Mezzanine Loan and Posting of Circular

26 October 2023

Hellenic Dynamics plc

("Hellenic Dynamics" or the "Company")

Mezzanine Loan and Posting of Circular

London, 26 October 2023, Hellenic Dynamics Plc (LSE: HELD), a medical cannabis cultivator with a dedicated focus on producing tetrahydrocannabinol ("THC") dominant strains of medical cannabis flowers for the burgeoning European medical cannabis markets, announces it has signed a US$3 million unsecured Mezzanine Loan facility (the "Facility") with RiverFort Global Opportunities PCC Ltd (the "Lender"), an international financial institution. The Facility will provide the Company with a structured medium-term debt facility that offers draw down and repayment flexibility as it enters its cultivation and sales stage of development.

Highlights

· Hellenic Dynamics has entered into a US$3 million unsecured Mezzanine Loan facility with the Lender for a 36-month term

· US$450,000 has been advanced immediately under the Facility ("First Advance")

· A further $300,000 is available during the next 150 days ("Second Advance")

· The net proceeds from the Facility will be used to 1) accelerate the Company's cultivation plans 2) move to an increased cultivation area, and 3) execute its sales strategy in line with the Company's ambitious growth plans

· The annual interest rate payable by the Company is 15% per annum payable on any outstanding amounts, quarterly in arrears

· Each advance is repayable in monthly cash instalments after a holiday period, expected to be serviced from operational cashflow over the next 12-months

· The principal and interest of the Facility are payable in cash or can be converted at 9.884 pence following approval of the Circular

· 4,249,291 Warrants granted to the lender exercisable at 9.884p for 36 months, being a 40% premium to the 5-day preceding VWAP

· Notice of general meeting has been posted in order to effect a capital reorganisation to access the Second Advance of the Facility

The Facility provides for each tranche of funds drawn down to be repayable within 12 months of drawdown in accordance with an agreed repayment schedule. A First Advance of $450,000 has been made available immediately, which the Company has today requested be drawn down, and a Second Advance of US$300,000 may be drawn down by the Company within the next 150 days. As the Facility allows for the principle amounts to be repaid in cash or a mechanism for them to be repaid in shares, a condition of the Facility is that the Company must be in a position to be able to issue new shares. Therefore, in conjunction with entering the Facility, the Company has today posted a circular to all shareholders containing a Notice of General Meeting ("Notice") and Form of Proxy for shareholders to consider and, if thought fit, approve a capital reorganisation to allow the Company to access the full extent of the Facility. Further details of the Notice are included below.

Davinder Rai, CEO of Hellenic Dynamics, commented: "Having an institutional investor grant a 3-year facility of up to US$3 million to the Company for its next stage of expansion further to completion of phase 1 of its operations, allows the Company to move forward with its expansion plans. The splitting of the First Advance and the Second Advance provides capital optionality for the Company, and the granting of warrants at a 40% premium to the applicable Reference Price shows confidence from the Lender in the Company. I look forward to updating the market on our progress in due course."

Key Funding Terms

A summary of the key terms of the Facility are as follows:

· 15% annual interest payable quarterly in arrears for the term, with a drawdown fee of 6% per advance, payable in cash or shares at the Company's discretion

· The Lender is granted subscription rights for repayment by way of conversion, based on a 40% premium to the Reference Price

· Interest only payable on the drawn down amount

· Each tranche of funds drawn down by the Company are repayable within 12 months of drawdown in accordance with an agreed repayment schedule

· In respect of each tranche of funds advanced, the Company will grant the Lender warrants over ordinary shares in the Company with an exercise period of 36 months from the date of grant:

o  In respect of the First and Second Advance, the Company has granted the Lender 4,249,291 warrants with an exercise price of 9.884 pence

o  In respect of the remaining tranches the Company will grant the Lender warrants to subscribe for new ordinary shares equal to 40% of the funds made available under the tranche divided by the 5-day VWAP prior to the date of each draw down ("Reference Price") at an exercise price equal to a 40% premium to the Reference Price

o  The Lender has the right of set off for any warrant exercise against any amount owed to it by the Company under the Facility agreement

· The Company may elect to miss payments in accordance with the agreed repayment schedule. This would result in various rights being granted to the Lender including the right to subscribe for shares in the Company using a pre-determined calculation

· The Facility is unsecured and Hellenic Dynamics S.A. is a party to a corporate guarantee.

