Kanabo Group Plc (LSE:KNB) the pan-European medical cannabis company that focuses on developing and commercialising cannabis-derived products for medical patients and wellness CBD consumers, announces the successful completion of significant milestones set out in the prospectus published on 29 January 2021.
Achievement of Milestones
First commercial sales in the Primary Markets of a new product line to add to Kanabo’s range of Retail CBD Products, including, inter alia, new CBD oil formulation(s) and or new delivery system for consumer use of the CBD oil formulation(s).
The Company has successfully developed a novel CBD formula containing 78% CBD + Additional minor Cannabinoids and Cannabis-derived Terpenes all from natural sources. Commercial sales commenced in the UK in August 2021. This unique proprietary and patent-pending non-diluent formula provides retail customers and registered patients a superior inhalation experience in both taste and smoothness at a metered dose for the desired physical and mental outcomes.
Sale of one of the Company’s Medical Cannabis Products in the Primary Markets
Kanabo successfully launched its first medical cannabis product in the UK in July 2021, thereby demonstrating its fully operational supply, production, and distribution chain. Kanabo’s proprietary medicinal cannabis extract formulas are now sold in pre-filled, sealed cartridges which can only be used with Kanabo’s VapePod device. The cartridges are sold as prescribed, unlicensed medicine to patients of LYPHE Group’s UK clinics and dispensaries, which includes The Medical Cannabis Clinic.
Submission of a valid application for approval to undertake VapePod Medical Safety Testing including the submission of detailed protocols
As announced separately, the Company has now submitted a clinical trial protocol for approval at the Hadassah Medical Centre and review by the Helsinki Committee to test the impact from the inhalation of various medical cannabis formulas via a proprietary delivery device, which dispenses standardised and metered inhalations, on healthy volunteers. As the first of its kind, this trial positions Kanabo as the new gold standard for medical cannabis inhalation within the global medical Cannabis community with essential safety and efficacy data for the registration of Kanabo’s VapePod as a medical device in Israel.
Commenting on the achievement of the Milestones, Andy Morrison, former Chairman of Spinnaker Opportunities Plc and Non-Executive Director of Kanabo said: “Much has been achieved by Kanabo in the short time since its admission to trading in February this year. It is clear from recent announcements that the Company has a distinctive offering to investors and ambitious plans, which it is well positioned to deliver.”
Deferred Consideration Shares
Under the terms of the Share Purchase Agreement (the “SPA”) entered between (1) Spinnaker Opportunities Plc; (2) Kanabo; and (3) the Sellers (as defined in the SPA), the Sellers are entitled to receive additional “Deferred Consideration Shares” in the event Kanabo achieves certain Milestones.
The independent directors, namely Andy Morrison and Dr Dan Poulter, are satisfied that three qualifying milestones, as set out above, have now been achieved within the time frame set out in the prospectus published on 29 January 2021 and the SPA.
The record date for the entitlement to the Deferred Consideration Shares has been determined by the independent directors to be 31 December 2021.
The board of the Company may in its absolute discretion determine that a Defaulting Seller (as defined in the SPA) is not entitled to receive some or all their Deferred Consideration Shares and it may allocate such Deferred Consideration Shares to the other (non-defaulting) Sellers on a pro-rata basis
Issue of Equity
The Company therefore announces that 38,461,492 new ordinary shares, the “Deferred Consideration Shares” with a total value of £2.5m will be allotted and issued in due course.
The new shares will rank pari passu with the existing ordinary shares in the Company, will be issued in accordance with the terms of the SPA and will be subject to the lock-in and orderly market agreements therein.
The new shares are expected to be issued following the publication of a prospectus in connection with the Proposed Acquisition of the European businesses of 11157353 Canada Corp. (the “Proposed Transaction”), which trades under the name of Materia (“Materia”) as most recently announced on the 4 November 2021.
An application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading (“Admission”) in due course after issue and the Company will update the market accordingly.