29 May 2020 07:00
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Article 7 under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
Zoetic International plc
("Zoetic" or the "Company")
29 May 2020
Filing of Patents
Change of Registered Office
Zoetic International plc (LSE: ZOE), the London-listed vertically integrated CBD and natural resources company, is pleased to announce that it has filed US patent applications for its method of manufacturing of its Chill brand of THC-free, smokable CBD products (the "Patent"). This patent-pending method also includes a variation smoking cessation product, employing combinations of nicotine and CBD, which is also THC-free. The Patent has been in development by the Company for over a year.
The Company believes that CBD may play a rapidly increasing role in smoking cessation aides, and that its Chill branded tobacco-free, THC-free and nicotine-free products are well-placed to take an increasing share of this market, and that the Patent will provide the Company, if it is issued, with a protected market-leading offering. The Smoking Cessation market was estimated to be worth around $4 bn in 2019 in the USA, with significant growth forecast (Source: Grand View Research).
It is the Board's intention to focus the Company on non-nicotine smoking cessation products as part of its portfolio of CBD products, so it has separately agreed with Paul Mendell, the Company's former Chairman, a sales agency and licence agreement for the combined nicotine and CBD, and nicotine-only versions of the Patent on which the Company and Mr Mendell will equally share any royalties and/or licence fees from third-party use (including any third-party introduced by Zoetic). If in the future the Company decides to utilise the combined nicotine and CBD, or nicotine-only versions of the Patent, Mr Mendell will receive a 5 per cent royalty on any sales by the Company. The Company is not aware of any other tobacco-free, THC-free, nicotine and nicotine/CBD containing products in the market, and hopes its agreement with Mr Mendell will provide a valuable additional source of revenue in the future with no additional costs. No royalties or licence fees are payable by the Company to Mr Mendell on sales of the Company's Chill brand products that utilise the CBD-only version of the Patent. As part of the agreement with Mr Mendell, the Board has agreed that his options over 1,000,000 ordinary shares of 1 pence each ("Ordinary Shares"), exercisable at a price of 10p per Ordinary Share until 8 October 2029 (as announced on 8 October 2019) shall be vested unconditionally. If non-US patents are applied for, the Company and Mr Mendell intend to establish similar arrangements to the above, however there may be variance to accommodate local commercial conditions.
A second unrelated patent application has also been filed pertaining to drug compositions that contain a cannabinoid. The non-provisional patent relates generally to drug compositions, and specifically to compositions in which an active ingredient is physically mixed with a cannabinoid, and/or chemically bonded to a cannabinoid to form a prodrug, such that the cannabinoid modifies a pharmacodynamic and/or pharmacokinetic profile of the active ingredient. Zoetic will continue to work with Stephen Goldman, a consultant to the Company and inventor of the technology, in efforts to prosecute the patent over the coming months. Together, the Company and Mr Goldman have worked on the patent for over a year, since the original filing of the provisional patent last spring. Mr Goldman's options over 1,000,000 Ordinary Shares, exercisable at a price of 12p per Ordinary Share (as announced on 28 May 2019) shall be vested unconditionally. Mr. Goldman will receive a 10 per cent royalty on gross revenue of products sold by the Company within the scope of the issued patent.
Change of Registered Office
The Company has moved its registered office address to East Castle House, 27/28 Eastcastle Street, London, W1W 8DH with immediate effect.
Antonio Russo, Co-CEO of Zoetic, commented, "The filing of the smokable non-provisional patent is yet another step in Zoetic's journey to lead the industry in innovation and product development. We believe there is a major shift in how tobacco users will make the transition from traditional tobacco products. We believe our first mover position will have substantial benefits as other competitors begin to enter the market."
Trevor Taylor, Co-CEO of Zoetic, commented, "Although, our primary focus in the US has been on the Chill branded product lines, we believe it is important to continue to develop other cannabinoid related products that will serve other parts of the emerging market. The combination of cannabinoids with other drug compositions may prove to be a pivotal breakthrough in the science of drug efficacy."
**ENDS**
Enquiries
Zoetic International plc c/o IFC Advisory
Trevor Taylor, Co-CEO
Allenby Capital Limited (Financial Adviser and Broker) +44 (0) 20 3328 5656
Nick Harriss
Nick Naylor
IFC Advisory Ltd (Financial PR and IR) +44 (0) 20 3934 6630
Tim Metcalfe
Graham Herring
Florence Chandler