£5.0m Convertible Bond Facility & First Drawdown

Dermatonics, a specialist in topical & dermatological products

25 January 2024 - SkinBioTherapeutics plc, (AIM: SBTX, or the "Company"), the life science business focused on skin health announces that it has entered into a £5.0 million convertible bond facility (the "Facility") with Macquarie Bank Limited ("MBL") and CLG Capital LLC ("CLG").

The Facility would be used primarily to enable the Company to execute one or more near term earnings accretive acquisitions.

Today, the Company has drawn down a £1.6 million tranche from the £5.0 million Facility, in order to finance the upfront cash consideration of £1.68 million for the acquisition of Dermatonics, a specialist in innovative topical and dermatological products in the skincare / woundcare space (see separate announcement today).

Details of the Proposed Facility

Under the Facility, MBL and CLG will provide a convertible bond facility of up to £5.0 million with a coupon on drawn down amounts of 1% per annum over the 3-month term SONIA rate and payable quarterly in cash.

The convertible bonds will be issued in multiple tranches, subject to conditions precedent as set out in the subscription agreement among the Company, MBL and CLG ("Subcription Agreement"). MBL and CLG will purchase the convertible bonds at a fixed price equal to 92% of the principal amount for the first tranche (97% of the principal amount for subsequent tranches). MBL will purchase the first tranche, and each subsequent tranche will be purchased by MBL or CLG pursuant to the terms of the Subscription Agreement.

MBL and CLG can convert the convertible bonds into SkinBioTherapeutics shares ("Shares") by issuing a conversion notice with the price set at the higher of (i) 93% of the 5-day Volume Weighted Average Price of the Shares on one trading day selected by the holder in its sole discretion out of the 5 trading days immediately preceding the date of the conversion notice, and (ii) the minimum conversion price (£0.0475 for the first tranche). The convertible bonds shall have a maturity of two years from issuance.

In addition, warrants amounting to 30% of each tranche will be attached to each tranche of the convertible bonds. The warrants will have a strike price fixed at the Volume Weighted Average Price on the 5 trading days immediately preceding any tranche issuance. The warrants will expire three years after issuance. The number of warrants to be issued under the first tranche is 2,349,244 shares with an exercise price of £0.204321 per share.

The convertible bonds would be capable of redemption at any time by the Company with 20 business days' notice at par plus 8% premium of the principal amount remaining.

MBL and CLG would be unable to convert the convertible bonds to Shares where such conversion would mean that they would become interested (as defined in the City Code on Takeovers and Mergers (the "Takeover Code")) in shares that in aggregate carry more than 19.99 per cent of the of the voting rights of the SkinBioTherapeutics. Instead, the Company would be required to make a cash alternative payment [reflecting the amount being converted].

The Company will seek shareholder approval, should this be required, in order to issue the convertible bonds in accordance with the tranches which may be drawn under the Facility.

Stuart Ashman, CEO of SkinBioTherapeutics Plc, said:

"Announcement of this new financing facility and our first drawdown marks the first step in our acquisition strategy as laid out in our FY results last year. We are delighted by the confidence Macquarie Group and CLG Capital have shown in us and look forward to working with them closely going forward. The £5.0 million convertible bond facility complements our fundraise in November and enables us to drive forward with our planned acquisitions. Dermatonics is an established topical and dermatological company in the skincare/woundcare space, which is immediately accretive financially and operationally, and provides new channels for our own products and brings new skills and resource to the team."

Shareholder presentation and Q&A

CEO, Stuart Ashman, and CFO, Manprit Randhawa, will provide a live presentation about the acquisition of Dermatonics and the financing details via the Investor Meet platform Friday 26 January at 10:00 am GMT.

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About CLG Capital LLC

CLG Capital LLC specialises in structured transactions to high growth companies providing patient capital for the companies they invest in.

Caution regarding forward looking statements