TIDMANA
9 March 2023
ANANDA DEVELOPMENTS PLC
("Ananda" or the "Company")
Proposed Acquisition of MRX Medical, Subscription to raise £326,200, Board
Changes and Issue of Equity
Ananda announces the Company has agreed to acquire MRX Global Ltd ("MRX
Global") and its subsidiary, MRX Medical Ltd ("MRX") (the "Acquisition").
MRX has invented a proprietary method to formulate cannabis medicines, the
first of which, MRX1, is to be used in two Phase II Randomised Controlled
Trials (RCTs) to investigate the effectiveness of cannabidiol (CBD) in
chemotherapy induced peripheral neuropathy (CIPN) and in patients with
endometriosis. MRX's cannabidiol formulations meet the requirements set out by
the National Institute for Health and Care Excellence (NICE)for research into
the effectiveness of CBD with no or trace tetrahydrocannabinol (THC). MRX1 and
MRX2, MRX's second formulation, will also be launched as unlicensed CBPM's
(Cannabis Based Products for Medicinal use) in the coming months.
The clinical trials have received combined commitments of £1.55m in external
grant funding and will be carried out by leading investigators at the
University of Edinburgh.
Ananda also announces that it has raised £326,200 (before expenses) through a
subscription (the "Subscription") of 108,733,327 ordinary shares of 0.2p each
in the Company ("Ordinary Shares"; "Subscription Shares") and is issuing a
further 747,264,000 Ordinary Shares pursuant to the conversion of loan notes.
Subject to completion of the acquisition, Professor Clive Page and Jeremy
Sturgess-Smith are being appointed as Directors of Ananda.
Ananda's CEO, Melissa Sturgess commented: "UK regulators and prescribers have
made it clear that evidence for cannabis-based medicines is required to enable
them to be prescribed on the NHS. We believe that the acquisition of MRX gives
Ananda the opportunity to provide that evidence. MRX also has the potential to
deliver near-term revenues for Ananda, through the sale of MRX's formulations,
which are ready for launch as unlicenced CBPMs. Our ambition, over time, is to
manufacture MRX's oils from flower grown at our own facility in Lincolnshire
and we continue work to make that happen."
Highlights
* The acquisition of MRX will immediately bring novel formulations of medical
cannabis oils to Ananda's offering, to complement its existing medical
cannabis flower cultivation strategy.
* MRX's first formulation, MRX1, will be used in two Phase II RCTs being
conducted by leading researchers at the University of Edinburgh.
* Commitments of £1.55 million of grant funding to conduct the trials.
* It has been requested that MRX1 be made available for commercial supply on
the NHS if the trials are successful.
* MRX is planning to launch MRX1 and MRX2 as unlicenced medicines.
* Commitments received for a Subscription at 0.3p to raise £326,200 (before
expenses).
* Broker option to raise a further £100,000 is available to current
shareholders who would like to participate in this capital raising.
* The proposed appointment to the Board of Ananda of Professor Clive Page,
Professor of Pharmacology at King's College, London and Jeremy
Sturgess-Smith, Head of Corporate for Ananda.
* Certain loan notes issued to Charles Morgan, Chairman of the Company, in
2022, are being converted.
* A circular convening a General Meeting to approve the Acquisition is being
sent to shareholders in the Company today.
Information about MRX
MRX is a company which owns the rights to Intellectual Property with regards to
the formulation of cannabis medicines.
MRX was initially established to formulate cannabidiol (CBD) oils for sale as
food supplements. Whilst it proved difficult to scale the food supplement
business commercially, the extensive research involved in developing the CBD
formulations was found to be applicable to medical cannabis due to the
replicability of the oils produced by MRX.
Specifically, MRX has invented a proprietary method to formulate cannabis
medicines which can be used in RCTs into the medical effectiveness of cannabis.
MRX's first formulation, MRX1, is being provided to two Phase II RCTs being
conducted by the University of Edinburgh for CIPN and endometriosis to be
funded externally through £1.55m of combined grants.
MRX will have access to the data produced from the two trials, which the
Directors believe are among a very limited number of placebo-controlled Phase
II medical cannabis RCTs to be conducted in the UK, apart from those conducted
by GW Research (now part of Jazz).
If the RCTs produce successful outcomes, the Directors believe that there is
potential for MRX1 to be made available as a CBPM via the NHS.
