AfriAg Global Plc - Conditional investment in medicinal cannabis company
London, May 15
16 May 2019
AfriAg Global PLC
(‘AfriAg’ or the ‘Company’)
Conditional staged investment into Jamaican focused medicinal cannabis pharmaceutical company
AfriAg Global PLC, a company whose shares are admitted to trading on London’s NEX Exchange, is pleased to announce it has entered into a conditional subscription agreement to subscribe for shares in Apollon Formularies Ltd (“Apollon”).
Background to the investment
The Company has agreed with Apollon a UK incorporated company, to: (1) subscribe for 1.2 million shares in Apollon at a price per share of £0.25 representing approximately 0.71 per cent. of Apollon’s issued share capital for an aggregate investment amount of £300,000; and (2) subscribe for 2.8 million shares at a price per share of £0.25 representing approximately 1.63 per cent. of Apollon’s issued share capital for an aggregate investment amount of £700,000, which investment is subject to receiving shareholder approval at the General Meeting (the “Investments”).
Pursuant to the Investments the Company would need to raise approximately £1m to subscribe for a total of 4.0 million shares in Apollon, representing circa 2.325 per cent. of Apollon’s issued share capital. The Company is considering all options in relation to the fundraise.
It should be noted that the par value of the Company’s ordinary shares are 0.1 pence per share.
The Company is in discussions with the shareholders of Apollon to be granted right of first refusal to acquire all the issued and outstanding shares owned by those shareholders in consideration for the issue and allotment to those shareholders of new ordinary shares in the capital of the Company at a price of 0.1 pence per new ordinary share (“Right of First Refusal”) which values the transaction at circa £40,000,000.
Following exercise of the Right of First Refusal, which will be subject to approvals from (as applicable) (1) all the necessary government authorities, including the cannabis licencing authority (in Jamaica); (2) regulatory authorities; (3) approvals from the Company’s shareholders; and (4) approvals from the shareholders of Apollon, the existing shareholders of Apollon will hold circa 93.54 per cent. of the issued share capital of the Company. Following completion of the Investments and should the Company exercise the Right of First Refusal, the resulting enlarged group will be a vertically integrated medicinal cannabis group with operations in Jamaica and with plans to expand elsewhere throughout the world.
A circular to shareholders in the Company is expected to be published shortly (“Circular”). The Circular and notice of a general meeting of the Company to be held on 14 June 2019 (“General Meeting”) to, inter alia, pass the resolutions required to authorise the directors of the Company to be able to issue and allot ordinary shares in order to fund the Company’s ability to complete the Investments, is expected to be published shortly. Following its publication the Circular will be available on the Company’s website at https://www.afriagglobal.com/.
David Lenigas, Executive Chairman of AfriAg Global PLC, commented;
“AfriAg is one of the very few companies in the UK and indeed Europe that is capable of doing a transaction of this type in the legal medicinal cannabis sector. Once the Right of First Refusal is agreed and exercised we will be the first listed company in the UK to be a fully integrated medical cannabis pharmaceutical company. The first £300,000 proposed investment in to Apollon will be targeted towards opening Apollon’s first revenue generation businesses at Doc’s Place Wellness Center and Apollon’s first dispensary and processing facility in Negril, Jamaica and will secure the option to acquire 660 acres of prime agricultural land for future cultivation expansion. I therefore urge shareholders to read this document carefully.
Subject to the Right of First Refusal being agreed and entered into, the exercise of the Right of First Refusal may constitute a reverse takeover under Rule 57 of the NEX Rules.”
Business overview of Apollon and its assets
Apollon, an international medicinal cannabis pharmaceutical company, principally conducts business through Apollon Formularies Jamaica Limited (“AFJ”), which is a government licensed medicinal cannabis company located in Jamaica. Apollon, both directly and through its subsidiaries and affiliates such as AFJ, has developed a suite of proprietary, trade secret, medical cannabis strains, technology, pharmaceutical products and therapeutic applications and AFJ is licensed and approved to cultivate, process, manufacture, perform research and develop, sell and distribute within the legalized hemp and medical cannabis industry in Jamaica.
AFJ is licensed and approved to operate on the national (Federal) level in Jamaica via the following licenses and approvals: Retail (Therapeutic) License, Processing License, and Cultivation Conditional Approval pending final inspection of the cultivation facility all issued by the Cannabis Licensing Authority (CLA). AFJ has also received an approval Order for Cultivation and Clinical Trials. Together, these licenses and approvals allow for the cultivation, processing, manufacture, research and development, and retail sales of medical cannabis pharmaceuticals in Jamaica and, export internationally when the forthcoming regulations are finalized by the Jamaican government which is expected in the near future. It is expected that these regulations will allow legal export from CLA Licensed companies in Jamaica to any country where Apollon has purchase agreements and the laws of that country allow import of medical cannabis pharmaceutical products.
