REG - Hellenic Dynamics - Repayment of Convertible Loan Note

Hellenic DynamicsAnnouncement

06/07/2023 17:00

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RNS Number : 2539F  Hellenic Dynamics PLC  06 July 2023

6 July 2023

Hellenic Dynamics plc

("Hellenic Dynamics" or the "Company")

 

Repayment of Convertible Loan Note

 

London, 6 July 2023: Hellenic Dynamics Plc (LSE: HELD), the medical cannabis
company based on a 195,506 square meter facility in Northern Greece and
focused on the cultivation and supply of tetrahydrocannabinol ("THC") dominant
strains of medical cannabis flowers to the European market, announces that
the Company has received an approach from Rami Ajami, the holder of an
unsecured convertible loan note of £375,000 ("CLN"). The Company is pleased
to advise that it has made significant cost savings against its initial budget
for the purchase of plant and equipment which are in excess of the value of
the CLN.  As a result of these cost savings, the Company proposed to the
holder to repay the CLN in full, which Rami Ajami has accepted.

 

The CLN has now therefore been redeemed in its entirety.

 

Background

With effect from 5 December 2022, Rami Ajami, who is also an existing
shareholder, subscribed for the CLN in the Company.

 

Under the terms of the subscription agreement for the CLN, conversion of the
CLN would have resulted in:

·      the issue of 125,000,000 new ordinary shares ("Conversion
Shares") in the Company at £0.003;

·      the issue of 125,000,000 warrants at an exercise price of £0.003
for a period of two years if converted within the first 9 months from
admission; and

·      the transfer of 125,000,000 Top-Up Shares (as defined in the
Company's prospectus dated 14 November 2022 ("Prospectus")) from existing
Hellenic shareholders held in escrow ("Escrow Shares"), if converted within
the first 9 months from admission.

 

After taking careful consideration of the recent significant cost savings
referred to above, the Board unanimously approved proposing to Rami Ajami the
repayment of  the CLN in full. Progression of the Company's strategy, as
detailed in its Prospectus and as amended by recent announcements, is
therefore not impacted by this repayment.

 

Furthermore, as the CLN has now been repaid rather than converted, neither the
Conversion Shares nor the Conversion Warrants will be issued and the Escrow
Shares will be returned to the founding shareholders.

 

As announced on 13 June 2023, the Company continues to advance its Product
Outsourcing Development ("POD") concept and it is also pleased to advise that
it is in late stage discussions with a number of funding sources, which
include the application of a number of  grants, which, if successful, will
not only provide sufficient working capital for the accelerated  construction
of the initial PODs but also place the Company in a stronger working capital
position than it was on admission.

 

The Company previously secured a number of unused post harvest area equipment,
as part of the final aspects of completion of its facility which has provided
significant cost savings. The Company is on track to produce its first harvest
for commercial sale, under its existing off-take agreements, in line with its
previous announcements, within Q2 of the Company's fiscal year.

 

The Company will update the market with details of further POD agreements in
due course.

 

Davinder Rai, CEO of Hellenic Dynamics, commented:

"Given our concerted effort to preserve capital and build a platform for
growth for shareholders, as per our announcement dated 6 June 2023, we have
previously made significant savings in the procurement of construction and
equipment, thus we are in a position to repay this CLN without any dilution to
our shareholders. Further to the Company's previous announcement dated 13 June
2023, the Company has also made an application for two grants both
domestically in Greece and at EU level along with entering into advanced
discussion with a well-known financial provider to support the acceleration of
our contract cultivation PODs by way of a capital financing instrument."

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

The Directors of the Company take responsibility for this announcement.

 

 

Enquires:

 

Hellenic Dynamics plc
 
                +44 (0)20 3818 7850

Davinder Rai
 
                davinder@hellenicdynamics.com

 

Cairn Financial Advisers LLP

Emily Staples / Jo Turner
 
                +44 (0)20 7213 0880

 

Peterhouse
Capital
+44 (0)20 7469 0930

 

 

J&H Communications

George Hudson
 
                +44 (0)7803 603130

About Hellenic Dynamics plc

Founded in 2019, Hellenic Dynamics is specifically focused on the cultivation
and supply of THC ("tetrahydrocannabinol") - dominant strains of medical
cannabis flowers, destined for the growing medical cannabis markets
across Europe. Hellenic Dynamics' core strategy is to develop and operate its
40,000 square metre active cultivation licence from its 195,506 square metre
facility located near Thessaloniki in Northern Greece. In full production,
Hellenic Dynamics is capable of producing over 54,000 kg of dried flowers per
annum.

 

Hellenic Dynamics will take advantage of its relatively low cost base
resulting from a comparatively low cost of power, having its own running
water supply and the labour rates for skilled and semi-skilled labour in
Northern Greece.

 

25 European countries now allow medical cannabis via prescription and the
European cannabis market is expected to reach €43.3 billion per annum by
2027. Sales of Hellenic Dynamics' dried THC-dominant cannabis flowers and
extracts are initially intended for export into Europe's largest market -
Germany, in addition to other European markets including domestically in
Greece.

As the first medical cannabis cultivator to obtain a listing on the main
market for listed securities of the London Stock Exchange, Hellenic is
specifically involved in the cultivation and sales of THC-dominant medical
cannabis products which are only available via a medical prescription.
Medicinal cannabis has been approved for use both in the United Kingdom and
Germany, plus 23 other European countries, for conditions including but not
limited to  chronic pain, intractable chemotherapy-related nausea, anxiety,
insomnia, Tourette's syndrome, substance use disorder, multiple sclerosis,
IBS, spinal cord treatment, lack of appetite due to HIV/AIDS, cachexia,
anorexia and glaucoma.

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.

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