Celadon Pharmaceuticals Highlights Recent Progress and Financial Position

Celadon Pharmaceuticals Plc (LSE:CEL), a UK-based pharmaceutical firm specializing in cannabis-based medicines, reports that its operations are proceeding according to management expectations. The company has been managing its financial position carefully while fulfilling initial UK customer orders from its Midlands facility. Due to limited capacity at the facility, Celadon is exploring additional options to supply pharmaceutical-grade cannabis to European customers, as previously announced on November 16, 2023.

Recently, Celadon completed a shipment to a UK pharmaceutical customer, part of a contract announced on September 5, 2023. This contract is anticipated to generate up to £1.2 million in annual revenue. This successful shipment highlights Celadon’s commitment to providing high-quality, domestically grown medicinal cannabis.

Equity Fundraise

On May 10, 2024, Celadon announced an equity fundraise of £2.1 million at a price of 105 pence per ordinary share. The investment was structured in four tranches: an initial 238,095 shares on May 10, 2024, and subsequent tranches of 714,286 shares on June 10, July 15, and August 12, 2024. The investor committed to £1 million in new shares, of which £600,000 has been received, including £100,000 from the July tranche. The remaining funds from the July tranche are expected soon. Due to delays in receiving these funds, the company will postpone the August tranche until all due monies are received. Further announcements will be made regarding the timing of the August tranche.

Committed Credit Facility

Celadon extended its £7 million Committed Credit Facility, originally set to expire on May 30, 2025, to November 30, 2025, on the same terms. This facility, arranged with a UK-based investor, allows for an initial £1 million drawdown. As of August 9, 2024, the company received £100,000 of this drawdown. The remaining £900,000 is contingent on the completion of a property transaction, which has faced delays. The company is in ongoing discussions with the lender and is confident in securing the remaining funds. Additionally, the company is exploring substantial longer-term debt facilities to potentially refinance the current Committed Credit Facility.

Current Cash Position

Celadon is closely monitoring its cash position, which has been impacted by delays in receiving funds from the equity fundraise and the Committed Credit Facility drawdown. As of August 9, 2024, the company’s cash balance stands at £48,000. This figure is expected to increase once the remaining funds from the subscription and drawdown are received. The company's ability to continue as a going concern over the next year relies on receiving these funds.

CEO Commentary

James Short, CEO of Celadon Pharmaceuticals, commented on the company’s progress, noting that recent activities include supplying cannabis Active Pharmaceutical Ingredients to UK Specials Manufacturers for private pain clinics. Discussions with potential lenders about substantial new debt facilities are progressing positively. Despite funding delays, both the investor and lender have reaffirmed their support for the company.