Along with patient care and its research and development programme, Apollon, both directly and through subsidiaries and affiliates such as AFJ, has created and obtained proprietary hybrid medical cannabis pharmaceutical strains, technology, formulations, and treatment products. Many of these formulations were created using Apollon’s proprietary artificial intelligence techniques and include:
Apollon CANCER™(APM™) – High Times Cannabis Cup 1st Place Winner.
The patient treatment side of AFJ’s business is accomplished through physician managed clinical treatment wellness resorts and retail locations within Jamaica. In particular, AFJ has an arrangement with Doc’s Place International, Inc. (“Doc’s Place”), which operates the Global Centre of Excellence for Medical Cannabis Therapy in Negril, Jamaica. Doc’s Place is an in-patient and out-patient medical cannabis wellness resort, which is used by international and Jamaican patients needing access to licensed physicians with specific expertise in medical cannabis treatment and to be prescribed medical cannabis products as has been legalised in Jamaica since April, 2015. This wellness centre is located in Negril, on the western side of Jamaica and currently has 5 in-patient treatment rooms and additional accommodations for circa 100 out-patients, with plans to expand to an 80 to 100 room in-patient treatment resort with additional accommodations for circa 500 out-patients via the purchase or rental of a second ocean front wellness resort. Any licensed physician in Jamaica, including the physicians working at Doc’s Place, can write prescriptions for AFJ’s medical cannabis pharmaceuticals.
The current research-driven areas of AFJ are focused upon the following:
Physician supervised clinical trials for patient outcomes validation,
Accurately determined appropriate disease and patient specific formulations created using Apollon’s State-of-the-Art proprietary artificial intelligence techniques,
Quality dose controlled medical cannabis oil production,
Quality controlled legal growth of medical cannabis strains,
Extraction methodology, distillation, cannabinoid isolation, purification and pharmaceutical manufacturing.
Consistent dosing globally and legally through Apollon’s delivery systems including one of the world’s first medical cannabis 3D printer capable of precise manufacturing of Apollon’s dose – controlled pharmaceutical formulations internationally , and
Global brand recognition per a consolidated strategy combined with proprietary medical cannabis strains and products.
AFJ’s business objectives include the following items being accomplished in the near future:
Produce commercial volumes of high-grade, full-strength medical cannabis oil that will be processed at its large scale federally legal processing facility. This facility has State-of-the-Art laboratory extraction equipment with a current capacity of producing approximately 15,000 grams of the highest quality medical cannabis oil per day for retail sales in Jamaica and export to all countries where legal import is allowed. Medical cannabis oil is the primary ingredient for medical cannabis based pharmaceuticals, nutraceuticals, cosmeceuticals, foods and beverages.
Initially cultivate Apollon medical cannabis strains in its current greenhouse facility and expand to a 660 acre farm to be acquired or leased. The Company understands this will allow AFJ to grow approximately 1600 pounds of medical cannabis flower per acre per year.As an additional source of revenue, AFJ has established a medical cannabis collective pursuant to which it intends to allow local Jamaican farmers and other international companies to lease portions of its farm to grow medical cannabis strains on a cost plus 20% basis grown through Apollon’s farming infrastructure and utilizing AFJ’s licences.
Own and operate multiple medical wellness resorts, Doc’s Place facilities, and retail locations throughout Jamaica offering Apollon’s clinical trial tested, pharmaceutical products as produced by AFJ including award-winning Apollon Cancer™ used to treat cancer patients.
Establish and maintain a global market position.
Apollon Formularies Jamaica, Limited
Apollon holds an indirect 49% interest in the issued share capital of AFJ, a limited corporation existing under the laws of Jamaica, through an arrangement with Dr. Stephen D. Barnhill and is entitled to 95% of the net profit of the business of AFJ. Apollon has entered into an agreement with Dr Barnhill pursuant to which Dr Barnhill has agreed to assign his 49% interest (the maximum allowed under Jamaican law) of the stock in AFJ to Apollon immediately on approval of the assignment by the Cannabis Licensing Authority (CLA). In addition to such interests and rights as described above, AFJ currently has several asset purchase agreements and strategic partnerships in place to fulfil the mission of creating an all-encompassing, worldwide medical cannabis corporation that can satisfy the growing global market for legal, medical cannabis pharmaceuticals.