Moreover, MRX's proprietary methodology is able to formulate cannabis medicines
which are essentially THC free. Such THC-free medicines are therefore suitable
for use in the CBD research requested by NICE. The Directors believe that this
is particularly important, as research is increasingly indicating that THC is
not a necessary part of all medical cannabis therapeutics. THC-free medicines
will also address concerns expressed by specialist prescribers and medical
health bodies (e.g., the British Paediatric Neurology Association) who are
concerned about negative side effects of THC.
MRX can produce CBPMs which are consistent from batch to batch, a key
requirement to become a licensed medicine, using pharmaceutical ingredients and
processes which meet the Good Manufacturing Practice (GMP) manufacturing
requirements of the Medicines and Healthcare products Regulatory Agency (MHRA).
The Directors believe that MRX's proprietary formulations for medical cannabis
oils will strongly complement the flower-based medicines that Ananda is
developing with its subsidiary, DJT Plants Limited ("DJT"), as most patients
receiving cannabis-based medicines are prescribed a combination of flower and
oil. The Directors anticipate, in the future, being able to provide the raw
materials for MRX's medicines from DJT's cannabis cultivation facility in
Lincolnshire.
MRX's products are already capable of being supplied to specialist pharmacies
as unlicensed CBPMs, potentially generating near-term revenues for Ananda,
whilst it continues to work towards commercial medical cannabis flower
production at DJT.
The Directors therefore believe that the Acquisition of MRX represents an
excellent and complementary opportunity to strengthen Ananda's position in the
medical cannabis market and provides strong potential upside for Ananda's
shareholders.
Further information about Ananda and MRX is set out in a presentation which is
available in the Company Documents section of Ananda's website at
www.anandadevelopments.com/publications.
Terms of the Acquisition
Ananda has agreed to acquire 100% of the issued share capital of MRX Global for
a consideration of £2,021,520. The consideration will be satisfied by the issue
of 673,840,000 new Ordinary Shares (the "Consideration Shares") to the vendors
of MRX Global (the "Vendors") at a price of 0.3p per share.
The Vendors comprise Charles Morgan, Chairman of Ananda, Melissa Sturgess,
Chief Executive of Ananda, Dr Inbar Pomeranchik, a Non-executive Director of
Ananda, Jeremy Sturgess-Smith, who is being appointed as a Director of Ananda
and is the son of Melissa Sturgess (the "Related Party Vendors") and Professor
Clive Page, who is also being appointed as a Director of Ananda. Both Jeremy
and Clive will join the Board only if the Acquisition is approved at the
General Meeting.
The Related Party Vendors will receive Consideration Shares as follows:
Related Party Vendor Number of Consideration Shares
Charles Morgan 180,549,333
Melissa Sturgess 199,957,333
Inbar Pomeranchik 26,666,667
Jeremy Sturgess-Smith 105,200,010
The agreement for the Acquisition provides that the existing royalty agreement
(the "Royalty Agreement") between MRX Global and certain of the Vendors, namely
Charles Morgan, Melissa Sturgess and Jeremy Sturgess-Smith, should be retained.
Under the Royalty Agreement, the above-named Vendors are entitled to
collectively receive a royalty on all products sold by MRX Global or its
subsidiaries, in perpetuity. The royalty is equivalent to 3% of net sales.
The agreement also contains warranties concerning MRX Global and MRX for the
benefit of Ananda. These include confirmation that there are no outstanding
liabilities other than those disclosed and also grant Ananda the right to buy
back some or all of the Consideration Shares, for nominal consideration, in the
event of a claim for breach of the warranties and tax indemnities given by the
Vendors.
The Acquisition (including the Royalty Agreement) is a Related Party
transaction for the purposes of the AQSE Growth Market Access Rulebook. The
Directors of the Company who are independent of the Related Party Vendors,
namely John Treacy and Stuart Piccaver, having exercised reasonable care, skill
and diligence, consider that the Acquisition is fair and reasonable as far as
the shareholders of Ananda are concerned.
Circular and Notice of General Meeting
The Acquisition requires the approval of shareholders as it is a substantial
property transaction for the purposes of section 190 of the Companies Act 2006.
Accordingly, a circular convening a general meeting of the Company (the
"General Meeting") to approve the Acquisition, the allotment of the
Consideration Shares and the potential buy back of Consideration Shares, is
being posted to shareholders shortly.
