DanCann Pharma A/S Secures 10-Year Financing Loan-Agreement with 12-months Conversion Option and Warrants
COPENHAGEN, Denmark, 02 June 2023 - DanCann Pharma A/S (SS: DANCAN) (OTCQB: DCPXF) ("DanCann Pharma" or the "Company"), a Danish company powered by cannabinoids, hereby announce that the Company has secured a financing agreement with Nordic Growth Opportunities 2 (the “Investor”), according to which the Company will receive up to DKK 18.9 million over the next 12 months and potentially additional proceeds if warrants are exercised by the Investor. The agreement is a 10-year financing loan agreement with 12 months conversion option and including warrants. The agreement is furthermore subject to customary conditions precedent, and the issuance of the agreement is subject to the board of directors obtaining authorization to carry out such issue on an extraordinary general meeting to be held during June 2023.
The Company has entered into the financing agreement to secure funding to provide the Company with operation funds for another 12 months, as a supplement to the outcome of the TO2’s.
Jeppe Krog Rasmussen, CEO of DanCann Pharma, comments:
“As previously communicated, we have been working on a parallel agreement alongside our TO2 to facilitate their scaling. We have successfully achieved this goal. The agreement entails a 10-year loan period, with an option for conversion within the initial 12 months. The company anticipates minimal liquidity constraints based on these favorable long-term prospects, with reasonable interest rates if conversion does not occur.”
Main terms and conditions
The loan spans over a period of 10 years, with a cumulative total interest rate of 15% in the absence of any conversion during the period. The financing shall take place over a period of 12 months. Provided that the board of directors is granted the authorization to issue financial instrument on the extraordinary general meeting, the board of directors will thereafter issue loan notes for up to the total commitment of DKK 18.9 million plus warrants (see below), with the possibility to convert during the first 12 months from the disbursement of each tranche. Simultaneously, the Investor will disburse the first tranche of DKK 6.6 million to the Company thereby funding approx. 1/3 of the loan notes. The two remaining tranches of DKK 6 million and DKK 6.3 million, respectively, will be disbursed (thereby funding the remaining loan notes) during a period of 12 months thereafter upon the Company’s request, however subject to customary conditions precedent. The first two tranches, amounting to DKK 12.6 million, do not depends on market conditions, while the final tranche of DKK 6.3 million is conditional upon certain milestones related to trading and volume in the stock. The Investor is entitled to convert the loans under the agreement, when disbursed (funded) and in a period of 12 months thereafter, to shares in the Company at a conversion price equal to 93% of the lowest simple average of three consecutive daily volume weighted average share price (“VWAP”) of the 10 consecutive trading days immediately preceding the date on which the conversion is requested.
The warrants, which are issued simultaneously with the loan notes, shall entitle the Investor to subscribe for a number of shares equivalent to 14.3% of the total commitment of DKK 18.9 million divided by the exercise price. The exercise price for each warrant (entitling the Investor to subscribe for one share) is the lower of (i) DKK 0.62 and (ii) 130% of the lowest simple average of three consecutive Daily VWAPs over the ten (10) trading days’ period immediately preceding the issue of the first tranche (however in connection with the disbursement of each tranche under the loan notes, the exercise price shall be adjusted to 130% of the lowest simple average of three consecutive Daily VWAPs over the ten (10) trading days’ period immediately preceding the request of the tranche, applicable to any unexercised warrants. The warrants are exercisable in a period of 36 months as from the issue date.
Share lending
The Company’s shareholder Xignotus Capital ApS, has made 3,500,000 shares available free of charge under a share lending agreement entered into with the Investor, to facilitate the financing agreement and reduce costs for the Company. The Investor will return the shares to Xignotus Capital ApS at the latest on the date of expiry of the period during which the loan notes can be converted into shares.
The estimated net costs for the Company are approx. 4.7% of the total commitment of DKK 18.9 million.
Shareholders’ authorization
Issuance of the loan notes and warrants as set out in the financing agreement will require an authorization from the shareholders of the Company resolved at the an extraordinary general meeting to be convened during June 2023.
About Nordic Growth Opportunities 2
Nordic Growth Opportunities 2 (“NGO2”) is an investment vehicle managed by a European family office. NGO2 invests via alternative credit solutions for publicly listed companies via private placements. NGO2 focuses on high growth sectors with significant upside potential.
About DanCann Pharma A/S
DanCann Pharma A/S (SS: DANCAN) (OTCQB: DCPXF) was founded in 2018 and is a Danish biopharmaceutical Company powered by cannabinoids. DanCann Pharma is a licensed production and distribution Company.
The Company focuses on discovering, developing, manufacturing, and commercializing new therapeutic cannabinoids in a wide range of disease areas.
DanCann Pharma is EU-GMP-approved by the Danish Medicines Agency under the Danish Pilot Programme for medical cannabis, and have, among other things, license for manufacturing, export, import and distribution. The DanCann Pharma group also owns the subsidiary CannGros ApS, which is the market leader in Denmark with the import and distribution of the products Bedrocan®, Bedica® and Bediol® to all the Danish pharmacies.
DanCann Pharma A/S (SS: DANCAN) is listed on the Spotlight Stock Market in Copenhagen/Stockholm and side listed on OTCQB Venture Market in USA (OTCQB: DCPXF).
For more information, visit: www.dancann.com
For further information, please contact:
Jeppe Krog Rasmussen, CEO
Phone: +45 2963 6920
E-mail: [email protected]
Forward-looking-statement:
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.
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 02-06-2023.
