LONDON: Graft Polymer (UK) Plc, a biotechnology company co-developing therapeutics for mental health disorders, announced it has entered a binding letter of agreement to acquire all issued share capital of Awakn Life Sciences Corp., a clinical-stage biotechnology firm focused on treating substance use and mental health disorders.

Under the terms of the proposed acquisition, Graft Polymer plans to issue approximately 2.07 billion new ordinary shares valued at £4.98 million (CAN$8.89 million), based on the closing price of 0.24 pence per share on Dec. 13, 2024.

Dennis Purcell, Chairman of Graft Polymer, commented: “This proposed acquisition marks an important milestone for Graft Polymer as we broaden our focus to address the pressing global challenges of addiction and mental health disorders. Awakn’s advanced research and clinical programs offer the potential to develop more effective and accessible treatments for these critical areas of need. We believe this strategic move will not only drive value for our shareholders but also contribute meaningfully to improving the lives of millions impacted by these conditions.”

The completion of this acquisition is contingent on several conditions, including satisfactory due diligence, regulatory and shareholder approvals, and the execution of a definitive agreement.

The acquisition aims to exchange Awakn’s common shares, restricted share units (RSUs), and deferred share units (DSUs) for new ordinary shares in Graft Polymer at an exchange ratio of 46.67 new shares for each unit of Awakn’s shares. All fractional shares will be rounded down.

Awakn’s outstanding common share purchase warrants will also be converted to new warrants over Graft Polymer’s shares, while Awakn will seek consent from holders of stock options to cancel all existing options.

Graft Polymer’s acquisition of Awakn, to be conducted via a Canadian plan of arrangement under the Business Corporations Act (British Columbia), will require approval from Awakn’s shareholders and the British Columbia court. Post-acquisition, Awakn plans to delist from the Canadian Securities Exchange, the FSE, and the OTCQB.

This transaction highlights the strategic synergy and shared focus of both companies on addiction and mental health therapeutics. It is also noted as a potential related party transaction due to Graft Polymer’s CEO, Anthony Tennyson, who is also the CEO of Awakn and holds a 4.85% share in Awakn. The independent directors of Graft Polymer, excluding Tennyson, have approved the transaction, deeming it fair and reasonable.

Awakn’s lead program, AWK-001, and the complementary expertise between the two companies are expected to strengthen their position in the UK biotechnology ecosystem.

Awakn specializes in developing treatments for substance use and mental health disorders, with a particular focus on Alcohol Use Disorder (AUD).