and, together with the Placing Shares and the UK Broker Option Shares, the
"Fundraise Shares").

The Fundraise Shares and the Cantheon Shares will be issued at a price of 0.44
pence (0.8 cents) each. This price represents a 21% discount from the closing
price of 0.56 pence per Ordinary Share on 6 April 2023 on the LSE, and a 20%
discount to the closing price of 1.0 cents on the ASX, being the last
practicable trading day prior to the release of this Announcement. Upon issue,
the Placing Shares (if the UK Broker Option is fully subscribed), the UK
Broker Option Shares and (if all the Cantheon Shares are issued) the Cantheon
Shares will represent approximately 17% per cent. of the Ordinary Shares then
in issue (assuming that no other Ordinary Shares are issued in the interim).

In addition, the Company has agreed to issue one free attaching option
(exercisable at 0.66 pence (or 1.2 cents) on or before 12 April 2024) for
every two Fundraise Shares and Cantheon Shares subscribed for and issued under
the Placing, UK Broker Option and Cantheon Subscription ("Fundraise Options").
Each Fundraise Option entitles the holder to subscribe for one fully paid
Ordinary Share in the capital of the Company at the exercise price during the
exercise period. The Fundraise Options will not be admitted to trading.

Following the Placing, the UK Broker Option and the Cantheon Subscription, up
to 588,880,631 Fundraise Shares and 294,440,316 Fundraise Options shall be
issued with shareholder approval under

ASX Listing Rule 7.1 (obtained on 30 March 2023) or pursuant to existing
placement capacity as follows:

·      588,880,631 shares with shareholder approval under ASX Listing
Rule 7.1; and

·      294,440,316 options pursuant to existing placement capacity under
ASX Listing Rule 7.1.

Peterhouse Capital is acting as Bookrunner for the Placing and SW4 is acting
as Financial Consultant.

Indicative Timetable

The timetable for the Placing and the UK Broker Option is detailed in the
table below. All dates are indicative only and subject to change at the
discretion of the Board.  Any such change will be announced through a
Regulatory News Service.

  Event                                                               Date
 Placing funds received by the Company                                14 April 2023
 Settlement and London Admission(1)  of UK Placing Shares             14 April 2023
 UK Broker Option funds received by the Company (if any)              18 April 2023
 Settlement and London Admission(1)  of the UK Broker Option Shares   19 April 2023

(1) As defined below.

Rationale for the Fundraise Shares and the Cantheon Subscription; Use of funds

The net proceeds raised by way of the Fundraise Shares and the Cantheon
Subscription are expected to be used to advance progress in the Company's
clinical trial pipeline, including the completion of pre-clinical trials for
CimetrA® (large animal), Investigational New Drug (IND) submission to the
FDA, and pre-IND submission for CannEpil® as the drug enters Phase 2b
trials.  Any balance of the net proceeds will be used for general corporate
purposes.

Roby Zomer, CEO and Managing Director of MGC Pharmaceuticals, commented: "This
fundraise will provide MGC Pharma with the capital required to continue the
excellent progress we have made advancing our clinical pipeline.

"We see it as a vote of confidence in both our clinical pipeline and our
strategy, which we continue to progress, most recently with the listing of
ArtemiC as an OTC product by the FDA.

"Everyone at MGC Pharma is ready to build on the excellent work that has been
done so far, and we are focussed on delivering value to our shareholders and
for patients globally."

 

Investor Presentation

MGC Pharma will deliver an Investor Presentation via the Investor Meet Company
Platform on 11 April 2023 at 3.00 p.m. British Summer Time ("BST"). Questions
can be submitted ahead of the presentation via the Investor Meet Company
Platform at any time during the presentation.

