(Alliance News) - FastForward Innovations Ltd on Wednesday said it has conditionally agreed to sell its entire interest in EMMAC Life Sciences Ltd, comprising 6.7 million shares and a GBP750,000 convertible loan note, for GBP5.0 million, ahead of EMMAC being taken over by Curaleaf Holdings Inc.
Shares in the technology and life sciences sector-focused investor were down 9.8% in London on Wednesday at 9.70 pence each.
"As an AIM quoted company, FastForward is unable to participate in the Curaleaf transaction due to regulatory conditions surrounding Curaleaf's involvement in the recreational cannabis market in North America. As a result of the sale FastForward will at no time have an interest in Curaleaf's shares," FastForward said.
It noted the main difference to the Curaleaf deal is that Fastforward will not be able to benefit from deferred consideration, though highlighted it has been able to liquidate its entire investment in one transaction rather than being restricted under lock ins and variations in the market that it would have otherwise faced had it been party to the Curaleaf transaction.
FastForward has agreed that it will sell the 6.7 million shares and GBP750,000 convertible loan it holds in Emmac to an unrelated party for GBP3.3 million plus GBP1.7 million for the convertible loan note.
The company expects to record a profit on the sale of about GBP1.9 million compared to the September 2020 carrying value of the equity and cost price of the convertible loan note, and an overall return of 1.9 times the original investment.
FastForward Chair Ian Burns said: "This is an extremely positive outcome for FastForward and we are delighted to have made a significant return on our original investment in EMMAC, further increasing our confidence in our investment strategy and our ability to deliver financial gains, particularly in the medical cannabis, cannabinoid wellness and life sciences sectors.
"The current legal and regulatory framework within which we work makes it impossible for us to continue to invest in the EMMAC-Curaleaf story despite our confidence in this investment."
Burns noted the proceeds from the sale will go towards further investments to expand its portfolio.
By Paul McGowan; paulmcgowan@alliancenews.com
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