Akanda Corp
Akanda Corp has announced plans to implement another reverse stock split, its second to date, following a non-compliance notice from NASDAQ last week.
The international medical cannabis company informed investors this week that it expects to push through a 1-40 reverse stock split on its ordinary shares, effective May 23, 2024.
This will mark the second time the company has employed such a strategy to bump up its share price in the wake of a non-compliance notice, which threatens to see its stock delisted from the NASDAQ stock market if not rectified.
It also marks the third non-compliance notice from the exchange. Previously, the non-compliance issues were in regard to Akanda’s share price, which is required to remain above $1 per share on a consistent basis.
However, on May 16, NASDAQ warned the company that it must ‘maintain a minimum stockholders equity of $2.5m’.
Stockholders’ equity is a calculation of the overall value of a company that belongs to its shareholders, deducting total liabilities from the total value of its assets.
According to Akanda’s latest financial figures, also published last week, the stockholders equity as of December 31, 2023 was -$3.8m, meaning its liabilities now outweigh its assets.
Its full-year results for 2023 paint a concerning picture of the company’s finances. For the year, Akanda reported sales of $2.2m, down from $2.6 a year earlier.
Operating losses halved from $20.2m in 2022 to $10m last year, but net losses increased significantly to $32.3m from $11.7m a year earlier.
This deficit appeared to be in relation to a $24.7 ‘impairment loss’, including the liquidation of subsidiaries Bophelo and the sale of RPK Biosciences.
The company’s total assets now sit at $8.8m, while total liabilities top $12.6m.
In the days following the publication of its financial results, Akanda announced a new share offering of 2,491,381 common shares at a price of $0.1031 per share, raising a total of $1.5m, below the $2.5m it hoped to raise.
Elsewhere, the company announced the resolution of its legal dispute with former CEO Tejinder Virk, who took the company to court amid contractual disagreements which saw him resign in February 2023.
While the two parties have now agreed on an undisclosed settlement, this marks the latest in a staggering five such legal disputes Akanda has been involved in with former staff members since 2022.
DanCann Pharma
Danish pharmaceutical cannabis company DanCann also published its annual results last week, showing increasing revenues but a significant loss due to a shift in strategy,
For year ended December 31, 2023, DanCann reported revenues of DKK 6.07m from the sale of ‘more than 14,000 packages of medicines’, up 6% from DKK 5.71m a year earlier.
However, the company that sells Bedrocan, Bediol, and Bedica in its home market, noted a net loss for the year of DKK 62.26m, down from a loss of DKK 16.06m in 2022.
This dramatic loss was attributed solely to the write-down of its BP1 production facilities, due to its decision to transition from in-house production to ‘sourcing, importing and distributing’ products to the Danish market.
The decision to pivot away from self production was reportedly ‘driven by macroeconomic changes and a decline in the company’s market value’, imposing limits on its financial structure.
“Additionally, external factors such as rising interest rates have presented challenges for pharma and biotech companies needing capital for further development,” it said in its annual report.
Cautioning that it is ‘important for investors to recognise’ the write down is a one off event and not an indication of the value of the company’s ongoing operations, DanCann suggested its new strategy means it is now an ‘asset-light’ business designed for ‘optimal capital efficiency’.
These operational efficiencies are already in ‘full effect’, according to the company, which says it expects revenues to increase significantly this year to DKK 13.3m, with a net loss of DKK 4m.
Meanwhile, it says its self-production project will continue, but due to the need for additional funding, it has been put on hold while it focuses solely on its distribution business, which has ‘consistently generated revenue and profit since its inception’.
Days after the publication of its results, DanCann completed a reduction of its share capital, a move intended to ‘reduce the nominal value of the shares’ below the market price in order to complete a new rights issue.
This reduced the total share capital from DKK 6,248,549.5875 to DKK 1,666,279.89. As such, the value of each share was reduced from DKK 0.0375 to DKK 0.01.
Celadon Pharmaceuticals
Following news last week that the UK-based cannabis operator had seen a significant boost in revenues in 2023, the company now reports that it has completed its first international shipment of product.
In November 2023, Celadon announced that it had signed its first European supply contract worth a total of £26m over three years.
This week, the company completed the shipment of two different medical cannabis products to a ‘long-established’ US business, which is a supplier to a number of different US government departments.
“We are delighted to have completed our first international commercial shipment, especially as it has been made to the United States, the world’s largest pharmaceutical market,” Celadon’s CEO James Short said.
“Combined with our European sales contract, which we intend to begin supplying in H2 2024, this shows the strong international export potential of Celadon’s high-quality medical cannabis products, in addition to the significant domestic market opportunity.
