Board of Directors in DanCann Pharma A/S has resolved on a partially (77 percent) secured Rights Issue of approximately DKK 28.5 million and publishes prospectus

COPENHAGEN, Denmark, October 21, 2022 - DanCann Pharma A/S (SS: DANCAN) ("DanCann Pharma" or the “Company”), a Danish company powered by cannabinoids, hereby announces that the Board of Directors in DanCann Pharma today has formally resolved on the previously announced partially (77 percent) guaranteed rights issue of units corresponding to a total of approximately DKK 28.5 million (the “Rights Issue”). The resolution was made based on the authorization from the Extraordinary General Meeting of the Company that was held on the September 20, 2022. The purpose of the Rights Issue is to secure financing of, among others, the approval of the Company’s GMP facility and to get new products on the market. The proceeds from the Rights Issue, including full subscription of issued warrants, are expected to be sufficient to finance the Company’s business plan and to reach a break-even. 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, that will be repaid upon receipt of the funds from the Rights Issue.

The Rights Issue in short:

• The Rights Issue comprises a maximum of 47,447,140 shares, corresponding to an increase in the share capital of a maximum of DKK 1,779,267.75, and a maximum of 28,468,284 warrants of series TO2, corresponding to an increase in the share capital of a maximum of DKK 1,067,560.65.

• Anyone who, on the record date of October 27, 2022, is entered in the share register, maintained by VP Securities A/S has preferential rights to subscribe for new shares in the Rights Issue. 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 and six (6) warrants of series TO 2.

• The subscription price in the Rights Issue will be DKK 6 per unit, corresponding to DKK 0.60 per share. The warrants included in the units will be issued without remuneration.

• The subscription period in the Rights Issue runs from October 31 to and including November 11, 2022.

• DanCann Pharma has received pre-subscription commitments and guarantee commitments of approximately DKK 21.9 million, which corresponds to approximately 77 percent of the initial issue volume, of which approximately DKK 2.3 million is pre-subscription commitments and approximately DKK 19.6 million is guarantee commitments.

• In the event of full subscription in the Rights Issue, DanCann Pharma will receive approximately DKK 28.5 million before costs for the Rights Issue.

• The Company may receive an additional approximately DKK 1 – 34,2 million from the warrants issued in the Rights issue.

• The Prospectus in connection with the Rights Issue has been approved and registered by the Danish Financial Supervisory Authority.

Background and motive

DanCann Pharma expects to achieve its commercial breakthrough during the upcoming 12 months. Such achievements will partly be realized through the binding supply agreement, with a commitment of approx. DKK 40 million, that was recently entered into with the German wholesaler WEECO Pharma. The Company also expects, among other things, to introduce new products under the Pilot Programme during H2-2022 and to 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 to 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 Rights Issue the Company will receive a minimum of approximately DKK 21.9 million, before issue related costs. The Company expects that such issue funds, together with the [guaranteed] issued warrants being fully subscribed for, will finance the business until the Company reaches break-even. To reach such expectations, 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

Subscription undertakings, guarantee commitments

Certain existing shareholders including persons in the Board of Directors and management such as Carsten Trads (chairman), Christian Carlsen (vice-chairman), Tue Østergaard (board member), Magnus Dahlmann, Per Wester, Jeppe Krog Rasmussen (Founder, CEO and board member), Louise Conradsen (CEO of CannGros ApS, subsidiary of DanCann Pharma) and Sarah Mai Holm (COO) have all undertaken to subscribe for units in the Rights Issue.

In addition, external guarantors 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.

Terms of the Rights issue

The subscription price in the Rights Issue will be DKK 6 per unit, corresponding to DKK 0.60 per share. The warrants included in the units will be issued without remuneration.

Valuation (pre-money): approximately DKK 17,1 million.

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 and six (6) warrants of series TO 2.

The Rights Issue consist of maximum 47 447 140 shares and maximum 28 468 284 warrants of series TO 2.

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 Companies Registration Office.

One (1) warrant of series TO 2 gives the right to subscribe for one (1) new share in the Company during the subscription period (16 - 31 May 2023) at a subscription price that corresponds to 70 percent of the volume-weighted average of the trading price for the Company's shares before the subscription period (27 April – 11 May 2023). However, the subscription price cannot be below the quota value/nominal value or exceed DKK 1.2 per share.

The Company may receive an additional approximately DKK 1 – 34,2 million from the warrants issued in the Rights issue.

Timetable for the Rights Issue

25 October 2022                                                                            Last day of trading including rights

26 October 2022                                                                            First day of trading excluding rights

27 October 2022                                                                            Record date for the Rights Issue

31 October 2022 - 11 November 2022                                          Subscription period in the Rights Issue

31 October 2022 - 9 November 2022                                            Trading in unit rights

31 October 2022 – around week 47                                              Trading with paid subscribed units

16 November 2022                                                                        Estimated date for publishing the outcome of the Rights Issue

Prospectus

The prospectus in connection with the Rights Issue and has today, on October 21, 2022, been approved and registered by the Danish Financial Supervisory Authority (Dan: Finanstilsynet). The prospectus, containing complete conditions and instructions, is available on the Company's website (www.dancann.com) and Nordic Issuing's website (www.nordic-issuing.se). [The prospectus will also be available on Finanstilsynet’s website (www.finanstilsynet.dk). The subscription form will be available on the Company's and Nordic Issuing's respective websites from and including 31 October 2022.

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 and MAQS Advokatbyrå act as legal advisors to the Company. Nordic Issuing acts as issuing agent.

For additional information about the Rights Issue, please contact:

Corpura Fondkommission AB

E-mail: [email protected]

www.corpura.se

About DanCann Pharma

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:

Jeppe Krog Rasmussen, CEO

E-mail: [email protected]  

Website: www.dancann.com  

This information is such information that DanCann Pharma A/S is obligated to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted, through the agency of the contact person above, for publication on 21 October 2022, 11:30am CEST. Above responsible person can also be contacted for further information.

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

Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events, or developments that the Company believes, expects, or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology.

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.