MGC
Pharmaceuticals Ltd.
December
2023 Quarter Activity Report and
Cash Flow
Statement
31
January 2024
ASX, LSE:
MXC
Key
Highlights:
· MGC
completed a comprehensive corporate restructuring, completing a
1,000:1 consolidation and conditionally raising a total of
US$7.9 million and
US$0.5 million,
totalling US$8.4
million over the quarter
· MGC
was granted FDA approval in Saudi Arabia for its proprietary
product ArtemiCTM
· CMC
Markets UK PLC (CMC) were
appointed as the Company's joint UK broker with immediate effect on
1 December 2023
MGC Pharmaceuticals Ltd
(MGC Pharma, MGC or the Company) a European based
pharmaceutical company specialising in the production and
development of plant derived medicines, is pleased to provide its
Quarterly Activity Report for the three months ending
31st December 2023.
Roby Zomer, Managing Director and CEO of MGC Pharma,
commented: "We are delighted to share positive
developments from the business during the December quarter. MGC
successfully concluded a thorough corporate restructuring, which
included a 1,000:1 consolidation. Additionally, the company
conditionally raised a total of US$7.9 million and
US$0.5 million,
amounting to a total of US$8.4 million for the quarter. Moreover,
we are pleased to announce that the Company has obtained FDA
approval in Saudi Arabia for its proprietary product,
ArtemiCTM."
Key
Company Activities
ArtemiC™ Receives FDA Approval in Saudi
Arabia
On 19 December 2023 MGC announced it
had been granted approval for its proprietary product ArtemiC™ by
the Food and Drug Authority in the Kingdom of Saudi Arabia (Saudi
FDA).
Following the success of Phase II
clinical trials[1] and
European studies on its effectiveness in assisting with the
recovery of patients from Covid and long-term
Covid[2], ArtemiC™ was
approved by the Saudi FDA as an over-the-counter (OTC) dietary
supplement. Capital Blossom, through its joint venture
collaboration with its Saudi partner worked on obtaining the
approval of the Saudi FDA for the Company. The Company is hopeful
this will transition into commercial orders for MGC as we work
closely with Capital Blossom Ltd who are specialists in this
territory.
Capital Restructuring
During the quarter, the Company
completed a comprehensive corporate restructuring. The
restructuring involved a 1,000:1 capital consolidation and a US$7.9
million fundraising, allowing the Company to proceed with the
execution of its pharmaceutical workplan for 2024. The
restructuring now positions the Company to expand its global
footprint and unlock new avenues for future growth and
collaboration.
December Quarter Sales Update
December Quarter Sales Update: MGC
Pharma's revenues in the December quarter were in line with the
quarterly average sales.
Corporate and Commercial News
Funding and Cashflow Reporting
During the quarter, the Company
conditionally raised US$7.9 million (~A$12.4million) by way of a
placing through the subscription of 31,000,000 new ordinary shares
of no-par value (Ordinary Shares) in the capital of the Company at
a price of US$0.255 (~A$0.40) per share. The Company also agreed to
issue one free attaching option exercisable at US$0.32 (~A$0.50)
with an expiry date of 14 July 2026 for every two shares subscribed
for under the Placement.
Additionally, the Company conducted
a second, strategic placement of $US500,000. Under the Placement,
the Company issued 1,480,000 fully paid ordinary shares (Shares) at
an issue price of AU$0.50 per Share, representing nil discount to
the 21 December 2023 closing price and approximately 5.5% to the
5-day volume weighted average price (VWAP). The placement included
one (1) attaching option for every two (2) Placement Shares issued.
The options are exercisable at AU$1.00 each, with an expiry of 10
January 2027. The funds were raised in order to support the
Company's legal and marketing costs.
At the end of the December, the
Company has ~A$6.482 million of cash on hand.
Accompanying this Activity Report is
a Cash Flow Report for the Quarter ending 31 December
2023.
In accordance with ASX Listing Rule
4.7C.3 the Company advises that during the December 2023 quarter,
payments to related parties totalled A$276k, which consisted of
fees paid to executive and non-executive directors of the
Company.
As detailed in the accompanying
Appendix 4C (Quarterly Cashflow Report), cashflows during the
quarter included A$238k cash outflows associated with inventory
production, A$733k for Research and development costs, ~A$2.3
million for administration costs (including product registration
costs), and cash inflows of ~A$12.1 million.
