Lobe Sciences Ltd announced that it has entered into a term sheet with Cantheon Capital to raise up US$1.5 million, by means of a convertible note financing that would bear interest at 15% per annum with a term of 12 months, to conduct three clinical trials in Australia with partner iNGENu Pty Ltd.
The Canadian biopharmaceutical company said the convertible notes will help fund the design and conduct of clinical trials evaluating Lobe's proprietary psilocin analogues L-130 or L-131.
“The opportunity to advance our proprietary psilocin compounds in multiple human trials puts Lobe in a leading position within the psychedelic biotech marketplace,” Lobe Sciences CEO Philip Young said in a statement.
READ: Lobe Sciences enters into exclusive agreement with contract research organization iNGENū to conduct clinical trials in Australia
“In addition to the commitment from Cantheon we will be able to take advantage of the Australian Federal Government's Research & Development tax incentive program which will provide a 43.5% rebate on our research and development expenses in Australia,” Young added.
Lobe noted the financing will be conducted through six distinct tranches, which each tranche being triggered by various operational events in connection with the trials evaluating Lobe's proprietary psilocin analogues L-130 or L-131, such as the clinical trial deposit and achievement of first patient enrolments in each such trial.
It added that the conversion price of the notes, if executed, shall be the closing price of the company's common shares as quoted on the Canadian Securities Exchange (CSE) the effective day of the convertible note, subject to a minimum of $0.05.
The convertible notes include a number of warrants to be determined by the conversion price, with an exercise price consistent with the conversion price, and a term of three years.
In accordance with the terms of the convertible notes, the conversion price per common share will be adjusted upwards to ensure that Cantheon and its affiliates shall not beneficially own, or have control or direction over, common shares in excess of 19.99% of the number of common shares issued and outstanding immediately after giving effect to the issuance of common shares issuable under the applicable tranche, Lobe said.
All securities issued pursuant to the conversion of the convertible notes and the warrants and common shares underlying the warrants will be subject to a four-month hold period from the date of their respective issuance.
Lobe Sciences is a life sciences company engaged in drug research and development using psychedelic compounds and the development of innovative devices and delivery mechanisms to improve mental health and wellness.
Contact Sean at sean@proactiveinvestors.com