Avacta Therapeutics (AIM: AVCT), a life sciences company developing innovative, targeted oncology drugs, is pleased to announce conditional amendments to the Convertible Bond including deferral of several payments alongside raising gross proceeds of £3.25 million from high net worth investors introduced by Zeus Capital Limited by way of an oversubscribed conditional placing of 6,500,000 new ordinary shares of 10 pence each in the Company (the “Placing Shares”) at a price of 50 pence per share (the “Issue Price”), (the “Placing”).
The net proceeds of approximately £3.1 million from the Placing will be used to settle the October quarterly repayment of the unsecured convertible bond which is due to be paid on 20 October 2025.
Amendment to the Convertible Bond
The Company is pleased to announce that it has agreed to the following amendments to the unsecured convertible bond issued by Avacta Finance Jersey Limited and guaranteed by the Company (as announced on 18 October 2022 (the “Convertible Bond”)) (the “Amendments”):
- The October 2025 quarterly repayment and interest on the Convertible Bond will be paid in cash;
- Quarterly Convertible Bond repayments and interest in respect of 20 January 2026 and 20 April 2026 payment dates will be deferred until 20 October 2027 (together, the “Deferred Repayments”)
- Upon the earlier of (i) the date on which the Company publishes the data readouts of its Phase 1b trials of FAP-Dox (AVA6000) in triple negative breast cancer and (ii) 30 June 2026, the Bondholder will have the right to accelerate the satisfaction (in cash or shares) of one of both the Deferred Repayments and in addition, from 1 October 2026, at any time accelerate the satisfaction of the quarterly repayments on the Convertible Bond, subject to a maximum of one acceleration per quarter
- The conversion price of the Convertible Bond is to be set at 75.0 pence, previously set at 88.72 pence under the terms of the reset conversion price as announced on 22 April 2024. The relevant share settlement price in relation to the quarterly repayments and interest remains calculatable based on the then prevailing VWAP.
The Amendments are subject to the following conditions having been satisfied by 15 January 2026 (the “Long Stop Date”):
- Avacta completing a fundraise of, or receiving gross proceeds of at least £13,000,000 in aggregate on or prior to the Long Stop Date by way of:
- Entering into any partnership or other agreements in respect of its pharmaceutical products; and/or
- Any strategic investment into the Company; and/or;
- An equity fundraise
Christina Coughlin, CEO of Avacta commented:
“I am very pleased Avacta has been able to raise the necessary funds to pay off the October instalment of the convertible bond ahead of schedule and also reach an agreement with the Bondholder to amend the terms of the convertible bond.
“The amendment to the terms of the convertible bond is representative of the excellent progress our pre|CISION® platform continues to make in the clinic and our laboratories, and its terms demonstrate our confidence in Avacta’s ability to partner pre|CISION® across a number of modalities as well as our ability to source additional funding. The initial clinical activity observed in Phase 1b of the FAP-Dox trial is highly encouraging and has further increased our confidence in the utility of our pre|CISION® platform to transform how we treat cancer.”
Admission and Total Voting Rights
Application will be made to the London Stock Exchange for the admission to trading on AIM of the 6,500,000 Placing Shares resulting from the Placing, which is expected to occur at or around 8.00 am on 12 September 2025 (“Admission”). The Placing Shares will rank pari passu with the existing ordinary shares of 10 pence each (“Ordinary Shares”) of the Company.
Following Admission, the Company’s enlarged issued share capital will be 411,048,875. 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 to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.
-Ends-
Background to the fundraise
The Placing has been conducted by Zeus Capital Limited (“Zeus”) as sole bookrunner.
The Placing
The Placing comprises the issue of 6,500,000 Placing Shares at the Issue Price to conditionally raise approximately £3.25 million before expenses for the Company.
The Placing Shares will represent approximately 1.6 per cent of the enlarged share capital of the Company (as enlarged by the Placing Shares) and will rank pari passu with the existing Ordinary Shares.
The Company and Zeus have entered into a placing agreement (the “Placing Agreement”). Pursuant to the terms of the Placing Agreement, Zeus, as agent for the Company, has conditionally agreed to use their reasonable endeavors to procure subscribers for the Placing Shares. Zeus has conditionally placed the Placing Shares with certain investors at the Issue Price.
The Placing Agreement contains certain warranties and indemnities from the Company in favour of Zeus. The Placing is not being underwritten by Zeus nor any other person.
The Placing is conditional upon, amongst other things, the Placing Agreement not having been terminated in accordance with its terms and Admission becoming effective.
Conditions relating to the Placing
The Placing is conditional, inter alia, upon:
- a) the Placing Agreement becoming unconditional in all respects (save for Admission occurring) and not having been terminated in accordance with its terms;
- b) Admission becoming effective by no later than 8.00 a.m. on 12 September 2025 (or such later time and/or date as the Company and Zeus may agree (being not later than 8.00 a.m. on 26 September 2025).
Accordingly, if such conditions are not satisfied or, if applicable, waived, the Placing will not proceed.
Related Party Transaction
Richard Hughes, a Director of the Company, is an associate of Zeus as defined under the AIM Rules. Zeus is therefore a related party of the Company pursuant to the AIM Rules and the payment of a 5 per cent. commission on the value of the Placing Shares placed by Zeus, being £162,500, (“the Zeus Commission”) pursuant to the terms of the Placing Agreement is deemed a related party transaction. The Directors (other than Richard Hughes who is an associate of Zeus Capital) consider, having consulted with the Company’s nominated adviser Peel Hunt, that the Zeus Commission is fair and reasonable insofar as Shareholders are concerned.