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Sativa Half Year Financial Results (Unaudited) June 2018

Press Release                                                                                                             27 September 2018

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Sativa Investments PLC

(“Sativa” or “Sativa Investments” the “Company” or the “Group”)

Half year results 2018

Sativa Investments PLC (NEX: SATI), the UK’s first medicinal cannabis investment vehicle, is pleased to announce its half year results for the six months ended 30 June 2018.

Highlights:

  • Sativa listed on the UK’s NEX Exchange on 29 March, raising £1.1m net of £129K expenses, as the UK’s first listed medicinal cannabis investment vehicle
  • The founder and CEO of Sativa, Geremy Thomas, along with his immediate family, had previously invested £560K in to the Company in January 2018
  • A further £500K was raised in June from the LF Miton UK Smaller Companies Fund, which became the Company’s first major institutional investor
  • £656K worth of investment was deployed in the period to 30 June in to Veritas Pharma Inc.; Rapid Dose Therapeutics Inc., and George Botanicals Ltd
  • Total current consolidated assets of £2.08m as at 30 June
  • Cash at bank and cash equivalents £1.42m as at 30 June
  • Post period-end, the Company purchased PhytoVista Laboratories Ltd and also formed Sativa
    Germany GmbH, a joint venture with Lexamed GmbH

Geremy Thomas, founder and Chief Executive Officer of Sativa Investments, said:

“Sativa has progressed significantly since listing, along with the industry itself, witnessing a sea-change in attitude from the medical profession and also the Government in relation to unmet patient needs and widespread realisation that the UK is falling behind in terms of accepting the benefits of medicinal cannabis.

“The Company continues to build a solid foundation for the end-to-end supply of medical cannabis and CBD products to fulfill its seed to consumer strategy.”

-Ends-

The Directors of the Company accept responsibility for the contents of this announcement.

 

For further information:

Geremy Thomas
Founder & Chief Executive Officer
Sativa Investments PLC
+44 (0) 20 7971 1255
enquiries@sativainvestments.com

 

NEX Exchange Corporate Adviser
Guy Miller
Peterhouse Capital Limited
+44 (0) 20 7469 0930
gm@peterhousecap.com

 

Financial PR and IR
Julian Bosdet / Dylan Mark /Alejandra Campuzano
Abchurch Communications
+44 (0) 20 7469 4630
SativaInvestments@abchurch-group.com

Joseph Colliver
Chief Financial Officer
Sativa Investments PLC
+44 (0) 20 7971 1255
enquiries@sativainvestments.com

Notes to Editors

Sativa will look for well-placed opportunities within the dynamic regulatory environment of the Medicinal Cannabis sector and the Company’s investment strategy focuses on the production, testing and compliance, research and development, including pharmacology, commercialisation and sales and marketing of Medicinal Cannabis in jurisdictions where it is regulatorily permitted.  The Company has committed to an independent legal review prior to each investment to verify compliance with the prevailing regulatory environment. 

The Company’s equity interest in a proposed investment may range from a minority position, to a controlling interest, or to 100 per cent ownership.  The ventures that Sativa intends to acquire can either be public or private.  

Sativa Investments has four investments to date including Canadian-based and dual-listed emerging global pharmaceutical company,Veritas Pharma Inc., Toronto-based Pharma-Tech company Rapid Dose Therapeutics Inc., which owns the patent-pending proprietary QuickStrip™ technology, UK-based CBD products provider George Botanicals, and PhytoVista Laboratories, a UK testing laboratory meeting the need for regulatory and batch testing of products such as CBD oil. 

Sativa is also focussed on researching and developing medicinal cannabis products by funding university research grants of medicinal cannabis through its Sativa Foundation.

The Company’s Board and Medicinal Cannabis Advisory Board have a combined 60 years’ industry experience, with significant pharmaceutical strength and experience and extensive contacts in the industry, which includes pharmacologist Sir Alasdair Breckenridge, who liaises with the Home Office and the Medicines and Healthcare products Regulatory Agency (“MHRA”), which he has chaired, for the legalisation of medicinal cannabis in the UK  Their extensive skills range from capital fund raisings, medical research, and start-ups, to pharmaceutical development. 

For more information on Sativa Investments, please visit: www.sativainvestments.com

CHAIRMAN’S STATEMENT

 

The Company’s maiden Interim Results relate to the six months to 30 June 2018.  Incorporation in December 2017 was followed by listing on the NEX Exchange on 29 March, raising £1.1m net of £129K expenses, as the UK’s first listed medicinal cannabis investment vehicle. 

The founder and CEO of Sativa Investments, Geremy Thomas, along with his immediate family, had previously invested £560K (224m shares at 0.025p each) in to the Company in January 2018.  

Sativa raised £500K in June from the LF Miton UK Smaller Companies Fund, which became the Company’s first major institutional investor. 

Sativa has progressed significantly since listing, along with the industry itself, witnessing a sea-change in attitude from the medical profession and also the Government in relation to unmet patient needs and widespread realisation that the UK is falling behind in terms of accepting the benefits of medicinal cannabis.  In Canada there are approximately 30 listed companies involved in the industry yet, in the UK, Sativa is the first of only three to date in the UK.   

In anticipation of market and regulatory changes, Sativa is positioned as a seed to consumer business responding to market demand, reflecting what the Company believes will be the opportunity in the UK and Continental Europe. 

