Reason Bio PLC moves closer to cash shell status after agreement with its main lender

The company’s previously announced tentative agreement with Hercules Capital is now sealed

Motive Bio PLC (LON:MTFB) is set to become a cash shell after striking a deal with Hercules Capital, its lead secured lender.

The directors of Motif are focused on finding a suitable reverse takeover candidate for the company. Once it is officially designated as a cash shell, which will happen once the deal with Hercules takes effect, the company will have six months to execute a reverse takeover, otherwise its AIM listing will be suspended. .

Motif’s U.S. subsidiary, Motif Biosciences Inc, ceased all operations and engaged Tamarack Associates to facilitate the sale of iclaprim and other Motif Inc assets.

Hercules Capital, meanwhile, canceled the loan agreement it entered into with Motif Bio in November 2017 in exchange for which Motif Inc granted Hercules a perfect lien on all of its intellectual property.

The terms of the Hercules Agreement are effective immediately, except for the provisions of a release relating to the pledge of Motif Bio’s interest in Motif Inc, which will become effective no later than May 10, 2020, provided that no voluntary or involuntary filing for bankruptcy has taken place. regarding Motif Bio or Motif Inc.

Motif grants Hercules warrants for 121.3 million shares – approximately 25% of Motif’s issued share capital – which will expire on January 27, 2025 if not exercised before that date at 0.42 per share.

Several former directors have agreed to take stock options in lieu of unpaid attendance fees. In total, options for 1.2 million shares will be granted, with an exercise price of 0.24 pence per share.

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