DanCann Pharma
Danish cannabis company DanCann Pharma has announced plans to enact a reverse stock split aimed at ‘stabilising the trading of the company’s shares’.
Earlier this week, DanCann called for an Extraordinary General Meeting so its investors could vote on whether to push through the reduction in share capital, in preparation for the aforementioned stock split.
Like many of its stablemates, DanCann has struggled to see its share price return to levels seen in its inaugural years of trading.
In late August 2022, DanCann’s stock price plummeted 60% on the Swedish Spotlight Stock Market, dropping from DKK 2.5 to DKK 1, after it revealed plans to ‘resolve on a partially guaranteed rights issue’, understood to be only 77% subscribed, netting DKK 28.5m in the process.
Not only were its shares issued at the equivalent of DKK 0.6 per share, a significant discount on its share price even after Wednesday’s sell-off, but DanCann said it had also taken out a DKK 3m loan to ‘secure the company’s liquidity until the conclusion of the right issue’.
While DanCann said the purpose of this rights issue was to secure funding for the final approval of its GMP facility, the unusual activity left many investors questioning why it appeared to be in such desperate need of cash.
Since then the company’s stock price has fallen further, with peaks in July this year failing to return to anywhere near its previous value.
As such, the company is now proposing to reduce its share capital by DKK 13,869,911.106, bringing the new total to DKK 1,541,101.234. This will be achieved by reducing the nominal value of each share from DKK 0.01 to DKK 0.001.
The reduced capital amount will be transferred to a special reserve fund, meaning the capital reduction doesn’t result in money being paid out to shareholders but instead being held in this reserve for the company’s future use. This allows the company more flexibility in its financial operations, as these funds become distributable and can be used for future investments or other purposes.
The company explained: “This reduction, and especially the proposal to reduce the company’s nominal share capital by transferring the amount to a special reserve fund, is intended to facilitate the previously announced reverse stock split, aimed at stabilising the trading of the Company’s shares.”
A reverse stock split typically happens when the share price is low, and the company wants to boost it by reducing the number of shares while increasing their value. By first adjusting the nominal value of shares and then consolidating shares via a reverse split, DanCann can reduce volatility and stabilise the price of its shares on the market.
Allied Corp
Canadian cannabis supplier and Allied Corp, which produces cannabis in Columbia, announced this week that it has released its first GMP-certified product in Switzerland.
Its GMP-certified cannabis flower will now be made available to patients in Switzerland via its local partner PhytoXtract SA.
This milestone follows an April shipment of THC-based cannabis to PhytoXtract, which processed and released the product as a magistral medicinal product, tailored to individual prescriptions, after passing testing to ensure it met European Pharmacopeia standards.
It marks the latest expansion into leading European cannabis markets this year, having exported its GMP product to the UK and Germany earlier in January and April, respectively, among other territories.
In 2022, after Columbia enacted new legislation allowing for the legal export of cannabis flower, Allied became the first company to secure approval and ship its product internationally.
Throughout 2022 it shipped its products to Switzerland the US and Australia, but it wasn’t until May of 2023 that Allied secured a GMP licence and signed its distribution agreement with Zurich-based PhytoXtract.
At the time, its CEO Calum Hughes said: “We are proud to say that our Colombian production has now met vendor qualification approval for several vendors. Given that we are now able to offer GMP products opens many additional commercial relationships and markets.”
This week, following its latest shipment of GMP product, Chief Business Development Officer, Michael Moses, added: “This first GMP product release into Switzerland is a significant milestone, opening doors to additional European markets.
“It is also evidence of Allied’s ability to successfully navigate the complex supply chain from flower cultivation in Colombia to patient consumption in Switzerland. We look forward to deepening our partnership with PhytoXtract and reach more patients across Europe.”
SEED Innovations
Ahead of its Annual General Meeting, cannabis investment firm SEED Innovations published a brief update on its financial position.
In a statement to investors, Non-Executive Chairman Ian Burns said that the company’s market capitalisation of £3m ‘falls below our estimated net asset value (NAV) of approximately £10.8m’ as of August 31 2024.
Furthermore, the company reportedly has around £3.5 in cash as of the same date, and is ‘well positioned to capitalise on the current environment’, which it believes presents numerous opportunities to purchase undervalued assets.
“Despite the challenges in our operating markets, we remain confident in the strength of our portfolio, which features a mix of liquid, pre-liquidity, and longer-term opportunities within disruptive, high-growth life sciences and technology ventures, as well as allowing for more opportunistic, short-term trading strategy.”
The post DanCann Pharma Planning Reverse Stock Split, Allied Corp Exports GMP Product to Swiss Market, & More from SEED appeared first on Business of Cannabis.
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