· The Facility agreement contains customary covenants, warranties, undertakings and indemnities for such project related finance and default events and termination rights of the Lender, as well as any penalties to be incurred by the Company, in the event of such default

The Second Advance may be drawn down by the Company at any time within the next 150 days provided that: (1) the Company completes the share consolidation and (2) the Company provides evidence to the Lender of either (a) £250,000 received from sales of product; or (b) receipt of further grants following the date of the Facility agreement which results in aggregate net receivable of no less than £250,000. Subject to the satisfaction of these conditions, the Company will have the ability to request further drawdowns up to a maximum total additional amount of US$2.25 million. The Company will pay interest only on the drawn down funds.

Proposed Capital Reorganisation and Notice of General Meeting

The Company announces that it will today post a circular to all shareholders containing a notice of general meeting and form of proxy seeking shareholder approval for a capital reorganisation and the adoption of new articles of association. A copy of the circular, together with supporting documents, will be available from the Company's website, www.hellenicdynamics.com.

The Directors are proposing a capital reorganisation by way of a:

(i) Share Consolidation: consolidate every 100 Existing Ordinary Shares held into one ordinary share of £0.10 each (the "Consolidated Share"); and

(ii) Share Subdivision and Share Reclassification: subdivide and reclassify each Consolidated Share into 99 Deferred Shares and one New Ordinary Share of £0.001 each.

The effects of the capital reorganisation will be to consolidate the number of shares in issue from 12,530,000,000 to 125,300,000, which will increase the Company's share price by a factor of 100, whilst maintaining the current nominal value per share of £0.001 each.

The General Meeting will be held at the offices of Shakespeare Martineau LLP, 6th Floor, 60 Gracechurch Street, London, EC3V 0HR on 20 November 2023 at 09:00 a.m. GMT.

Enquires: 

About Hellenic Dynamics plc

 Founded in 2019, Hellenic Dynamics is specifically focused on the cultivation and supply of THC ("tetrahydrocannabinol") - dominant strains of medical cannabis flowers, destined for the growing medical cannabis markets across Europe. Hellenic Dynamics' core strategy is to develop and operate its 40,000 square metre active cultivation licence from its 195,506 square metre facility located near Thessaloniki in Northern Greece. In full production, Hellenic Dynamics is capable of producing over 54,000 kg of dried flowers per annum. Hellenic Dynamics will take advantage of its relatively low cost base resulting from a comparatively low cost of power, having its own running water supply and the labour rates for skilled and semi-skilled labour in Northern Greece. 25 European countries now allow medical cannabis via prescription and the European cannabis market is expected to reach ?43.3 billion per annum by 2027. Sales of Hellenic Dynamics' dried THC-dominant cannabis flowers and extracts are initially intended for export into Europe's largest market - Germany, in addition to other European markets including domestically in Greece.

 As the first medical cannabis cultivator to obtain a listing on the main market for listed securities of the London Stock Exchange, Hellenic is significantly different to the number of CBD (Cannabidiol) related companies that have appeared over the recent years. Hellenic Dynamics cultivates THC-dominant medical cannabis flowers. THC-dominant medical cannabis products are only available via a medical prescription. Medicinal cannabis has been approved for use both in the United Kingdom and Germany, plus 23 other European countries, for conditions including but not limited to chronic pain, intractable chemotherapy-related nausea, anxiety, insomnia, Tourette's syndrome, substance use disorder, multiple sclerosis, IBS, spinal cord treatment, lack of appetite due to HIV/AIDS, cachexia, anorexia and glaucoma.

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

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identi?ed by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements re?ect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.