Advanced Oncotherapy Regulatory News (AVO)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

29 June 2020

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

Advanced Oncotherapy announces strategic funding partnership and debt facility

Agreements provide access to up to approximately £42 million of funding

Strategic €20 million funding partnership with VDL Groep expanding close partnership with existing supplier, VDL ETG Precision

Nerano Pharma to provide $30 million debt facility

Advanced Oncotherapy will use facilities to further develop and advance manufacturing of additional LIGHT systems to address unmet medical need

Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton therapy systems for cancer treatment, today announces that it has entered into two financing agreements, providing the Company access to up to approximately £42 million of additional funding to further the development of the LIGHT system and advance the manufacturing of up to 30 LIGHT systems.

Advanced Oncotherapy has entered into an unsecured debt facility agreement with existing supplier VDL ETG Precision BV, a subsidiary of VDL Groep BV, for €20.0 million (the "VDL Facility"), and has also entered into an interest-bearing secured convertible facility with Nerano Pharma Limited ("Nerano Pharma"), a financing vehicle wholly owned by Seamus Mulligan, for up to $30 million (the "Nerano Facility"). Further details of both facilities are set out below.

Nicolas Serandour, CEO of Advanced Oncotherapy, commented:

"We are pleased to announce these debt facilities from VDL Groep and Nerano Pharma, which will allow the Company to further the assembly and certification of our LIGHT system and to advance our pipeline of construction opportunities. We have a long-standing relationship with VDL ETG Precision as a current supplier to our business and we look forward to strengthening this partnership as they help build our business for future orders. In addition, we are delighted with the continued financial support provided by Seamus Mulligan, a significant shareholder in the Company.

"The proton therapy market is still characterised by a highly unmet medical need due to rising populations, only 200 treatment rooms today globally but a need of at least 10,000 treatment rooms if only 20 per cent. of patients undergoing radiotherapy are treated with proton therapy. This additional funding will help us build further LIGHT systems to assist patients across the world, lowering the cost of proton therapy whilst providing more opportunities for treatment and improving patient outcomes."

About the VDL Facility

VDL ETG Precision BV is part of VDL Groep, an industrial family-owned group of companies, and manufactures precision parts, prototypes, sub-assemblies and modules used in the Advanced Oncotherapy's LIGHT System. Advanced Oncotherapy and VDL ETG Precision have the common intention to collaborate in a number of additional areas beyond the activities currently performed by VDL ETG Precision.

The objectives of this collaboration are to ensure a fast delivery of LIGHT systems at an affordable price for users and to position the parties at the forefront of clinical innovation and precision manufacturing.

The Company has entered into the unsecured loan agreement with VDL Participatie BV (the "VDL Agreement"), a member of VDL Groep BV. Under the terms of the VDL Agreement, Advanced Oncotherapy may issue drawdown requests during the six-year commitment period and amounts drawn down will be related to purchase orders placed by Advanced Oncotherapy and VDL ETG Precision and associated with the sale of LIGHT systems to customers.

Advanced Oncotherapy shall repay each loan in full, three years after the initial drawdown date, with the option to voluntarily repay part of or all of the loan in advance. Each loan carries a rate of interest of 5 per cent. per annum payable annually in cash.

About the Nerano Facility

Nerano Pharma is a financing vehicle wholly owned by Seamus Mulligan, a significant shareholder in Advanced Oncotherapy.

The Company has entered into an interest-bearing secured convertible facility with Nerano Pharma for up to $30 million (the "Nerano Agreement"). Advanced Oncotherapy may issue drawdown requests at any time during the three-year term of the Nerano Facility.

A rate of interest of 5 per cent. per annum will accrue on all amounts drawn under the Nerano Facility, paid annually in cash on each anniversary of the Nerano Facility with the option for the Company to defer payment of that interest until the maturity date of the Nerano Facility on 29 June 2023 (without penalty). On the maturity date all amounts drawn under the Nerano Facility and any interest accrued thereon shall be repayable by the Company. The Nerano Facility provides an option for the Company to voluntarily repay part, or all, of the loan (along with any accrued interest) prior to the maturity date. The Nerano Facility is secured on the LIGHT components being built in Daresbury and Geneva and associated intellectual property. Nerano Pharma will be entitled to a share of the profit generated by the Harley Street centre for up to 15 years.

Nerano Pharma may, at its sole discretion, convert: (i) any amount that the Company has opted to voluntarily prepay during the life of the Nerano Facility; and (ii) at maturity of the Nerano Facility in June 2023, any outstanding loan amounts and interest payable, in each case, into new ordinary shares in Advanced Oncotherapy at a price of 25 pence per ordinary share. Conversion of any voluntary prepayment can take place at any time on and from the date on which the Company originally proposed to make that voluntary prepayment and in all circumstances interest will cease to accrue on that voluntary prepayment amount from the originally proposed voluntary prepayment date. Under the terms of the Nerano Agreement, the Board may only issue a drawdown request if it confirms to Nerano Pharma that, as a result, Nerano will have a beneficial interest which is less than 29.9 per cent. of the Company's issued capital upon conversion, taking into account the convertible instruments the Company has issued.

Pursuant to the terms of the Nerano Agreement, Advanced Oncotherapy has today granted 5 million warrants to subscribe for new ordinary shares to Nerano Pharma exercisable until 28 June 2025 at an exercise price of 50 pence. Advanced Oncotherapy will pay to Nerano Pharma a cash commitment fee of 2 per cent. of the total facility upon first drawdown or at maturity.

- ENDS -

Notes for Editors

Currency conversion

Currency conversion rate used £1=$1.25275 and £1=€1.10851 on 24 June 2020.

About VDL Groep www.vdlgroep.com

Strength through cooperation. That is the cornerstone of VDL Groep, the international industrial family business headquartered in Eindhoven, the Netherlands. The company was founded in 1953 by Pieter van der Leegte. Initially VDL Groep specialised in metalworking. Later, when his son Wim van der Leegte took over the company in 1966, the portfolio was expanded to include plastics processing, the development, manufacture and sales of buses and coaches, and high‑tech subcontracting for the semiconductor industry and others.Today VDL Groep is a major player in the subcontracting and semi-finished products sectors, produces its own finished products, such as suspension systems, is active in automotive factory automation, builds heat exchangers and container handling systems, and the family business owns VDL Nedcar in Born, the Netherlands' only large passenger car assembly factory, which carries out assembly line production of cars for third parties. VDL Groep innovates through a combination of craftsmanship, entrepreneurship and high‑quality machinery. The group of companies combines the strength of a multinational with the flat organisation and open, informal working atmosphere of a family business where priority is given to growth opportunities and continuity. VDL Groep operates with almost 17,000 employees in 20 countries. The group comprises 104 operating companies, each with its own speciality, which work together intensively. The combined annual turnover in 2019 was 5.780 billion euros.

About Advanced Oncotherapy Plc www.avoplc.com

Advanced Oncotherapy, a UK headquartered company with offices in London, Geneva, The Netherlands and in the USA, is a provider of particle therapy with protons that harnesses the best in modern technology. Advanced Oncotherapy's team "ADAM," based in Geneva, focuses on the development of a proprietary proton accelerator called, Linac Image Guided Hadron Technology (LIGHT). LIGHT's compact configuration delivers proton beams in a way that facilitates greater precision and electronic control.

Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with innovative technology as well as expected lower treatment-related side effects.

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company will remain the prime provider of an innovative and cost-effective system for particle therapy with protons.