London-based Akanda Corp. has amended its original nonbinding letter of intent to sell its Portuguese subsidiary, RPK Biopharma Unipessoal, to Somai Pharmaceuticals for a reduced price of $2 million, down from the initial deal’s proposed amount of $2.7 million. This change was highlighted in a recent news release from the company and encompasses all existing liabilities of RPK, which add up to approximately 4 million euros. To ensure a smooth transition, a deposit of $500,000 has been placed in an escrow account, while the rest of the balance will be due following the completion of the transaction.
The revised deal reflects a lower acquisition cost for Somai Pharmaceuticals and could potentially make it easier to secure financing for the proposed transaction.
A Follow-Up Securities Purchase Agreement and Proceeds Utilization
In a subsequent announcement the day after revealing the amended letter of intent with Somai, it was stated that Akanda Corp. has entered into a securities purchase agreement with unidentified accredited investors. Under this arrangement, investors are slated to buy 280,851 common shares at a cost of $0.406 per share, along with prefunded warrants to purchase an additional 1,462,991 common shares.
Akanda Corp. plans to allocate the proceeds from this agreement, after accounting for any necessary advisory and related expenses, towards general working capital needs and other corporate purposes. The funds obtained from these investments could enable Akanda to weather unexpected challenges and set the stage for future growth and expansion.
Extension for Compliance with Stock Exchange’s Minimum Bid-Price Rule
In another development earlier in January, Akanda Corp. received a valuable extension from the stock exchange, granting them 180 calendar days to comply with the mandatory $1 minimum bid-price rule. This flexibility affords the company some much-needed time to work on improving its financial position and stock valuation, potentially making it more attractive to investors in the long run.
Implications of These Developments for the Cannabis Market
The recent amending of the deal between Akanda Corp. and Somai Pharmaceuticals is just one example of how the cannabis industry is continuing to evolve and strategically adjust to ever-changing market conditions. With international companies such as Akanda entering into new markets, opportunities are opening up for greater collaboration and innovation within the sector.
The future of Akanda Corp., and by extension, the global medical cannabis market as a whole, appears optimistic. As the company continues to secure funding through the securities purchase agreement and establish relationships with companies like Somai Pharmaceuticals, it is in a strong position for future success.