MGC Pharma
MGC Pharmaceuticals released a flurry of updates over the last week, announcing plans to launch a A$2.7m share purchase plan for its Australian investors, just weeks after conditionally raising a further £700,000.
The update came amid the release of the company’s quarterly cash flow statement, a number of personnel changes, alongside news of a significant step forward in its psilocybin research project.
On August 1, MGC informed investors that it ‘proposes to offer each shareholder with a registered address in Australia… the opportunity to subscribe for up to A$30,000’ of new fully paid ordinary shares.
The shares will be offered at A$0.0023 per share, representing a discount of 23.3% on the day’s closing price.
On July 14, the company announced that it had ‘conditionally raised £650,000’ by way of a placing and subscription of 541,666,667 new ordinary shares at a price of 0.12p, with CEO Roby Zomer investing another £50,000.
The sale price represented a discount of 57% from the closing price as of July 12, with the funds reportedly being used to ‘bridge the company’s general working capital requirements’, while management explored ‘additional cost reduction measures that could increase working capital’.
MGC also published its financial figures for the three months to June 30, revealing ‘receipts from customers’ of A$691,000 over the period, representing an annual income of A$4m.
The period also saw MGC record an operational ‘cash outflow’ of A$2.7m, but an inflow of A$3.4m including funding from its placement in April, with cash on hand as of the end of June of A$259k and a further A$7.7m of funding capacity available under its agreement with Mercer.
Meanwhile, the company also reported a number of staff changes over the period, including the departure of Brett Mitchell and Nativ Segev from its board as it ‘moves away from the medicinal cannabis sector toward a more pharma-focused business strategy’, with the former set to be replaced by ‘experienced life-sciences executive’ Layton Mills.
Last week, MGC’s Joint Company Secretary Arron Canicais was also revealed to be stepping down, seeing Rowan Harland remaining as sole Company Secretary.
Chill Brands
Chill Brands also published financial results this week, revealing a significant drop in year-on-year revenues in the 12 months to March 31, 2023, in turn seeing its stock price fall by around 30%.
Over the year, Chill reported revenues of £82,840, down nearly 90% on the £624,187 it reported in the same period a year earlier.
Meanwhile it made a loss for the period of £4.3m, which while down from the £5.7m loss it reported a year earlier, still eclipsed its incoming cash.
Thanks to total fundraising activity of £3.5m before costs over the period, Chill reportedly had just over £3.7m ‘at the bank’ at year end.
It offered a number of reasons for its significant drop in revenues during the year, also highlighting that £448k of the £624k it made in 2022 was ‘generated by a single sale event to Ox Distributing’.
Zooming out, Chill’s CEO Callum Sommerton said the company’s revenue had ‘fallen short of expectations’, but that the results reflected a ‘year of transition during which historical sales agreements limited recordable revenue’.
Following a ‘thorough assessment of the group’s business activities’ during the period, the group has reportedly decided that the performance of its CBD products no longer warranted the continuation of its current business strategy.
In light of both ‘issues specific to the group itself’ and an ‘exceptional degree of change’ in the wider CBD industry, the group has undergone a ‘strategic shift’ away from CBD products and towards the vaping sector.
“The 2023 financial year marked a critical juncture for Chill Brands. Having started 2022 as a distressed contender within the extremely challenging CBD market, the business now has a renewed opportunity in the fast-growing market for vapour products. Our change of focus is one that we strongly believe will improve our financial performance and create significant value for our shareholders.”
Hellenic Dynamics
Cannabis cultivator Hellenic Dynamics also reported its full-year financial figures this week, alongside news it has received an EU grant for €304,425.
In the year to March 31, 2023, a year in which Hellenic went public, the pre-revenue company reported a total comprehensive loss of £4.6m.
A significant portion of this was attributed to a ‘non-cash share based payment charge’ of £3.7m relating to its reverse takeover in December 2022.
As of the period end, Hellenic reported cash and cash equivalents of £2.1m, and the company says it expects that its ‘first commercial cultivation will occur in the coming months’.
On the same day, Hellenic reported that it has successfully received a substantial grant via the EU Horizon Europe project.
Hellenic is noted as the only medical cannabis cultivator out of 29 members of the research consortium, which focuses on the optimisation of artificial intelligence (AI).
Davinder Rai, Hellenic’s CEO said: “Hellenic will now be in a position to benefit from the advantages artificial intelligence can bring to the medical cannabis cultivation industry. I look forward to implementing this technology into our facility and working with our 28 partners across 11 European countries and seeing the benefits this could bring to the industry as a whole, none more so that allowing patients access to a sustainably consistent source of medicine.”
