30 June 2025

Celadon Pharmaceuticals Plc

("Celadon" or the "Company")

Funding and Operational Update

Delay in published Annual Report & Accounts

Celadon Pharmaceuticals Plc (AIM: CEL), a UK-based pharmaceutical company focused on the development, production and sale of breakthrough cannabis-based medicines, provides an update on its funding position and operations.

The Company also announces it does not expect to publish its audited Annual Report and Accounts for the year ended 31 December 2024 by 30 June 2025. As a result, trading in the Company's Ordinary Shares on AIM will be suspended with effect from 7:30 a.m. on 1 July 2025 and will remain suspended until publication of its audited Annual Report and Accounts. Further details are set out in section 7 below.

1.         Increased Debt Facility

The Company announced on 11 June 2025 that it had secured a £0.5 million credit facility with a European-based high-net-worth lender (the "Lender"). The Company is pleased to announce that the same Lender has signed an agreement for a further £1.0 million of debt funding. This new commitment has been made on the basis that the total £1.5 million of lending, provided for a two-year term, is now all secured (the "Secured Facilities").

Following receipt of the £1.0 million of new funds, expected within three days under the Secured Facilities, the Company believes it will have sufficient cash into late Q4 2025 based on the current assumptions for revenues, R&D tax credits, and further loan funding.

The Secured Facilities have no financial covenants save for the provision of certain financial information and a customary negative pledge around future indebtedness and restrictions on customary corporate activity, including a sale of the business, payment of dividends, buybacks, and substantial changes in the business, while the credit facility remains outstanding.  The Secured Facilities also contain customary events of default.

Any drawn balances under the Secured Facilities attract a fixed interest rate of 10 per cent per annum payable quarterly, and the Secured Facilities will be repaid and cancelled on the earlier of a financing sufficient to repay the Secured Facilities in full (either debt or equity), a change of control or expiry of the Secured Facilities. Celadon may not reborrow any part of the Secured Facilities which has been prepaid.

Under the terms of the Secured Facilities, Celadon is permitted to use the proceeds for general corporate purposes, including funding of working capital, capital expenditure, and fees, costs, and expenses related to entry into the Secured Facilities.

2.         Future potential £20.0 million Investment

The Company has received an early-stage investment proposal for a convertible loan note of up to £20.0 million ("Convertible Provider"). One of the main conditions is that the business becomes a private company. The Company is currently in negotiations with the Convertible Provider. There can be no guarantee that any negotiations will result in a completed financing transaction. The Convertible Provider is a significant shareholder in the Company and a respected global investor who already has a deep understanding of the Company and the sector in which it operates.

3.         Existing Facility

The Secured Facilities are in addition to the existing unsecured £7.0 million committed credit facility (the "Existing Facility"). As part of entering into the Secured Facilities, the Company obtained a waiver from the Existing Facility provider to prevent any funds being drawn down under the Secured Facilities being used to repay the Existing Facility, permitting the Company to grant security in respect of the Secured Facilities to the Lender. The Company has only been able to draw down £1.0 million under the Existing Facility, which is repayable by 30 November 2025.

4.         Subscription

On 10 May 2024, the Company announced a subscription to raise £2.1m (the "Subscription"). Of the £2.1m, approximately £1.8m was received as announced on 10 May 2024, 7 June 2024 and 15 July 2024. The Company no longer expects to receive the final £0.25m, although the legal commitment to pay remains.   

5.         Delisting

Following entering into the Secured Facilities and receipt of the £1.0 million of funds as described in section 1 above, the Company intends to proceed with a delisting. A further announcement on this will be made in due course.

6.         Operational Update

·    Technical work with the Valeos team in Denmark is ongoing to ensure that the Company can start fulfilling the previously announced European customer contract at scale. There have been significant delays due to regulatory hurdles that have slowed down the export of the Company's genetics to Denmark. These have now been resolved. The Company's contract with Valeos remains in place, and both parties believe demand for the product in Germany continues to increase. Revenue from this European customer contract is forecast to begin in Q4 2025.

·    The Company has submitted a patent for an in-house R&D led proprietary cannabinoid API developed from its plant genetics. This could generate substantial value for the Company in the future. The Company is targeting a UK launch of the first product in Q3 2025, supported by results from a six-month patient study conducted in 1H 2025.

·    The Company continues to conduct a number of R&D studies and has received in excess of £500,000 in R&D tax credits from HMRC. The Company believes it will continue to receive such credits moving forward.

·    The Company has recently successfully passed another Home Office audit and has now been approved to grow a substantially expanded capacity of plants. Allowing the business to focus on the final stage fit-out of Phase 2, which is already materially complete.

·    The Company has successfully completed multiple harvests within its yearly programme and has now started to selectively sell its product into the UK.

·    The Company has made its first supply out of the Company's UK-certified facility to a U.S. customer. This has opened the door to expanded opportunities and further conversations across the American healthcare system.

7.         Delay in the published Annual Report & Accounts

As stipulated by Rule 19 of the AIM Rules, the Company is required to publish its audited Annual Report and Accounts for the year ended 31 December 2024 by 30 June 2025.

Due to the ongoing funding discussions, the Company does not expect to finalise its Annual Report and Accounts in time ahead of 30 June 2025, as required under Rule 19 of the AIM Rules.

As a result, trading in the Company's Ordinary Shares on AIM will be suspended with effect from 7:30 a.m. on 1 July 2025. It will remain suspended until the publication of its audited Annual Report and Accounts.

A further announcement will be made in due course on the timing of publication of the Annual Report & Accounts.

James Short, Founder and Chief Executive Officer of Celadon said:

"I am pleased to announce that we have entered into the Secured Facilities to raise a further £1.0 million of debt funding.

The receipt of a proposal from a credible investor for a convertible loan note of up to £20.0 million is also encouraging. This investor is someone we have been working with for the past four years, and they have already invested a substantial amount in the Company.

We have strong confidence in our direction as a pharmaceutical company, focused on helping patients underserved by their current treatments and medications. We are looking forward to launching another one of our pharmaceutical products into the market this year and to fulfilling our existing contracts.

Our pipeline of potential new products developed through in-house plant genetics research and pheno-hunting, supported by ongoing patent applications, represents significant value creation opportunities. As these innovations move through development and regulatory approval, they have the potential to establish new revenue streams and strengthen our competitive position.

Building a business in a new sector where there is no precedent, significant regulatory hurdles, high CAPEX costs, and limited capital for investment means we have had to adjust our plans to keep moving forward.

The focus now is on delivering the next phase of the strategy and building the valuation of the business back up."

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About Celadon Pharmaceuticals Plc

Celadon Pharmaceuticals Plc is a UK-based pharmaceutical company focused on the development, production and sale of breakthrough cannabis-based medicines. Its primary focus is on improving quality of life for chronic pain sufferers, as well as exploring the potential of cannabis-based medicines for other conditions such as autism. Its 100,000 sq. ft UK facility is EU-GMP approved and comprises indoor hydroponic cultivation, proprietary GMP extraction and an analytical and R&D laboratory. Celadon's Home Office licence allows for the commercial supply of its pharmaceutical-grade cannabis product. The Group owns an approved clinical trial using cannabis-based medicinal products to treat chronic pain in the UK. Celadon also has a minority interest in early-stage biopharma Kingdom Therapeutics, which is developing a licensed cannabinoid medicine to treat children with Autism Spectrum Disorder.

For further information please visit our website www.celadonpharma.com

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.