 

Investors can sign up to Investor Meet Company for free and add to meet MGC
PHARMACEUTICALS LIMITED via:

https://www.investormeetcompany.com/mgc-pharmaceuticals-limited/register-investor
(https://www.investormeetcompany.com/mgc-pharmaceuticals-limited/register-investor)

 

Investors who already follow MGC PHARMACEUTICALS LIMITED on the Investor Meet
Company platform will automatically be invited.

 

The new company investor presentation can be found on the MGC Pharma website
at the following URL:
https://mgcpharma.co.uk/static/media/Investor%20Presentation%20-%20April%202023.8d3b8ce1e65698fd1f22.pdf
(https://mgcpharma.co.uk/static/media/Investor%20Presentation%20-%20April%202023.8d3b8ce1e65698fd1f22.pdf)

 

Details of the Placing

The Placing of 274,365,055 Placing Shares at the Placing Price has
conditionally raised £1,204,525 before expenses for the Company.

When issued, the Placing Shares will rank pari passu with the existing
Ordinary Shares in the Company. As noted above, participants in the Placing
will also receive one Fundraise Option for every two Placing Shares subscribed
for and issued.

The Company, its UK lead broker Peterhouse Capital Limited ("Peterhouse") and
SW4 Advisers Ltd ("SW4" and, together with Peterhouse, the "Advisers") have
entered into a placing agreement pursuant to which Peterhouse has, subject to
certain conditions, procured subscribers for the UK Placing Shares at the
Placing Price (together the "Placing Agreement"). The Placing Agreement
contains provisions entitling Peterhouse to terminate the UK Placing (and the
arrangements associated with it) at any time prior to London Admission (as
defined below) of the UK Placing Shares and UK Broker Option Shares in certain
circumstances, including in the event of a breach of the warranties given in
the Placing Agreement, the failure of the Company to comply in any material
respect with its obligations under the Placing Agreement, or the occurrence of
a force majeure event or a material adverse change that Peterhouse decides is
materially prejudicial to the outcome of the UK Placing. If this right is
exercised, the UK Placing will not proceed and any monies that have been
received in respect of the UK Placing will be returned to the applicants
without interest and London Admission will not occur. The Company has agreed
to pay Peterhouse, as broker, a commission and all other costs and expenses
of, or in connection with, the UK Placing.

The Placing is not being underwritten by either of the Advisers or any other
person.

 

Cantheon Subscription

The Company has also entered into a binding term sheet with Cantheon Capital
pursuant to which Cantheon Capital has agreed to invest up to approximately
£629,775 (A$1,152,488) in the Company for up to approximately 144,061,031
Ordinary Shares. The Cantheon Subscription and Cantheon Shares will be
invested and issued in tranches, with each tranche subject to the Company
paying invoices in direct connection with various stages of the Phase 2b
clinical trial with CannEpil®. The subscription amount and number of Ordinary
Shares subscribed for by Cantheon Capital may fluctuate depending on foreign
exchange rates at the time of subscription.

When issued, the Cantheon Shares will rank pari passu with the existing
Ordinary Shares in the Company. Cantheon Capital will also receive one
Fundraise Option for every two Cantheon Shares subscribed for and issued.

 

UK Broker Option Share Subscription

 

In order to provide qualifying shareholders ("Existing Shareholders") and
other qualified investors in the United Kingdom with an opportunity to
participate on the same basis as the investors in the Placing, the Company has
granted Peterhouse a UK Broker Option over up to 170,454,545 new Ordinary
Shares (or such other number of Ordinary Shares as agreed between the Company
and Peterhouse) ("UK Broker Option Shares"). Full take up of this number of
new Ordinary Shares under the UK Broker Option would raise a
further £750,000 for the Company (before expenses). As noted above,
participants in the UK Broker Option will also receive one Fundraise Option
for every two Ordinary Shares subscribed for and issued.

 

Existing Shareholders who hold Ordinary Shares in the Company and are on the
register of members as at 5.00 p.m. BST on 6th April 2023 will be given a
priority right to participate in the UK Broker Option and all orders from such
existing Shareholders will be accepted and processed by Peterhouse, subject to
scale-back in the event of over-subscription under the UK Broker Option. The
UK Broker Option is not being underwritten by either of the Advisers or any
other person. Peterhouse is entitled to participate in the UK Broker Option as
principal.

