18 Dec 2020 07:00
18 December 2020
Spinnaker Opportunities plc
("Spinnaker" or the "Company")
Update on Proposed Medicinal Cannabis RTO
Further to the update on 21 September 2020, regarding the proposed reverse take-over of medicinal cannabis company, Kanabo Research Ltd ("Kanabo") (the "RTO" or the "Proposed Acquisition"), Spinnaker is delighted to confirm that it has conditionally agreed to acquire the entire issued share capital of Kanabo. The executed Share Purchase Agreement ("SPA") is a restatement of the agreement that was originally signed on 2 December 2019, updated for the passage of time.
Spinnaker is also pleased to confirm that preparations for the publication of a prospectus and admission of the enlarged group to trading on the London Stock Exchange are now well advanced.
Under the above circumstances, the board of Spinnaker has agreed to advance a further £100,000 to Kanabo to support business development and working capital prior to admission.
The Share Purchase Agreement
Spinnaker has conditionally agreed to acquire the entire issued share capital of Kanabo. The acquisition of Kanabo will be satisfied by the issue and allotment of new ordinary shares in the capital of the Company (the "Consideration Shares"), such Consideration Shares to be issued at an agreed placing price, and within certain agreed target valuation parameters. The placing price will be determined following the completion of fundraising activities being undertaken by the Company's brokers in connection with the RTO.
Whilst the terms of the Proposed Acquisition have been agreed, the acquisition remains subject to the satisfaction of certain conditions, including inter alia:
· The transaction will constitute a reverse takeover under the Listing Rules and will be subject to approval by shareholders of the Company at a general meeting
· The Company having obtained a waiver from the Takeover Panel under Rule 9 of the Takeover Code
· The successful completion of fundraising activities to be undertaken by way of a placing and direct subscriptions by new and existing investors
· Re-listing of the enlarged group on the London Stock Exchange
Accordingly, there is no certainty that the transaction will proceed.
The Loan Facility Agreement
To provide additional working capital to support business development, Spinnaker has agreed to advance a further £100,000 to Kanabo as a loan secured against the intellectual property and other assets of Kanabo. This will bring total loan funding advanced to Kanabo to £400,000.
The terms of the additional loan tranche are based on those of the Loan Facility Agreement originally set out in the announcement of 2 December 2019 and amended and restated as set out in the announcement of 19 March 2020 to allow for loan funding up to an aggregate amount of £400,000 (including this tranche). The term of the loan is for a maximum of 18 months from date of advance, with an interest rate of 6.0% per annum.
Since the loan advances come from internal Spinnaker funds, the interest terms and security arrangements will fall away upon completion of the RTO.
The full terms of the Proposed Acquisition are expected to be set out in a prospectus which will be published as soon as possible.
Andy Morrison, Chairman of Spinnaker, said:
"2020 has been a challenging year across the board and the difficulties we have faced has made it all the more pleasing to see the transaction now coming through. I am looking forward to working closely with Kanabo as we progress."
Avihu Tamir, Founder and CEO of Kanabo Research Limited, commented:
"The CBD Wellness industry in Europe received a huge fillip on 19 November 2020 with the European Court of Justice ruling CBD not to be a narcotic substance, thereby facilitating the free trade of CBD within the EU single market. We are delighted to be moving forward with the transaction at a very promising time in the evolution of the industry. The additional funds from Spinnaker will enable us to hit the ground running with a range of products that will improve the well-being of millions of people. We will keep our shareholders updated with our progress."
For further information, please visit http://www.spinnakeropportunities.uk/ or contact the following:
Peterhouse Capital Limited (Financial Adviser and Joint Broker)
Tel: +44 (0)20 7469 0930
Lucy Williams / Guy Miller / Eran Zucker
SI Capital (Joint Broker)
Tel: +44 (0)1483 413 500 / +44 (0) 203 871 4038
Nick Emerson / Greg Mahoney
Blytheweigh (Financial PR)
Tel: +44 (0) 207 138 3553
Tim Blythe / Megan Ray
Notes to Editors
Kanabo is creating a new standard in the medical cannabis industry to improve the well-being of millions around the world. The Company will focus on the distribution of Cannabis-derived products for medical patients, and THC-free CBD products for consumers. Kanabo has conducted extensive research & development at its research centre in Israel to develop high-quality Cannabis extract formulas, innovative medical-grade vaporisers, and various non-smoking consumption solutions, making it easy and accessible for anyone in need of treatment.
Kanabo has also continued research & development activities on a range of unlicensed Medical Cannabis Oils, which will be sold alongside its medical-grade vaporisers. It is intended that medicinal products will be sold as unlicensed medicines in the UK and Germany.
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