£656K worth of investment was deployed in the period to 30 June.  These investments were in Canadian-based and dual-listed emerging global pharmaceutical company,Veritas Pharma Inc.; Toronto-based Pharma-Tech company Rapid Dose Therapeutics Inc., which owns the patent-pending proprietary QuickStrip™ technology, and UK-based cannabidiol (“CBD”)products provider George Botanicals Ltd (or “George Botanicals”).  £450K of the £656K was paid in cash for Veritas Pharma, Rapid Dose Therapeutics andGeorge Botanicals, with the remaining £206K being fulfilled with the issue of 5m shares in Sativa Investments.

Post period-end, in July, the Company purchased PhytoVista Laboratories Ltd, a UK testing laboratory, for a total consideration £460K which was paid £235K in cash and £225K worth of shares at £0.045 pence per share.  This purchase positions Sativa to meet the need for regulatory and batch testing of CBD products and, once approved by the UK Home Office, medicinal cannabis treatments including tetrahydrocannabinol (“THC”). 

On 21 September, the Company announced that it has entered into a joint venture with German-based Lexamed GmbH (“Lexamed”), forming a new German medicinal cannabis company named Sativa Germany GmbH (“Sativa Germany”), which will secure German wholesale, import and export licences for the distribution of medicinal cannabis products. The formation of Sativa Germany is subjectto ratification by the German courts and intended supply from the UK is subject to Sativa successfully applying for aHome Office Medicinal Cannabis licence.  Sativa Germany will however source product from any jurisdiction where it is regulatorily permitted. 

The announcement in June from the Home Secretary, Sajid Javid, stating that medicinal cannabis will be available on prescription in the UK after a Government review this autumn, has brought the industry in the UK further forward.  This came following a groundswell shift in public opinion after the country and Government itself was moved by the plight of UK children being deprived of medicinal cannabis prescriptions to treat their rare forms of epilepsy, along with the well-documented case of a British former athlete, Lara Smith, who is forced to travel overseas every three months to obtain and then import medicinal cannabis medication to treat her crippling spondylosis condition. 

The UK Home Office and the Medicines and Healthcare products Regulatory Agency (MHRA) are consulting with Sativa on establishing medicinal cannabis’ availability in the UK.  The Company has signed an IP agreement with Veritas Pharma, which allows Sativa to use Veritas’ detailed research on cannabis strains to assist Sativa’s application to the UK Home Office Drugs Licensing and Compliance Unit for a UK medicinal cannabis growing licence. 

Sativa Investments also has founded the Sativa Foundation, which funds academic research into medicinal cannabis and its benefits to the pharmaceutical and healthcare sectorsthrough the award of research grants. 

Performance

As a newly established investment vehicle, the maiden Interim Results reflect the Company’s early stage of development.  In the six months ended 30 June 2018, the Company’s consolidated revenues were at £7.7K, with a Gross Profit of £6.7K.  Company revenues represent six business days of sales by George Botanicals from its acquisition on 22 June.  Since the period end and to 31stAugust date, George Botanicals’ revenues are £68.2K, a pleasing run-rate for a newly established business in an early-stage market. 

Loss before taxation for the period is £226K. 

As at 30 June 2018 Sativa had total current consolidated assets of £2.08m, with £1.42m of that being cash and cash equivalents at bank.  As at 31 August 2018, cash at bank was £0.94m. 

The half year results have not been reviewed by the Company’s auditors. 

Related party transaction 

In May 2018 Sativa leased from Carbon Managers Limited, of which Sativa’s Chief Executive Officer, Geremy Thomas, is the 100 per cent shareholder, 404 sq m of business space at current market rates. From October 2018, the Company will add a further 372 sq m of business space on similar terms. 

Strategy

The Company’s strategy is to become a leading player in the medicinal cannabis industry in the UK while continuing its overseas investment policy.  As the UK’s first public medicinal cannabis investment vehicle, Sativa is a pioneer addressing and benefiting from healthcare industry needs and regulatory change.  In addition to medical cannabis involving THC, the Company foresees wider opportunities for CBD products in the UK including vapes, e-pens, balms, edible gels, e-liquids and capsules.  George Botanicals is already involved in this area as a distributor of non-THC products.  

Management and Board

In June, the leading pharmacologist, Sir Alasdair Breckenridge,a former chair of the MHRA, joined the Company’s Medicinal Cannabis Advisory Board.  Along with chairing the MHRA, Sir Alasdair has also chaired the Committee on Safety of Medicines and the Emerging Science and Bioethics Advisory Committee, and was member of the Medical Research Council.  Sir Alasdair is assisting Sativa in its liaison with the Home Office and the MHRA. 

Sativa’s Board has continued to gain in strength throughout the calendar year, with the appointment in August of Jonathan Wearing and Angus Kerr as non-Executive Directors. Jonathan, the Company’s Chairman, is an experienced City-based corporate financier who is the former Chairman and current non-Executive Director of leading AIM growth company, Ideagen Plc.  Angus, non-Executive Director, has experience in global banking with expertise in equity capital markets and M&A.  At the time of the appointment of both Jonathan and Angus, Noel Lyons resigned as independent non-Executive Director of the Company. 

On 30 August, the Company appointed Joseph Colliver FCA as a Director and as Chief Financial Officer. Joseph qualified as a Chartered Accountant at Mazars LLP and his previous experience includes being Global Commercial Director of a WPP plc subsidiary, Kantar Consulting, with a $1.8bn turnover. 

Outlook

Having listed in March of this year, Sativa has continued to gain momentum, which has coincided with the opportunities presented by medicinal cannabis and CBD products industry the UK. 

The Board believes that the Company will benefit from its first mover advantage as the UK medicinal cannabis and CBD products market develops.  The Company’s activities run from the end-to-end process of research, growing, manufacture, testing, distribution and sale of medicinal cannabis and CBD products, giving a broad coverage of the perceived market opportunities.  

Jonathan Wearing
Chairman