Doc’s Place International, Inc.
Apollon has an exclusive right to acquire 90% of the stock of Doc’s Place, a corporation organized and existing in the State of Georgia, USA, which includes its Wellness Center, the Global Centre of Excellence for Medical Cannabis Therapy located in Negril, Jamaica. In addition to such interest and right, there exists a leasing arrangement between AFJ and Doc’s Place for AFJ to be the exclusive cannabis retail location and treatment operation located on the premises.
CBev Ventures, Inc.
Apollon also has an exclusive right to purchase the assets of CBev Ventures, Inc., a corporation organized and existing in the State of Georgia, USA (“CBev”), a beverage company that develops, markets, distributes and sells functional and craft beverages in the legal hemp and medical cannabis industry.
Roxy Industries Ltd.
Following the acquisition of CBev, Apollon will hold through CBev an exclusive right to purchase the assets of Roxy Industries Ltd., a Jamaican company that bottles, cans, and packages beverages for its customers.
Proposed Transaction Overview:
The Company to subscribe for 1.2 million shares in Apollon at £0.25 per share representing 0.71 per cent. of Apollon’s issued share capital for an aggregate investment amount of £300,000, conditional on being able to raise the required funding;
The Company to subscribe for a further 2.8 million shares in Apollon at a £0.25 per share representing 1.63 per cent. of Apollon issued share capital for an aggregate investment amount of £700,000, conditional upon the resolutions at the General Meeting being passed and being able to raise the required funding;
· The Company is in discussions with the shareholders of Apollon to be granted the Right of First Refusal to acquire all the issued and outstanding shares owned by those shareholder in consideration for the issue and allotment to those shareholders of new ordinary shares in the capital of the Company at a price of 0.1 pence per new ordinary share which values the transaction at circa £40,000,000. Following exercise of the Right of First Refusal, which will be subject to all the necessary regulatory and shareholder approvals, the existing shareholders of Apollon will hold circa 93.54 per cent. of the issued share capital of the Company.
Subject to the Right of First Refusal being exercised:
The Company may add senior Apollon officials and representatives to the board of the Company.
The Company constitute a board of advisors, which will comprise of certain members of the Company’s management along with other scientists, physicians and business executives including Dr. Anthony Hall, a US Board Certified Neurosurgeon with special expertise in medical cannabis pharmaceuticals, to join as Chief Medical Officer of the Company
Key Apollon Individuals
About Dr. Stephen Barnhill (Proposed Chairman and Managing Director of the Company, subject to the Right of First Refusal being exercised)
Dr. Stephen D. Barnhill is a physician, Fellowship trained in Laboratory Medicine and Board Certified by the American Board of Bioanalysis. Dr. Barnhill is currently Chairman and CEO of Doc’s Place International, Inc., the first Global Centre of Excellence for Medical Cannabis Therapy in Negril, Jamaica, as well as, Chairman and CEO Apollon Formularies, Inc., a U.S. affiliate of Apollon Formularies Jamaica, Limited to which he also serves as President and Board Member.
Dr. Barnhill has been a founder, Chairman and CEO of both private and public companies. He was most recently founder, Chairman and CEO of a U.S. publicly traded international biotech company, which he took from inception to profitability. In addition, he was founder, Chairman and CEO of BCL laboratories, LLC with operations in south-eastern U.S. which was acquired by Corning–MetPath, now Quest Diagnostics, the largest clinical laboratory in the world. Dr. Barnhill served as a Medical Director for Quest Diagnostics for approximately 5 years after the acquisition. Dr. Barnhill was also founder, Chairman and CEO of National Medical Specialty Labs, which was acquired by Horus Therapeutics Inc., a New York based pharmaceutical company. Dr. Barnhill served as President of Horus Therapeutics for several years after the acquisition. Dr. Barnhill is a pioneer in artificial intelligence machine learning (pattern recognition algorithms) and an inventor on more than 40 patents including neural networks and support vector machines (“SVM”) including the Hallmark SVM-RFE technique now cited by more than 10,000 publications. His patents were part of the intellectual property portfolio that won 1st Place out of 1600 publicly traded companies and was awarded the MICO award from MDB Capital for the most disruptive intellectual property portfolio. Dr. Barnhill’s neural network patents were acquired by Johnson & Johnson. He is also an inventor on patents related to laboratory developed tests and tumour markers. His work includes expertise in the clinical laboratory involving clinical chemistry, haematology, microbiology, blood banking, toxicology and immunology, as well as diagnostic test development relating to cancers of the prostate, pancreas, breast and ovary, cytogenetics, flow cytometry, FISH and imaging in digital mammography, and funduscopic analysis of macular degeneration (AMD). He was part of the team that launched the first iPhone app using SVM for melanoma detection. Dr. Barnhill has negotiated and executed deals with many companies, including Pfizer, Corning-Metpath, Quest Diagnostics, Clarient (now GE Healthcare), LabCorp, NeoGenomics, Abbot, Bruker and others. He has published many peer reviewed papers with academics including those from MD Anderson Cancer Centre, Johns Hopkins University Medical Centre, Stanford University Medical Centre and others. He is a frequently invited speaker to medical conferences in the US and internationally. He has raised millions of dollars in start-up and ongoing financing for both private and public companies.
