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For Immediate Release

21 September 2009

Cobra Biomanufacturing Plc

('Cobra' or 'the Company')

Funding Update

Cobra Biomanufacturing Plc (Ticker: CBF), the international GMP provider of biomanufacturing services, gives the following funding update following its trading update on 28 August 2009.

Sultan Scientific Limited ('Sultan') has advanced a loan to the Company of £180,000 pursuant to an investment agreement dated 18 September 2009 (the 'Investment Agreement'). This loan is to be advanced by way of the issue of convertible loan notes to Sultan by the Company ('Convertible Loan Notes') which if converted at the 1p per share conversion price would require the issue of a maximum of 18 million new ordinary shares which will represent 29% of the Company's enlarged share capital. Cobra's largest existing shareholder has additionally provided an unconditional loan to the Company of £50,000 at a rate of 1% over base rate repayable in 3 years time. 

The combined proceeds will be used to fund the Company's near term working capital shortfall and the Investment Agreement additionally grants Sultan the following rights: 
 

A. An option to subscribe for a further £70,000 of convertible loan notes ('Additional Loan Notes') on substantially the same terms as the Convertible Loan Notes subject to compliance by the Company with the requirements of the Takeover Code.

 

B. The right to appoint a director to the board of the Company, such right shall continue for so long as the Convertible Loan Notes remain outstanding or Sultan holds 10 per cent or more of the issued share capital of the Company. 

 

C. The right to be provided with certain management information through its appointed board representative.

 

D. Sultan will also be actively working with Cobra to accelerate the Company's strategic development, including investment and partnering discussions for 12 months from the date of the Investment Agreement. Sultan is engaged on a contingency only basis for which Sultan shall receive certain fees from the Company in due course.

The Company has given certain warranties to Sultan usual for a transaction of this type, including in relation to the following: previous announcements, accounts, financial information, litigation affecting the Company, the Company's intellectual property and other matters.

The Company will write to shareholders this week to convene an extraordinary general meeting to seek shareholder approval for certain matters relating to the Convertible Loan Notes. If shareholders' approval is not received, the Loan Note will become immediately repayable.

Irrevocable undertakings to vote in favour of the resolutions at the extraordinary general meeting have already been received by the Company from shareholders holding 23,268,897 Ordinary Shares, representing approximately 52% per cent of the issued Ordinary Shares.

The Convertible Loan Notes will be secured by way of a fixed and floating charge over the Company's assets. This security will rank behind the security given to the National Westminster Bank Plc.

Commenting on this announcement: 

Dr. Mike Hudson, MD of Sultan said: 'We are very pleased to invest in and work with the highly experienced management team at Cobra. The Company is a notable UK Biosciences leader, supplying their clients and partners around the world with critical expertise and the initial quantities of new biopharmaceutical compounds for regulatory review and clinical trials that are the pipeline of new medicines for the future.' 

Danny Chapchal, Cobra's Chairman said: 'We look forward to having Sultan join us as investors and advisory partners which brings important opportunities in addition to their financial support.

Progress also continues to be made with a number of interested parties regarding potential interim and longer term financing and licensing arrangements. A further announcement concerning such initiatives to underpin growth and development of the business will be made in due course.'

For further information, please contact:

Cobra Biomanufacturing Plc	Tel: +44 (0) 1782 714 181
Danny Chapchal, Non Executive Chairman
Simon Saxby, Chief Executive
Peter Coleman, Finance Director
Buchanan Communications	Tel: +44 (0) 207 466 5000
Tim Anderson
Seymour Pierce (NOMAD & Broker)	Tel: +44 (0) 207 107 8000
Chris Howard/Christopher Wren

Sultan Scientific Limited operates internationally, investing in and building specialised companies capable of rapid commercialisation and value generation in the Medical and Environmental Technology sectors.  

Sultan is a Private Investment Company under the Chairmanship of Sir John Banham with Managing Director, Dr Mike Hudson and management advisers and shareholders who often personally play key roles in the management of the companies in which they invest. Sultan is an active investor in a portfolio of high growth companies, selecting a single lead partner with whom to invest and work in key industry sectors. 

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