International medical cannabis company Akanda Corp. (NASDAQ: AKAN) announced an amended nonbinding letter of intent. The company plans to sell its Portuguese subsidiary, RPK Biopharma Unipessoal, to Somai Pharmaceuticals for $2 million. This reflects a reduced price from the initial $2.7 million agreement.
The original deal with Somai has been modified; the sale price is now $2 million. Akanda did not specify when it established the initial nonbinding deal or the reason for the amendment. Notably, the deal encompasses all current liabilities of RPK. They are approximately 4 million euros ($4.3 million), as stated in a news release by Akanda.
Moreover, the agreement secures a $500,000 deposit in an escrow account, with the remaining amount payable upon the successful conclusion of the transaction. The company’s press release states that it will finalize the specific terms of the proposed deal and outline them in a definitive agreement. Additionally, the company extended the duration of the letter of intent until March 31 to facilitate the negotiation process.
Following the announcement of the amended nonbinding deal, Akanda disclosed its entry into a securities purchase agreement with undisclosed accredited investors. The company anticipates gross proceeds of approximately $708,000 from this agreement. In addition to this, they are intending to utilize the funds, minus advisory and other fees, for general working capital and corporate expenses.
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Akanda offering details and Nasdaq compliance
The investors have committed to purchasing 280,851 common shares at a price of $0.406 per share and prefunded warrants enabling them to buy 1,462,991 common shares immediately. The prefunded warrants are exercisable at any time. The offering was slated to conclude on February 2.
Furthermore, in early January, Akanda announced receiving a 180-calendar-day extension from the Nasdaq to regain compliance with the stock exchange’s $1 minimum bid-price rule. The company now has until July 1 to meet the compliance criteria. This requires its stock price to close at or above $1 per share for a minimum of 10 consecutive days. Akanda has been noncompliant since July 3, 2023.
Akanda Corp.’s decision to sell its Portuguese cannabis subsidiary at a revised price of $2 million underscores its strategic realignment amidst evolving market dynamics. The amended deal, coupled with the investor agreement and ongoing efforts to regain Nasdaq compliance, reflects Akanda’s proactive approach to navigating challenges and pursuing growth opportunities in the medical cannabis sector.
zartasha@mugglehead.com
