Celadon Pharmaceuticals raises £2.1m for working capital

10th May 2024 11:48

(Sharecast News) - Medical cannabis specialist Celadon Pharmaceuticals announced on Friday that it has raised £2.1m to provide it with additional working capital.

The AIM-traded firm raised the funds through a placing and subscription of two million new shares at a price of 105p each, representing a premium of 3.4% to the prior day's closing share price of 101.5p on 9 May.

It said 714,286 of the shares would be issued in monthly instalments until August.

In addition to the Fundraise, Celadon said it had extended the expiry date of its £7m committed credit facility from 30 May 2025 to 30 November 2025, on the same terms as announced on 30 May last year.

The proceeds from the fundraise would provide the company additional working capital, the board explained.

With regard to the proceeds of the fundraise and the £7m committed credit facility available to the group, the directors confirmed that the working capital available to the company would be sufficient for its present requirements for at least 12 months from the date of first admission.

Celadon also said that it had decided not to pursue the issue of convertible loan notes despite previous interest from potential investors.

That decision was influenced by the start of product supply to customers, the recent extension of the £7m committed credit facility, and the funds raised from the issue of equity.

"Following the first shipments to our UK customers in December and £3.0m of fundraising at the end of 2023, we have taken the opportunity to secure £2.1m of additional working capital at an attractive issue price compared to the current share price," said chief executive officer James Short.

"Raising £5.1m of equity in the current environment demonstrates the confidence investors have in Celadon's strategy and the prospects for the developing pharmaceutical-cannabis industry.

"Celadon has featured extensively in recent mainstream UK broadcast news coverage of the impact medical cannabis has had on a handful of selected patients' lives."

Short said the stories, and those of many others that had benefited from medical cannabis, reaffirmed Celadon's belief in the "potential power" of medical cannabis to improve the quality of life for many more.

"I am grateful for the support shown by our new and existing shareholders as we pursue our primary mission of improving the quality of life for patients most in need."

At 1026 BST, shares in Celadon Pharmaceuticals were down 1.33% at 100.15p.

Reporting by Josh White for Sharecast.com.