Results of Annual General Meeting
On 30 November 2023 the Company
announced the voting results from the Annual General Meeting of
shareholders. The Company announced that all motions put to the
meeting were voted by poll, with all resolutions carried. Details
of the results can be found in the following URL:
https://www.investi.com.au/api/announcements/mxc/79f52b83-6ac.pdf
Personnel Changes
On 1 December 2023 Dr Stephen Parker
and Dr Ross Walker resigned as Directors of the Company. Mr Daniel
Robinson, with over 20 years' experience in a broad range of
corporate roles across stockbroking, corporate advisory, investor
relations and governance, was appointed in their place. The Company
thanked Dr Parker and Dr Walker for all their contributions to the
Company over their many years of service and wished them the very
best for the next stage of their careers.
CMC Markets UK PLC (CMC) were appointed as the Company's
joint UK broker with immediate effect on 1 December 2023. CMC is
headquartered in London, with hubs in Sydney and
Singapore.
-ENDS-
Authorised for release by the board of directors, for further
information please contact:
About MGC Pharma
MGC Pharmaceuticals Ltd (LSE: MXC,
ASX: MXC) is a prominent European pharmaceutical company with a
strong commitment to creating accessible and ethically produced
cutting-edge medicines. Our approach combines in-house research
with innovative technologies, all aimed at discovering and
producing treatments for currently unmet medical
conditions.
The company's founders and
executives are distinguished figures in the global pharmaceutical
industry. Our central business strategy revolves around the
development and supply of innovative medicines, responding to the
increasing demand in the medical markets of Europe, North America,
and Australasia.
MGC Pharma maintains a robust
development pipeline that addresses two prevalent medical
conditions, with additional products currently in the developmental
stages. We've established strategic partnerships with renowned
institutions and academia, fostering the optimization of our
medicines' development. These medicines are produced in our EU-GMP
Certified manufacturing facilities, ensuring the highest quality
standards.
With a growing patient base in key
regions like the USA, UK, Australia, and Ireland, MGC Pharma has
also built a global distribution network through a wide-reaching
group of commercial partners. This extensive network places us in a
prime position to supply the global market effectively.
Follow us through our social media channels:
LinkedIn: MGC Pharmaceuticals
Ltd.
Twitter: @MGC_Pharma
Facebook:
@mgcpharmaceuticals
Instagram: @mgc_pharma
Forward Looking Statements
This announcement may include
statements that are, or may be deemed to be, "forward-looking
statements". These forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may, "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking
statements include matters that are not facts. They include
statements regarding the Directors' beliefs or current
expectations. By their nature, forward-looking statements involve
risk and uncertainty because they relate to future events and
circumstances. Investors should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement.
Appendix 4C
Quarterly cash flow report
for entities
subject to Listing Rule
4.7B
|
Name of entity
|
|
MGC PHARMACEUTICALS
LTD
|
|
ABN
|
|
Quarter ended ("current quarter")
|
|
30 116 800 269
|
|
31 December 2023
|
|
Consolidated statement of cash flows
|
Current quarter
$A'000
|
Year to
date
(6 months)
$A'000
|
|
1.
|
Cash flows from operating activities
|
|
|
|
1.1
|
Receipts from customers
|
392
|
904
|
|
1.2
|
Payments for
|
|
|
|
|
(a) research
and development
|
(733)
|
(830)
|
|
|
(b) product
manufacturing and operating costs
|
|
-
|
|
|
i) cost of
sales / inventory
|
(238)
|
(523)
|
|
|
ii) operating costs
|
(93)
|
(93)
|
|
|
(c)
advertising and marketing
|
(496)
|
(614)
|
|
|
(d) leased
assets
|
(75)
|
(75)
|
|
|
(e) staff
costs
|
(2,340)
|
(3,715)
|
|
|
(f)
administration and corporate costs (including product
registrations)
|
(2,055)
|
(3,070)
|
|
1.3
|
Dividends received (see
note 3)
|
-
|
-
|
|
1.4
|
Interest received
|
-
|
-
|
|
1.5
|
Interest and other costs of finance
paid
|
(23)
|
(23)
|
|
1.6
|
Income taxes paid
|
-
|
-
|
|
1.7
|
Government grants and tax
incentives
|
2
|
4
|
|
1.8
|
Other (GST/VAT refund)
|
-
|
-
|
|
1.9
|
Net
cash from / (used in) operating activities
|
(5,658)
|
(8,036)
|
|
|
|
2.
