NOXXON PHARMA secures a private placement of €1 million and additional financing of up to €10 million through convertible notes with share subscritpion warrants attached to finance further clinical development of NOX-A12

Berlin, Germany, May 2, 2017 – NOXXON Pharma N.V. (Alternext Paris: ALNOX), the “Company”, a biotechnology company whose core focus is on improving cancer treatment by targeting the tumor microenvironment, today announced:

· Completion of a capital increase subscribed for by certain of the Company’s shareholders and the YA II PN Ltd investment fund (the “Investor”). The Company has today agreed to issue 64,512 new shares, each with a par value of €1, at a unit price of €15.50 (representing a discount of 29.2% on the closing price of April 28, 2017 including the share premium, raising a total of €1 million and accounting for approximately 3.15% of the Company’s share capital (the “Private Placement”). Following this capital increase the number of shares outstanding stands at 2,115,609. 53,761 share warrants, with an exercise price of €18.60 were issued to the investors who subscribed for the new shares. The share warrants will have the same characteristics (other than exercise price) as the BSA share warrants attached to the ODIRNANE bonds (see below). YA II PN’s objective in subscribing €250 thousand for these shares[1] as part of the capital increase is to increase the free float and liquidity of the Company’s shares.

· An agreement with the Investor on the arrangement of financing through the issue of ODIRNANE bonds (undated bonds convertible into new shares and/or exchangeable for existing shares, the “Notes”) with BSA (share warrants, the “Warrants”) attached in a maximum nominal amount of up to €10 million, divided into several tranches. Should all the tranches be taken up and should all the BSA share warrants be exercised, up to €20 million in additional capital could be raised, €10 million of which from the redemption of the ODIRNANE bonds in new Company shares and €10 million from the exercise of the share warrants attached to the ODIRNANE bonds. The issue of the ODIRNANE bonds with BSA warrants attached is contingent upon the transfer of the Company’s shares to Alternext Paris’ public offering compartment.

· The conclusion of an agreement with NOXXON’s creditor Kreos Capital (“Kreos”) on modalities of conversion of its debt into shares (see below).

As part of this financing of the Company through Notes and Warrants, certain shareholders[2] in NOXXON have signed a lock-up agreement covering all their shares until December 31, 2017.

«This financing is an important event for NOXXON Pharma as it allows the company to conduct the NOX-A12 clinical trial in collaboration with Merck & Co. Inc./MSD in patients with metastatic colorectal and pancreatic cancer who generally do not respond to checkpoint inhibitors alone, and should allow the company to reach top line response data» commented Aram Mangasarian, CEO of NOXXON.

Use of Proceeds
These funds will be used for the clinical development of NOX-A12 in advanced solid tumors and general corporate purposes.

Legal framework of the transaction
The Company is a Dutch public limited liability company whose shares are listed on Alternext Paris, a multilateral trading facility operated by Euronext Paris S.A., with the ticker symbol ALNOX and the International Securities Identification Number (ISIN): NL0012044762. The Company has an authorized share capital of EUR 10,250,000 divided into 10,250,000 ordinary shares with a par value of EUR 1.00 each. Immediately prior to completion of the transaction, the Company’s issued share capital amounted to 2,051,097 shares with 35,000 ordinary shares held by the Company as treasury shares.

On September 22, 2016, the general meeting authorized the Company’s Board of Directors to issue up 2,006,097 new Shares (representing 100% of the issued and outstanding capital at that time) and exclude any pre-emptive rights for existing shareholders in connection with such issuance for a period of three years. The new shares in connection with the Private Placement were issued by the Board of Directors, with approval from the Supervisory Board, under this existing delegation by the general meeting. Further, the Supervisory Board has in advance consented to the issuance by the Board of Directors of such further number of Shares as needed upon the exercise of the Warrants and conversion of the Notes. The private placement of new shares and Warrants is not based on a prospectus approved by the Dutch Authority for the Financial Markets, the AFM or the French regulator, the AMF.

Characteristics, terms and conditions of the financing through the issuance of convertible notes with share subscription warrants attached
The characteristics, terms and conditions of the financing may be found in the annex to the press release.

Agreement with Kreos Capital
The Company and Kreos signed an agreement that covers the conversion of Kreos’ debt (“Kreos Debt”) into shares as follows:

· Conversion of €925 thousand of Kreos Debt following the Private Placement into 59,677 new shares at a price per share of €15.50. Linked to this conversion Kreos will also be issued 49,724 warrants with an exercise price of €18.60. The share warrants will have the same characteristics (other than exercise price) as the BSA share warrants attached to the ODIRNANE bonds (see below). The amount of debt held by Kreos is thus brought to €1 682 thousand.

· Following the transfer of the shares of the Company to the “public offering” compartment of AlterNext Paris and the issuance of the first tranche of the ODIRNANE for €1 million, additional €841 thousand[3] of Kreos Debt will be converted into shares at a price per share equal to the lower of (i) €15.50 and (ii) the Volume Weighted Average Price (VWAP) over the last 10 trading days preceding the transfer of the shares of the Company to the public offering market compartment of Alternext Paris. As part of this debt conversion of €841 thousand of Kreos Debt Kreos will also receive 45 219 share warrants with an exercise price of €18.60. These share warrants will have the same characteristics (other than exercise price) as the BSA share warrants attached to the ODIRNANE bonds (see below).

· In the case of a new equity financing[4] or a cash contribution as part of a licensing transaction with pharmaceutical partner, an amount of the Kreos Debt equal to the amount of the funds received by the Company will be converted into shares at a price per share equal that used in the equity financing in the case of an equity financing and in other cases a the lower of (i) €15.50 and (ii) the Volume Weighted Average Price (VWAP) over the last 10 trading days preceding the transfer of the shares of the Company to the public offering market compartment of Alternext Paris.

In addition, Kreos Capital has signed an agreement with the Investor under which it (i) engages to (a) not enforce any of its rights linked to the Kreos Debt until 30 November 2018[5] and (b) to limit its sale of shares in the Company on the market until September 30, 2017 (Kreos Capital (x) may not sell shares in the Company if the average daily liquidity of the Company is less than €25 thousand, (y) may sell a maximum of €100 thousand per calendar month if the average daily liquidity is between €25 thousand and €75 thousand, and (z) may sell a maximum of €250 thousand per calendar month if the average daily liquidity is greater than €75 thousand), and (ii) Kreos Capital has granted to the Investor an option to buy its debt at nominal value.