 

The UK Broker Option is exercisable by Peterhouse on more than one occasion,
at any time from the time of this Announcement to 4.30 p.m. BST on 12 April
2023, at its absolute discretion, following consultation with the Company.
There is no obligation on Peterhouse to exercise the UK Broker Option or to
seek to procure subscribers for the UK Broker Option. Peterhouse may also,
subject to prior consent of the Company, increase the amount of the UK Broker

 

Option or allocate new Ordinary Shares after the time of any initial
allocation to any person submitting a bid after that time.

 

The UK Broker Option Shares are not being made available to the public and
none of the UK Broker Option Shares are being offered or sold in any
jurisdiction where it would be unlawful to do so. No prospectus will be issued
in connection with the UK Broker Option.

 

To subscribe for UK Broker Option Shares, existing Shareholders (who are
qualifying) and other qualified investors should communicate their bid to
Peterhouse via their stockbroker as Peterhouse cannot take direct orders from
individual private investors. Existing Shareholders or other interested
parties who wish to register their interest in participating in the UK Broker
Option Shares should instruct their stockbroker to call Peterhouse on STX:
76086 or 020 7469 0938 or 020 7469 0936 or 020 7220 9797.  Each bid should
state the number of UK Broker Option Shares the existing Shareholder wishes to
subscribe for at the Placing Price.

 

Admission

Application will be made for admission of 180,005,680 Ordinary Shares (being
the number of UK Placing Shares) to the Official List (standard segment) and
to trading on the main market of the London Stock Exchange ("London
Admission") and to the Australian Securities Exchange. It is expected that
London Admission of the UK Placing Shares will become effective at or around
8.00 a.m. (London time) on or around 14 April 2023 and that dealings in the UK
Placing Shares will commence at that time.

An application for London Admission of the UK Broker Option Shares will be
made following expiry of the UK Broker Option. In connection with admission
of the Australian Placing Shares, any Cantheon Shares and Australian HNW
Shares to the Official List (standard segment) and to trading on the main
market of the London Stock Exchange, the Company will be preparing a
prospectus (the "Prospectus") and will seek approval of the Prospectus by the
Financial Conduct Authority ("FCA") and will then make an application for
London Admission of the Australian Placing Shares, any Cantheon Shares and the
Australian HNW Shares. The Prospectus will, subject to approval by the FCA, be
published on the Company's website. The Prospectus is not expected to be
approved or published prior to placees and Cantheon entering into a legally
binding commitment in respect of the Australian Placing Shares, the Cantheon
Shares or the Australian HNW Shares.

Total voting rights

On London Admission of the UK Placing Shares, the Company will have
3,140,212,376 Ordinary Shares in issue, each with one voting
right. Therefore, the Company's total number of Ordinary Shares in issue and
voting rights will be 3,140,212,376 and this figure may be used by
shareholders from London Admission of the UK Placing Shares as the denominator
for the calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the Company under
the FCA's Disclosure Guidance and Transparency Rules. A further announcement
will be made once the number of UK Broker Option Shares (if any) being
admitted to trading is known.

-Ends-

Authorised for release by the board of directors, for further information
please contact:

 MGC Pharmaceuticals Ltd                                        MGC Pharmaceuticals Ltd

 Roby Zomer                                                     Arron Canicais / Rowan Harland

 CEO & Managing Director                                        Joint Company Secretaries

 +61 8 6382 3390                                                +61 8 6382 3390

 info@mgcpharma.com.au (mailto:info@mgcpharma.com.au)           info@mgcpharma.co.uk (mailto:info@mgcpharma.co.uk)
 UK PR Advisors                                                 UK Brokers

