MGC Pharmaceuticals Ltd (LSE:MXC, OTC:MGCLF, ASX:MXC) has received the first funding tranche of US$1.2 million under the new US$10 million financing facility with Mercer Street Global Opportunity Fund, LLC.
The company will now proceed to issue 1.32 million convertible notes with a face value of US$1 each to Mercer Street under the terms of the financing agreement.
MGC Pharma will also issue 21,511,545 ordinary shares to Mercer today as part of the US$10m financing agreement.
Mercer Street Global Opportunity Fund is a fund managed by Mercer Street Capital Partners, a US-based institutional fund manager and MGC Pharma’s largest shareholder.
“Opening up key strategic markets over the next 6 months”
MGC Pharma co-founder and managing director Roby Zomer said: “Mercer’s new US$10m finance facility provides the Company with access to funding for MGC Pharma to continue to execute its business strategy of opening up key strategic markets over the next 6 months.
“During this period the business strategy will focus primarily on generating revenue growth through our existing relationships with Sciensus Rare in the UK and Europe, and AMC in the USA.
“In addition to its sales growth strategy, MGC is very excited about the potential value that the recent 40% acquisition of the ZAM medical data collection App, and its associated machine learning algorithm bring to the company.
“This investment it not only aimed at reducing R&D costs and providing the Company with critical proprietary clinical data in the future, but also provides the MGC with the potential for a future additional revenue stream and a value creating asset on the back of the software’s successful implementation and rollout.”
Business commercialisation strategy
The US$10 million financing facility provides MGC Pharma with access to significant capital to fund the execution of its business commercialisation strategy, primarily with Sciensus Rare in the UK and EU and AMC in the USA, as well as advance regulatory approvals for the company’s proprietary products in order to drive revenue growth, assist in the rollout of the ZAM App and provide funding for the Group’s general corporate expenses.
MGC Pharma will continue to implement significant non-revenue driving cost reductions, as announced in the company's recent June quarter report, including the delay of non-core clinical trials.