Rights Issue 2022

DanCann Pharma A/S 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.

for operation cost
for further development
for repayment

Background + 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 Company intends to mainly use the net proceed from the Rights Issue in the manner presented below:

· Operation cost: approx. 55%
· Finalizing the EU-GMP process
· Finalizing the develompent of the inhouse product portfolio
· Further development of the product portfolio: approx. 20%
· Repayment of loan: approx. 25%

The Offer in Summary

Offer & issue volume:
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. In the event of full subscription in the Rights Issue, DanCann Pharma will receive approximately DKK 28.5 million before issue costs.

Subscription rights:
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, six (6) warrants of series TO  2.

Subscription price:
The subscription price in the Rights Issue amounts to DKK 0.60 per share.

Enterprise value:
The enterprise value of DanCann Pharma (pre-money) is approximately DKK 17,1 million.

Subscription period:
The subscription period in the Rights Issue runs from October 31 to November 11, 2022.

Trading with units rights & BTU:
Trading with unit rights will take place on the Spotlight Stock Market during the period 31 October to 9 November 2022. Trading in BTU (paid subscribed units) will take place on the Spotlight Stock Market from 31 October 2022 until the Rights Issue is registered with the Danish Companies Registration Office, something that is expected to take place end of November 2022.

Underwriting obligations and underwriting guarantees:
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 made up of pre-subscription commitments and approximately DKK 19.6 million are made up of guarantee commitments.