 Tavistock                                                      Peterhouse Capital

 Charles Vivian / Tim Pearson                                   Charles Goodfellow / Lucy Williams / Duncan Vasey

 +44 207 920 3150                                               +44 207 469 0930

 mgcpharma@tavistock.co.uk (mailto:mgcpharma@tavistock.co.uk)   cg@peterhousecap.com (mailto:cg@peterhousecap.com) / lw@peterhousecap.com
                                                                (mailto:lw@peterhousecap.com)
 UK Financial Consultant

 SW4 Partners

 Rupert Fane / Nilesh Patel

 rupert@sw4partners.com (mailto:rupert@sw4partners.com)
  / nilesh@sw4partners.com (mailto:nilesh@sw4partners.com)

About MGC Pharma

MGC Pharmaceuticals Ltd (LSE: MXC, ASX: MXC) is a European based
pharmaceutical company, focused on developing and supplying accessible and
ethically produced plant inspired medicines, combining in-house research with
innovative technologies, with the goal of finding or producing treatments to
for unmet medical conditions.

The Company's founders and executives are key figures in the global
pharmaceuticals industry and the core business strategy is to develop and
supply high quality plant inspired medicines for the growing demand in the
medical markets in Europe, North America and Australasia.

MGC Pharma has a robust development pipeline targeting two widespread medical
conditions and has further products under development.

MGC Pharma has partnered with renowned institutions and academia to optimise
the development of targeted plant inspired medicines, to be produced in the
Company's EU-GMP Certified manufacturing facilities.

MGC Pharma has a growing patient base in Australia, the UK, Brazil, and
Ireland and has a global distribution footprint via an extensive network of
commercial partners meaning that it is poised to supply the global market.

 

Follow us through our social media channels:

Twitter: @MGC_Pharma
Facebook: @mgcpharmaceuticals
LinkedIn: MGC Pharmaceuticals Ltd.
Instagram: @mgc_pharma

 

IMPORTANT NOTICES

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would", "could" or
"should" or, in each case, their negative or other variations or comparable
terminology. These forward-looking statements include matters that are not
facts. They appear in a number of places throughout this announcement and
include statements regarding the Directors' beliefs or current expectations.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances. Investors should not
place undue reliance on forward-looking statements, which speak only as of the
date of this announcement.

Notice to overseas persons

This announcement does not constitute, or form part of, a prospectus relating
to the Company, nor does it constitute or contain any invitation or offer to
any person, or any public offer, to subscribe for, purchase or otherwise
acquire any shares in the Company or advise persons to do so in any
jurisdiction, nor shall it, or any part of it form the basis of or be relied
on in connection with any contract or as an inducement to enter into any
contract or commitment with the Company.

This announcement is not for release, publication or distribution, in whole or
in part, directly or indirectly, in or into Canada, Japan or the Republic of
South Africa or any jurisdiction into which the publication or distribution
would be unlawful. This announcement is for information purposes only and does
not constitute an offer to sell or issue or the solicitation of an offer to
buy or acquire shares in the capital of the Company in Canada, Japan, New
Zealand, the Republic of South Africa or any jurisdiction in which such offer
or solicitation would be unlawful or require preparation of any prospectus or
other offer documentation or would be unlawful prior to registration,
exemption from registration or qualification under the securities laws of any
such jurisdiction.  Persons into whose possession this announcement comes are
required by the Company to inform themselves about, and to observe, such
restrictions.

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States.  This announcement is not an offer
of securities for sale into the United States.  The securities referred to
herein have not been and will not be registered under the U.S. Securities Act
of 1933, as amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration.  No public
offering of securities is being made in the United States.

General

Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) or any previous announcement made by the Company is
incorporated into, or forms part of, this announcement.

References to £ and pence, and A$ and cents, in this announcement are to the
legal currency of the United Kingdom, and of Australia, respectively. A
conversion rate of GBP/AUD 1.83 has been used.

 

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