REG - Oxford Cannabinoid - Convertible Loan Note Agreements

Oxford Cannabinoid Technologies HoldingsAnnouncement

02/02/2024 15:15

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RNS Number : 9155B  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  +44 (0)20 3034 2820
 Clarissa Sowemimo-Coker (CEO)                 clarissa@oxcantech.com

 Cairn Financial Advisers LLP
 Emily Staples                                 +44 (0)20 7213 0897
 Jo Turner                                     +44 (0) 20 7213 0885

 Axis Capital Markets Limited
 Richard Hutchison                             +44 (0)20 3026 0320

 Acuitas Communications                        020 3745 0293 / 07799 767676
 Simon Nayyar                                  simon.nayyar@acuitascomms.com
 Arthur Dingemans                              arthur.dingemans@acuitascomms.com

 

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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