Ananda has decided that, because the Acquisition is a Related Party
transaction, it should be subject to approval by shareholders who are
independent of the Vendors.
As Related Party Vendors, Charles Morgan, Melissa Sturgess and Jeremy
Sturgess-Smith have therefore agreed not to vote the Ordinary Shares held by
them at the General Meeting. Certain other shareholders holding 436,720,000
Ordinary Shares in aggregate, representing 52.53 per cent of the Ordinary
Shares otherwise eligible to vote at the General Meeting, have irrevocably
undertaken to vote in favour of the resolutions required to approve the
Acquisition.
The Subscription
Ananda has raised gross proceeds of £326,200 through a Subscription of
108,733,327 new Ordinary Shares at a price of 0.3p per share.
The net proceeds of the Subscription will be used to fund the operations of MRX
and DJT, and for general working capital purposes.
Broker Option
To provide existing shareholders who did not participate in the Subscription
with the opportunity to do so, the Company has granted an option (the "Broker
Option") to Peterhouse Capital Limited ("Peterhouse"), to subscribe for an
additional 33,333,333 new Ordinary Shares (the "Broker Option Shares") on the
same terms as the Subscription, exercisable before 5:00pm on 16 March 2023.
Depending on demand, the number of Broker Option Shares subject to the Broker
Option may be increased at the discretion of the Company with the written
agreement of Peterhouse. As far as is practical, participation in the Broker
Option will be prioritised for shareholders (direct or indirect) on the
register at the close of business on 10 March 2023 ("Existing Shareholders").
If the Broker Option is fully taken up, it will raise an additional £0.1
million before expenses. If the Broker Option is not fully subscribed by 5:00pm
on 16 March 2023, orders from eligible investors will be satisfied in full, and
the balance of the Broker Option shall lapse. Interested investors are asked to
contact Duncan Vasey or Lucy Williams at Peterhouse (contact details at the
bottom of this announcement) for more information.
New Ananda Directors
In connection with the Acquisition, the Company is proposing to appoint two new
Directors to the Board: Professor Clive Page, who is being appointed as a
Non-executive Director, and Jeremy Sturgess-Smith, who is joining the Board as
an Executive Director. Both Jeremy and Clive will join the Board only if the
acquisition is approved by the Independent Shareholders.
Clive is a Professor of Pharmacology at King's College London, and Director of
the Sackler Institute of Pulmonary Pharmacology. Clive's main research
interests are in the pharmacology of inflammation and respiratory diseases, and
he has published over 250 scientific papers. Clive was the 2006 co-founder and
previous Chairman of AIM quoted Verona Pharma plc, which is now capitalized at
more than $1 billion and quoted on NASDAQ.
Jeremy is responsible for Ananda's corporate finance and investor relations and
is a committee member of the Prescription Working Group of the Cannabis
Industry Council. Jeremy is also a director of MRX Global and MRX Medical, and
the Chief Operating Officer of Standard Listed URA Holdings plc.
Conversion of Loan Notes
On 19 December 2022, shareholders approved the issue of £2,241,792 in nominal
value of 10% unsecured convertible loan notes (the "2022 CLNs") and warrants to
subscribe for 574,084,000 Ordinary Shares to Charles Morgan, in settlement of
an outstanding secured loan of £2,241,792 from Mr Morgan to the Company.
Mr Morgan has today converted all of the 2022 CLNs at a price of 0.3p per
share, resulting in the issue to him of 747,264,000 new Ordinary Shares in
aggregate (the "CLN Shares").
Concert Party
Following the issue of the CLN Shares and the Subscription Shares, the issued
ordinary share capital of the Company will comprise 2,026,551,899 Ordinary
Shares (the "Enlarged Issued Share Capital"), and the Concert Party (as defined
in the circular to Ananda shareholders dated 24 November 2022) will be
interested in 1,105,996,485 Ordinary Shares in aggregate, representing 54.58
per cent of the Enlarged Issued Share Capital.
Charles Morgan and Melissa Sturgess (who are members of the Concert Party) are
husband and wife and therefore regarded as a single shareholder for the
purposes of the City Code on Takeovers and Mergers (the "Code"). Following the
issue of the CLN Shares and the Subscription, Charles Morgan and Melissa
Sturgess will together be interested in 1,089,660,348 Ordinary Shares,
representing 53.77 per cent of the Enlarged Issued Share Capital.