|
Cash flows from investing activities
|
|
|
|
2.1
|
Payments to acquire:
|
-
|
-
|
|
|
(a)
entities
|
-
|
-
|
|
|
(b)
businesses
|
-
|
-
|
|
|
(c)
property, plant and equipment
|
(3)
|
(17)
|
|
|
(d)
investments
|
-
|
-
|
|
|
(e) intellectual
property
|
-
|
-
|
|
(f) other
non-current assets
|
-
|
-
|
|
2.2
|
Proceeds from disposal
of:
|
-
|
-
|
|
|
(a)
entities
|
|
|
(b)
businesses
|
-
|
-
|
|
|
(c)
property, plant and equipment
|
-
|
-
|
|
|
(d)
investments
|
-
|
-
|
|
|
(e) intellectual
property
|
-
-
|
-
-
|
|
(f) other
non-current assets
|
|
2.3
|
Cash flows from loans to other
entities
|
-
|
-
|
|
2.4
|
Dividends received (see
note 3)
|
-
|
-
|
|
2.5
|
Other (cash acquired through assets
acquisition)
|
-
|
-
|
|
2.6
|
Net
cash from / (used in) investing activities
|
(3)
|
(17)
|
|
|
|
3.
|
Cash flows from financing activities
|
|
|
|
3.1
|
Proceeds from issues of equity
securities (excluding convertible debt securities)
|
12,112
|
14,875
|
|
3.2
|
Proceeds from issue of convertible
debt securities
|
-
|
-
|
|
3.3
|
Proceeds from exercise of
options
|
-
|
-
|
|
3.4
|
Transaction costs related to issues
of equity securities or convertible debt securities
|
(385)
|
(595)
|
|
3.5
|
Proceeds from borrowings
|
-
|
-
|
|
3.6
|
Repayment of borrowings
|
-
|
-
|
|
3.7
|
Transaction costs related to loans
and borrowings
|
-
|
-
|
|
3.8
|
Dividends paid
|
-
|
-
|
|
3.9
|
Other (loan entity which where
control was gained after quarter-end)
|
-
|
-
|
|
3.10
|
Net
cash from / (used in) financing activities
|
11,728
|
14,280
|
|
|
|
|
| |
|
|
|
4.
|
Net
increase / (decrease) in cash and cash equivalents for the
period
|
Current quarter
$A'000
|
Year to
date
(6 months)
$A'000
|
|
4.1
|
Cash and cash equivalents at
beginning of period
|
417
|
240
|
|
4.2
|
Net cash from / (used in) operating
activities (item 1.9 above)
|
(5,658)
|
(8,016)
|
|
4.3
|
Net cash from / (used in) investing
activities (item 2.6 above)
|
(3)
|
(17)
|
|
4.4
|
Net cash from / (used in) financing
activities (item 3.10 above)
|
11,728
|
14,280
|
|
4.5
|
Effect of movement in exchange rates
on cash held
|
(1)
|
(5)
|
|
4.6
|
Cash and cash equivalents at end of quarter
|
6,482
|
6,482
|
|
5.
|
Reconciliation of cash and cash
equivalents
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the related items in the
accounts
|
Current quarter
$A'000
|
Previous quarter
$A'000
|
|
5.1
|
Bank balances
|
6,457
|
391
|
|
5.2
|
Call deposits
|
26
|
26
|
|
5.3
|
Bank overdrafts
|
-
|
-
|
|
5.4
|
Other (provide details)
|
-
|
-
|
|
5.5
|
Cash and cash equivalents at end of quarter (should equal
item 4.6 above)
|
6,482
|
417
|
|
6.
|
Payments to related parties of the entity and their
associates
|
Current quarter
$A'000
|
|
6.1
|
Aggregate amount of payments to
related parties and their associates included in item 1
|
276
|
|
6.2
|
Aggregate amount of payments to
related parties and their associates included in item 2
|
-
|
|
|
Note: if any amounts are shown in
items 6.1 or 6.2, your quarterly activity report must include a
description of, and an explanation for, such payments.
|
The
payments in 6.1 are payments to directors of the company for their
service during the quarter.
|
7.
|
Financing facilities available
Note: the term "facility'
includes all forms of financing arrangements available to the
entity.