Dr. Barnhill is or has been a Member or Fellow of the American College of Physician Inventors, the American College of International Physicians, the American Medical Association, the American College of Physician Executives, the American Association of Artificial Intelligence, the American College of Managed Care Medicine, the Association of Clinical Scientists, the American Society of Contemporary Medicine and Surgery, the American Society of Law, Medicine and Ethics, the Southern Medical Society, the American Federation for Clinical Research, the National Federation of Catholic Physicians and the Society of Cannabis Clinicians.
About Dr. Herb Fritsche
Herb Fritsche, Ph.D. is a world-renowned Clinical Chemist and was Professor of Laboratory Medicine and Chief of the Clinical Chemistry Section at The University of Texas, M.D. Anderson Cancer Centre in Houston, Texas. During his 41 years at M.D. Anderson Cancer Centre, Dr. Fritsche focused his research activities on the development and validation of cancer diagnostics. Dr. Fritsche has participated in the validation and FDA clearance process for every commercial serum tumour marker product currently in use in the United States.
Dr. Fritsche has served as President of the Clinical Ligand Assay Society (CLAS) and on many various national committees for both the CLAS and the American Association for Clinical Chemistry (AACC). He is a Fellow of the National Academy of Clinical Biochemistry and was awarded the National Award for Contributions in Education by the AACC; the Outstanding Clinical Chemist Award by the Texas Section, AACC; a Dean's Excellence Award from the University of Texas Graduate School of Biomedical Science; a Distinguished Scientist Award from the CLAS; the Johnson and Johnson Award for Outstanding Research and Contributions to Clinical Biochemistry from the National Academy of Clinical Biochemistry; the Morton K Schwartz Award for Outstanding Achievements in the field of Cancer Diagnostics from AACC; the Carl Jolliff Award for Lifetime Achievements in Immunology and Immunodiagnostics from the Immunology Division of the AACC; and most recently, the Morton K Schwartz for significant contributions to the development of cancer diagnostics from the New York Metro Division of the AACC. Dr. Fritsche served on the Expert Panel for developing Tumour Marker Practice Guidelines for the American Society of Clinical Oncology (ASCO) from its inception until his retirement, and he currently serves on the Laboratory Practice Guidelines Committee for the National Academy of Clinical Biochemistry. In addition, he serves on the Editorial Board of six international scientific journals. Dr. Fritsche is a consultant/advisor to the National Cancer Institute and for some major international diagnostic companies and biotech start-up companies. Dr. Fritsche has published over 200 peer reviewed scientific papers, invited articles and book chapters. He holds 3 patents. He has lectured extensively for many years at international and national meetings of medical and professional societies, and he is recognized internationally as an expert in the field of clinical chemistry, cancer diagnostics and laboratory medicine.
Notice Regarding Forward-Looking Statements
This announcement includes "forward-looking statements" involving the Company, the other entities referenced in this announcement, and the respective subsidiaries, affiliates and associates of the Company and such other entities (collective, the “Involved Entities”), which include all statements other than statements of historical facts, including, without limitation, those regarding the financial position, business strategy, plans and objectives of management for future operations, and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Involved Entities that could cause the actual results, performance or achievements of the Involved Entities to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the present and future business strategies of the Involved Entities and the environment in which the Involved Entities will operate in the future. These forward-looking statements speak only as of the date of this announcement. The Company, on behalf of itself and each of the Involved Entities, expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in expectations of any Involved Entities with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.
The directors of the Company accept responsibility for the contents of this announcement.
For further information on AfriAg Global please visit the www.afriagglobal.com or please contact;
AfriAg Global Plc:
David Lenigas (Executive Chairman)
+44 (0)20 7440 0640
Peterhouse Capital Limited
+44 (0)20 7469 0930
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