1 November 2021

Oxford Cannabinoid Technologies Holdings plc

Director Dealing

Oxford Cannabinoid Technologies Holdings plc (“the Company”), announces that on 29 October 2021, the Directors of the Company (other than Indraneil (Neil) Mahapatra, the Executive Chairman of the Company) were informed by Kingsley Capital Partners LLP (“KCP”) (a limited liability partnership in which Neil Mahapatra has a beneficial interest in up to 54.3 per cent. and who also controls 100 per cent. of the voting rights of KCP in the Company) that on 1 July 2021, KCP was offered a facility of £1,000,000 by Brown Shipley & Co Limited (“Brown Shipley”) by way of an overdraft (the “Facility”). The Facility was accepted by KCP on 12 July 2021.

As security for the Facility, five members of KCP (the “Guarantors”) provided personal deeds of guarantee (each limited to £200,000) alongside a legal charge granted in favour of Brown Shipley dated 31 August 2021 (the “Charge”) over the 198,466,493 ordinary shares of £0.01 each (“Ordinary Shares”) in the Company held by KCP (“Pledged Shares”), representing approximately 20.66% of the Company’s issued share capital.

As at today’s date, the Company has a written undertaking from KCP that £400,000 has been drawn down under the Facility, KCP is not in default under the terms of the Facility and, further, KCP has undertaken to the Company, States Bridge Capital Limited (“SBC”) and Cairn Financial Advisers LLP (“Cairn”) that it will not draw down any further funds under the Facility until such time as the Pledged Shares have been removed from the Charge.

The Facility includes a collateral maintenance clause in respect of the total value drawn down from the Facility divided by the market value of the Pledged Shares (the “LTV”) relating to circumstances where the LTV exceeds 25% (“Maximum LTV”) and 26.25% (“Execution LTV”). In the event that the Maximum LTV is exceeded, Brown Shipley can make a call on the Guarantors requiring them to place cash with Brown Shipley for the aggregate amount of the excess exposure over the Maximum LTV. If the Guarantors do not meet such a call within 5 business days (or should the Execution LTV subsequently be triggered), Brown Shipley will be entitled to make demand for full repayment of the Facility from KCP, however, the Company understands that Brown Shipley may not currently exercise its security over the Pledged Shares and will only be able to do so from 1 July 2022.

On the basis that there is £400,000 outstanding under the Facility as at today’s date, and using a market value calculated on the closing mid-market price of the Company’s Ordinary Shares  on 29 October 2021 at 2.5 pence per Ordinary Share valuing the Pledged Shares at £4,961,662.33, the LTV is currently equal to 8%.

Pursuant to the Charge, the Company understands that KCP retains beneficial ownership of the Pledged Shares, with full voting rights of the Pledged Shares. As such, KCP has confirmed that its beneficial interest in the Company remains unchanged at 198,466,493 Ordinary Shares, representing approximately 20.66% of the Company’s issued share capital.

On 17 May 2021, KCP undertook to the Company, SBC and Cairn that, other than in certain limited circumstances, they will not, and will procure that any associated party will not, dispose of any interest they hold in their respective Ordinary Shares for one year. In addition, KCP undertook, that they will not, and will use all reasonable endeavours to procure that any associated party will not dispose of any interest in any Ordinary Shares other than through SBC and in accordance with the reasonable requirements of SBC and Cairn (or if applicable any new corporate adviser/broker or financial adviser appointed by the Company) so as to ensure an orderly market for the issued share capital of the Company, for a period of twelve months following the first anniversary of admission to the Official List (by way of a Standard Listing under Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange’s Main Market for listed securities, provided that SBC offers competitive terms in the event of any disposal (the “Lock-in Agreement”).

As the granting of security is a disposal under the Lock-in Agreement, the entering into the Facility by KCP without consent from the Company, SBC and Cairn equates to a breach of the Lock-in Agreement and SBC, Cairn and the Directors (other than Neil Mahapatra) are considering their positions given they were each unaware of the Facility and are consulting with their advisers as to the course of action they should take. As set out above, the Company understands that Brown Shipley is unable to exercise its security over the Pledged Shares until 1 July 2022 and has been informed that KCP are in discussions with Brown Shipley about removing the Pledged Shares from the Charge and will update the market accordingly.

A PDMR form is set out below.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018).

The Directors of the Company accept responsibility for the content of this announcement.

 Enquiries:

About Oxford Cannabinoid Technologies Holdings Plc:

Oxford Cannabinoid Technologies Holdings plc (“OCTP” or the Company”) is the holding company of Oxford Cannabinoid Technologies Ltd (“OCT”) (together the “Group”), a pharmaceutical company developing prescription cannabinoid medicines for approval by key medicines regulatory agencies worldwide and targeting the U$ multi-billion pain market. Cannabinoids are compounds found in the cannabis plant that have been shown to have a range of therapeutic effects on the body, including pain relief. The Group has a clearly defined path to commercialisation, revenues and growth. The Group is developing drug candidates through clinical trials to gain regulatory approval (FDA/MHRA/EMA) that will enable medical professionals to prescribe them with confidence.

The Group’s portfolio aims to balance risk, value and time to market, whilst ensuring market exclusivity around all its key activities. The Group’s lead compound, OCT461201, is a highly potent and selective CB2 agonist and is being developed by OCT in a solid oral dosage form. OCT is conducting pre-clinical testing and development with pre-clinical trials scheduled for 2022. The Group’s product pipeline also uses a balanced drug product strategy that employs both natural and synthetic compounds for the treatment of rare diseases and includes chemically modified phytocannabinoids with improved drug-like characteristics and a proprietary library of cannabinoids.

OCTP operates a partnership model with external academic and commercial partners, including the University of Oxford with whom OCT has had an umbrella research collaboration since 13 March 2018.

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified 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 reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.