Add notes as necessary for an understanding of the sources of
finance available to the entity.
|
Total facility amount at
quarter end
$A'000
|
Amount drawn at quarter
end
$A'000
|
|
7.1
|
Loan facilities
|
-
|
-
|
|
7.2
|
Credit standby
arrangements
|
-
|
-
|
|
7.3
|
Other (please specify)
|
14,600
|
6,948
|
|
7.4
|
Total financing facilities
|
14,600
|
6,948
|
|
7.5
|
Unused financing facilities available at
quarter
end
|
-
|
7,652
|
|
7.6
|
Include in the box below a
description of each facility above, including the lender, interest
rate, maturity date and whether it is secured or unsecured. If any
additional financing facilities have been entered into or are
proposed to be entered into after quarter end, include a note
providing details of those facilities as well.
|
|
$14.6M Convertible note facility
with Mercer Street Opportunity Fund LLC. Refer to ASX announcement
on 29 July 2022 for further information.
|
|
8.
|
Estimated cash available for future operating
activities
|
$A'000
|
|
8.1
|
Net cash from / (used in) operating
activities (Item 1.9)
|
(5,658)
|
|
8.2
|
Cash and cash equivalents at quarter
end (Item 4.6)
|
6,482
|
|
8.3
|
Unused finance facilities available
at quarter end (Item 7.5)
|
7,652
|
|
8.4
|
Total available funding
(Item 8.2 + Item 8.3)
|
14,134
|
|
8.5
|
Estimated quarters of funding available (Item 8.4 divided
by Item 8.1)
|
2.5
|
|
|
Note: if the entity has reported positive net operating cash
flows in item 1.9, answer item 8.5 as "N/A". Otherwise, a
figure for the estimated quarters of funding available must be
included in item 8.5.
|
|
8.6
|
If Item 8.5 is less than
2 quarters, please provide answers to the following
questions:
|
|
|
1.
Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not,
why not?
|
|
|
Answer: N/A
|
|
|
2.
Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so,
what are those steps and how likely does it believe that they will
be successful?
|
|
|
Answer: N/A
|
|
|
3.
Does the entity expect to be able to continue its operations and to
meet its business objectives and, if so, on what basis?
|
|
|
Answer: N/A
|
|
|
Note: where item 8.5 is less than 2 quarters, all of
questions 8.6.1, 8.6.2 and 8.6.3 above must be
answered.
|
Compliance statement
1 This
statement has been prepared in accordance with accounting standards
and policies which comply with Listing Rule 19.11A.
2 This
statement gives a true and fair view of the matters
disclosed.
31 January 2024
Date:
...................................................................................
[lodge electronically without
signature]
Authorised by:
...................................................................................
Roby Zomer - Managing Director
Notes
1.
This quarterly cash flow report and the
accompanying activity report provide a basis for informing the
market about the entity's activities for the past quarter, how they
have been financed and the effect this has had on its cash
position. An entity that wishes to disclose additional information
over and above the minimum required under the Listing Rules is
encouraged to do so.
2. If this
quarterly cash flow report has been prepared in accordance with
Australian Accounting Standards, the definitions in, and provisions
of, AASB 107: Statement of Cash
Flows apply to this report. If this quarterly cash flow
report has been prepared in accordance with other accounting
standards agreed by ASX pursuant to Listing Rule 19.11A, the
corresponding equivalent standard applies to this
report.
3. Dividends
received may be classified either as cash flows from operating
activities or cash flows from investing activities, depending on
the accounting policy of the entity.
4. If this
report has been authorised for release to the market by your board
of directors, you can insert here: "By the board". If it has been
authorised for release to the market by a committee of your board
of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it
has been authorised for release to the market by a disclosure
committee, you can insert here: "By the Disclosure
Committee".
5. If this
report has been authorised for release to the market by your board
of directors and you wish to hold yourself out as complying with
recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles
and Recommendations, the board should have received a
declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that
this report complies with the appropriate accounting standards and
gives a true and fair view of the cash flows of the entity, and
that their opinion has been formed on the basis of a sound system
of risk management and internal control which is operating
effectively.
