Summary:

• DanCann Pharma today announces its intention to resolve on the Rights Issue. An EGM is proposed to authorize the Board of Directors to resolve on the Rights Issue.
• The EGM is planned to be held on 20 September 2022 and the notice will be published through a separate press release.
• The purpose of the Rights Issue is to secure financing of DanCann Pharma´s commercialization and business plan. The net proceeds will be used to finance on-going operations and production costs, investments in production equipment, general corporate purposes and repay approximately 35 percent of the currently outstanding loans. The net proceeds from the Rights Issue, including fully subscribed warrants, are expected to be sufficient to finance the Company’s business plan until break-even.
• The Rights Issue is secured to approximately 77 percent corresponding to approximately DKK 21.9 million through a combination of subscription undertakings and guarantee commitments. Provided that the EGM authorizes the Board of Directors and that the Board of Directors subsequently resolves to carry out the Rights Issue:
  • Certain existing shareholders, among others the Company’s CEO and certain board members together with new investors. have undertaken to subscribe for units in the Rights Issue. Total subscription undertakings from existing shareholders amount to approximately DKK 2.3 million, equivalent to approximately 8.1 percent of the Rights Issue; and
  • External guarantors and certain existing shareholders have provided guarantee commitments subject to customary conditions which, in aggregate, amount to approximately DKK 19.6 million, equivalent to approximately 68.9 percent of the Rights Issue.
• Applicable prospectus is expected to be published in October 2022.
• The record date in the Rights Issue is planned to occur late October 2022.
• The subscription period in the Rights Issue is expected to take place late October to early November 2022.
• The subscription price in the Rights Issue will be 6 DKK per unit, equivalent to 0.6 DKK per share. The warrants included in the units will be issued without remuneration.
• The funds from the rights issue are expected to be in the possession of DanCann during November.
• The Company will keep shareholders and investors updated as regards the more exact timing of publishing of prospectus, record date, and subscription period regarding the Rights Issue.

Background and motive

DanCann Pharma expects that during the upcoming year achieve its commercial breakthrough, partly through the newly signed binding supply agreement, with a commitment of approx. DKK 40 million, with the German wholesaler WEECO Pharma. The Company expects, among other things, to introduce new products under the Pilot Programme in H2-2022 and achieve sales for in-house produced products. The sales of the in-house produced products will initially be launched in 2023 and scale during 2023 to bigger volumes for the market in 2024.

DanCann Pharma furthermore aims to accelerate and extend its product portfolio of imported medical cannabis and cannabinoid-based drugs and pharmaceuticals. This by licensing and acquiring exclusive rights to innovative medical cannabis products and clinically de-risked, commercial stage, proprietary drugs, and pharmaceuticals, and hereby building future rapidly and growing revenue stream based on the commercialized product portfolio and pipeline.

Through the Right Issue the Company will have receive a minimum of approximately DKK 21.9 million, before costs. The Company expects that, together with fully subscribed warrants, the transaction will finance the business until the company reaches break-even. During that time, the Company will focus on achieving the following milestones:

• Approval of oil product for the Danish market
• Additional LOI regarding sales of cannabis bulk
• Binding agreements regarding sales of cannabis bulk
• EU-GMP approval of Biotech Pharm1 (Danish Medicines Agency)
• First sales of cannabis bulk
• New partnerships and products

The proceeds received from the Rights Issue will enable the Company to finalize its activities according to its guidance in terms of obtaining necessary permissions from the Danish Medicines Agency (the “DMA”) and the approval of Bioetch Pharm1 (the “BP1”), and hereafter also finalize the commercialization of its future product portfolio consisting of the following protected trademarks: Tetracanoid®, Bidiocanoid®, Mixcanoid®, Varincanoid® and Bigerolcanoid®.

To ensure that DanCann Pharma has the necessary resources and capacity to meet the Company's ambitions, it is important that the Company builds all the required capabilities and the full infrastructure to register and properly manage internally its growing product portfolio through all stages of commercialization, such as the areas:

• Business Development (BD) and licensing
• Regulatory Affairs (RA) and Quality Assurance (QA)
• Medical affairs and pharmacovigilance
• Commercial market access

Extra General Meeting

An EGM is proposed to authorize the Board of Directors to resolve on the Rights Issue. The EGM is planned to be held on 20 September 2022 and the notice will be published through a separate press release no later than 5 September 2022.