For so long as Charles Morgan and Melissa Sturgess together hold shares
carrying more than 50 per cent of the Company's voting share capital, they may,
whether or not the Concert Party still exists, increase their interest in the
Ordinary Shares in the Company without incurring any obligation under Rule 9 of
the Code to make a general offer for the remaining shares.
For so long as the Concert Party holds shares carrying more than 50 per cent of
the Company's voting share capital and its members continue to be acting in
concert, those members may increase their aggregate interests in the Ordinary
Shares in the Company without incurring any obligation under Rule 9 of the Code
to make a general offer for the remaining shares, although individual members
of the Concert Party, other than Charles Morgan and Melissa Sturgess, will not
be able to increase their percentage interest in the Ordinary Shares of the
Company through, or between, a Rule 9 threshold without the consent of the
Panel on Takeovers and Mergers.
Application for Admission
Application will be made for the CLN Shares and the Subscription Shares to be
admitted to trading on the Access segment of the AQSE Growth Market. It is
expected that admission will become effective on 15 March 2023.
The CLN Shares and the Subscription Shares will, on admission, rank pari passu
in all respects with the Ordinary Shares in issue and will rank in full for all
dividends and other distributions hereafter declared, paid or made on the
ordinary share capital of the Company.
Application will also be made for any Broker Option Shares issued under the
Broker Option to be admitted to trading on the Access segment of the AQSE
Growth Market, after the closing of the Broker Option.
Total Voting Rights
Following the issue of the CLN Shares and the Subscription Shares, the Company
will have 2,026,551,899 Ordinary Shares in issue, each share carrying the right
to one vote.
This figure of 2,026,551,899 Ordinary Shares may be used by shareholders in the
Company as the denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their interest
in, the share capital of the Company under the FCA's Disclosure and
Transparency Rules.
-Ends-
The Directors of the Company accept responsibility for the contents of this
announcement.
ANANDA DEVELOPMENTS PLC +44 (0)7463 686 497
ir@anandadevelopments.com
Chief Executive Officer
Melissa Sturgess
Investor Relations
Jeremy Sturgess-Smith
PETERHOUSE CAPITAL LIMTED +44 (0)20 7469 0930
Corporate Finance
Mark Anwyl
Corporate Broking
Lucy Williams
Duncan Vasey
Save as set out below, there is no further information regarding Clive Page or
Jeremy Sturgess-Smith that is required to be disclosed pursuant to Rule 4.9 of
the AQSE Growth Market Access Rulebook.
Clive Page
Current Directorships Past Directorships
EpiEndo Pharmaceuticals Babraham Research Campus Limited
Gryon Consulting Limited The Barbraham Research Institute
The Cough and Cold Company Limited Revolo Biotherapeutics Limited
Prep Biopharma (formerly Immune Regulation Limited)
Jeremy Sturgess-Smith
Current Directorships Past Directorships
MRX Global Limited URA Holdings plc
MRX Medical Limited
About Ananda Developments plc
Ananda is an AQSE-listed medical cannabis company creating UK-based operations
to grow and provide carbon zero, consistent, medical cannabis for the UK and
international markets.
For more information, please visit: https://anandadevelopments.com
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information. Upon the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to be
in the public domain.
Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them.
1 Details of the person discharging managerial responsibilities / person
closely associated
a) Name Charles Morgan
2 Reason for the notification
a) Position/ Chairman
status
b) Initial Initial
notification /
Amendment
3 Details of the issuer, emission allowance market participant, auction
platform, auctioneer, or auction monitor
a) Name Ananda Developments plc
b) LEI 894500DFM8VOC5FW4X47
4 Details of the transaction(s): section to be repeated for (i) each type of
instrument; (ii) each type of transaction; (iii) each date; and (iv) each
place where transactions have been conducted
a) Description of
the financial Ordinary Shares of 0.2p each
instrument,
type of ISIN: GB00BDQPXQ60
instrument
Identification
code
b) Nature of the Conversion of 2022 CLNs
transaction
c) Price(s) and 747,264,000 Ordinary Shares for nil consideration
volume(s)
d) Aggregated N/A
information
- Aggregated
volume
- Price
e) Date of the 9 March 2023
transaction
f) Place of the N/A
transaction
END
(END) Dow Jones Newswires
March 09, 2023 02:01 ET (07:01 GMT)
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