Subscription undertakings and guarantee commitments

Provided that the EGM resolves to authorize the Board of Directors and that the Board of Directors resolves to carry out the Rights Issue, certain existing shareholders such as the Company’s CEO, board members, among others Carsten Trads (chairman), Christian Carlsen (vice-chairman), Tue Østergaard (board member), Magnus Dahlmann (board member), Per Wester (board member), Jeppe Krog Rasmussen (CEO and founder), Louise Conradsen (CEO of CannGros ApS, subsidiary of DanCann Pharma) and Sarah Mai Lykke-Kjeldsen (COO) have undertaken to subscribe for units in the Rights Issue.

In addition, external guarantors and certain existing shareholders have provided guarantee commitments subject to customary conditions, which in aggregate with the subscription undertakings, amount to approximately DKK 21.9 million, corresponding to approximately 77 percent of the Rights Issue.

Terns of the Rights issue

• The transactions consist of 47,447,140 shares and 28,468,284 warrants of series TO 2.
• The subscription price in the Rights Issue will be priced at 6 DKK per unit, corresponding to 0.60 DKK per share. The warrants included in the units will be issued without remuneration.
• One (1) existing share entitles to one (1) unit right. Six (6) unit rights give the right to subscribe for one (1) unit consisting of ten (10) new shares, six (6) warrants of series TO2.
• The warrants of series TO 2 will be admitted to trading on the Spotlight Stock Market after the Rights Issue has been registered with the Danish Business Authority.
• A warrant of series TO2 gives the right to subscribe for one (1) new share in the Company during the subscription period during May 2023 at a subscription price that corresponds to 70 percent of a volume-weighted average of the trading price for the Company's shares before the subscription period. However, the subscription price cannot be below the nominal value or exceed DKK 1.2 per share.
• Warrants issued in connection with the Rights issue can bring in an additional approximately DKK 1 – 34.2 million.

Indicative timetable

• Applicable prospectus is expected to be published in October 2022.
• The Board of Directors is expected to resolve on the Rights Issue during October.
• The record date in the Rights Issue is planned to occur late October 2022.
• The subscription period in the Rights Issue is expected to take place late October to early November 2022.
• The Company will keep shareholders and investors updated as regards the more exact timing of the abovementioned events.

Prospectus

The prospectus and subscription form will be made available before the subscription period commences on DanCann Pharma´s website, www.dancann.com.

Short term loan

To secure the Company’s liquidity until the conclusion of the Rights Issue the Company has taken out an additional loan of DKK 3 million from Modelio Equity AB (publ) and Gerhard Dal (the “Loan”). The Loan is subject to market terms and will mature and be repaid at time of receipt of the funds from the Rights Issue.

Advisers

In conjunction with the Rights Issue, the Company has engaged Corpura Fondkommission AB as Financial Advisor and sole bookrunner. Andersen Partners Advokatpertnerselskab & MAQS Advokatbyrå AB acts as legal advisors to the Company. Nordic Issuing acts as issuing agent.

About DanCann Pharma A/S

DanCann Pharma A/S (SS: DANCAN) was founded in 2018 and is a Danish biopharmaceutical Company powered by cannabinoids. DanCann Pharma is a vertically integrated, licensed production and distribution Company based in Denmark. The Company focuses on discovering, developing, manufacturing, and commercializing new therapeutic cannabinoids in a wide range of disease areas.

DanCann Pharma A/S (SS: DANCAN) is listed on the Spotlight Stock Market in Copenhagen.

For more information, visit: www.dancann.com

For further information, please contact:

Carsten Trads, Chairman
E-mail: ctr@dancann.com  
Website: www.dancann.com

Important information

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in DanCann Pharma in any jurisdiction, neither from DanCann Pharma nor from someone else.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Company.  The information contained in this announcement is for background purposes only and does not purport to be full or complete.  No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Corpura Fondkommission AB is acting for DanCann Pharma in connection with the Rights Issue and no one else and will not be responsible to anyone other than DanCann Pharma for providing the protections afforded to its clients nor for giving advice in relation to the Rights Issue or any other matter referred to herein.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States.  The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, New Zealand, Russia, Belarus, Hong Kong, Japan, Singapore, South Africa, South Korea or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. DanCann Pharma has not authorized any offer to the public of shares or rights in any member state of the EEA and no prospectus has been or will be prepared in connection with the Rights Issue. In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

Disclaimer and forward-looking statements

Forward-looking statements are subject to several risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company, to obtain sufficient financing to execute the Company’s business plan; competition; regulation and anticipated and unanticipated costs and delays, the success of the Company’s research strategies, the applicability of the discoveries made therein, the successful and timely completion and uncertainties related to the regulatory process, the timing and outcomes of regulatory or intellectual property decisions and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities.

Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. The forward-looking statements included in this presentation are made as of the date of this presentation and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

This disclosure contains information that DanCann Pharma A/S is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 29-08-2022.

This press release may contain forward-looking statements which reflect the Company’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.