Ananda Developments Plc Proposed Rule 9 Waiver and Acquisition

 
TIDMANA 
 
24 November 2022 
 
                            ANANDA DEVELOPMENTS PLC 
 
                          ("Ananda" or the "Company") 
 
  Proposed approval of waiver of obligations under Rule 9 of the City Code and 
      acquisition of  remaining 50 per cent interest in DJT Group Limited 
 
The Directors of Ananda Developments PLC are pleased to announce that the 
Company is today posting a circular (the "Circular") to Shareholders convening 
a General Meeting of the Company for 11.00 a.m. on 19 December 2022. 
 
At the General Meeting, a resolution will be proposed to approve the waiver by 
the Panel on Takeovers and Mergers of the obligation which would otherwise 
arise on the Concert Party (as defined in the Circular) to make a general offer 
under Rule 9 of the Takeover Code as a consequence of the proposed settlement 
of the outstanding unsecured loan to Ananda from Charles Morgan, Chairman of 
the Company. 
 
A resolution will also be proposed to approve the acquisition from Anglia 
Salads of the remaining 50 per cent of DJT Group which the Company does not 
already own. DJT Group owns 100% of the issued share capital of DJT Plants, 
which has been granted a licence to grow >0.2% THC Cannabis for research 
purposes. 
 
Highlights 
 
·    Subject to shareholder approval, the current outstanding and unsecured 
debt of £2,241,792 owed by the Company to Charles Morgan will be settled by the 
issue of: 
 
o  warrants to subscribe for 574,084,000 Ordinary Shares (the 2022 Warrants); 
and 
 
o  a total of £2,241,792 in nominal value of 10% unsecured convertible loan 
notes 2022, which will be convertible into a maximum of 1,120,896,000 Ordinary 
Shares (the 2022 CLNs) 
 
·    Due to prevailing market conditions, both in general and specific to the 
cannabis sector, the Directors  believe that the loan was the most appropriate 
funding mechanism to progress the objectives of the Company 
 
·    These objectives include the rapid exploitation, at its secure UK 
facility, of the licence to cultivate cannabis for research purposes held by 
DJT Plants 
 
·    The Company has agreed with Anglia Salads to acquire the remaining 50 per 
cent of DJT Group that the Company does not currently own for consideration of 
£3.2 million, to be satisfied by the issue of 350,000,000 ordinary shares in 
the Company, which will be locked in for a period of 36 months 
 
Melissa Sturgess, Chief Executive Officer of Ananda, stated: "We thank 
shareholders for their extreme patience whilst we've concluded this transaction 
to make DJT Plants a wholly owned subsidiary of Ananda, and we also thank the 
Chairman of the Company for his significant and ongoing financial support. This 
is an extremely exciting next step for the Company which allows us to focus all 
efforts more fully on the ongoing research  activities and trial cultivations 
at DJT Plants, as well as securing all future benefits for the Company and, 
therefore, its  shareholders." 
 
An extract from the Circular is set out below. Words and expressions defined in 
the Circular have the same meaning in this announcement.  A copy of the full 
text of the Circular will be available at www.anandadevelopments.com. 
 
"Dear Shareholder 
 
 Approval of waiver of obligations under Rule 9 of the City Code on Takeovers 
                                  and Mergers 
 
Acquisition of 50 per cent interest in DJT Group not currently owned by Ananda 
 
                                      and 
 
                           Notice of General Meeting 
 
1.   Introduction 
 
On 18 October 2022, Ananda announced, among other things, that the Company was 
proposing to settle an outstanding unsecured loan to Ananda from Charles 
Morgan, Chairman of the Company, through the issue to Charles Morgan of 
warrants and convertible loan notes. 
 
Charles Morgan is already a significant shareholder in Ananda and is also a 
member of the Concert Party, along with Melissa Sturgess, the Company's Chief 
Executive Officer. 
 
Under Rule 9 of the Takeover Code, the  issue to Charles Morgan of the 2022 
Warrants and the 2022 CLNs and their subsequent exercise or conversion, would 
result in Charles Morgan's individual percentage interest in Ordinary Shares 
increasing from 18.84 per cent to 64.38 per cent and the Concert Party's 
aggregate percentage interest in Ordinary Shares increasing from 44.43 per cent 
to 71.77 per cent, levels  which would normally result in the Concert Party 
being obliged to make an offer to all Shareholders to acquire all the Ordinary 
Shares that it did not already own. However, the Takeover Panel has agreed to 
waive this obligation, subject to the approval of the Independent Shareholders. 
Your attention is drawn to the information about the Takeover Code set out in 
section 4 of this Part I. 
 
As Charles Morgan and Melissa Sturgess, both of whom are directors of the 
Company, are members of the Concert Party and also deemed to be acting in 
concert with each other, the Debt Proposals and the Waiver have been considered 
by the Independent Directors. 
 
The purpose of this Document is to set out the background to and the reasons 
for the Debt Proposals and the Waiver and to explain why the Independent 
Directors consider the Debt Proposals and the Waiver to be in the best 
interests of the Company and its Shareholders as a whole and why they recommend 
that Independent Shareholders should vote in favour of the Waiver Resolution. 
 
It was also announced on 18 October 2022 that the Company and Anglia Salads had 
agreed to amend the terms of the Acquisition, originally announced on 8 June 
2021, such that the consideration payable to Anglia Salads will now be £3.2 
million, satisfied by the allotment of the 350,000,000 Consideration Shares. 
This Document contains further information about the Acquisition, which is also 
subject to Shareholders' approval at the General Meeting. All of the Directors 
consider that the Acquisition is in the best interests of the Company and its 
Shareholders as a whole and they are unanimously recommending that Shareholders 
should vote in favour of the Resolution to approve it. 
 
Notice of a General Meeting, at which resolutions will be proposed to approve 
the Waiver and the Acquisition, is set out at the end of this Document. 
 
2.   Background to the Debt Proposals and the Acquisition 
 
The Licence 
 
In the UK, Cannabis is a 'controlled drug' under the MDA 1971. It is illegal 
for a person in England, Wales or Scotland to produce, supply, possess, import 
or export Cannabis, unless they have been granted a licence by the Home Office 
of the United Kingdom Government. 
 
In June 2019, Ananda acquired Tiamat, which had already agreed with Anglia 
Salads and JEPCO to pursue the Licence and to work together to grow Medical 
Cannabis for research purposes if the Licence was granted. Following the 
acquisition of Tiamat, DJT Group was incorporated as a vehicle owned 50/50 by 
Ananda and Anglia Salads. DJT Plants, a company which had previously held Home 
Office licences, became a 100 per cent owned subsidiary of DJT Group and it was 
decided that DJT Plants should make the application for the Licence. 
 
On 14 October 2019, DJT Plants submitted its application for a licence to grow 
>0.2% THC Cannabis for research purposes pursuant to the MDA 1971; DJT Plants 
was granted the Licence on 17 May 2021. The Licence is granted on an annual 
basis and was last renewed on 10 October 2022. 
 
The Licence allows DJT Plants to develop a broad range of Cannabis genotypes 
(or strains) through a genetic stabilisation and field trials programme. The 
Company's ultimate goal is to grow a number of these genotypes for commercial 
purposes in the UK. The Directors believe there is an unmet need for 
high-quality, consistent Medical Cannabis, both in the UK, and internationally. 
 
Exploitation of the Licence 
 
Since the Licence was granted, significant development has been undertaken by 
DJT Plants at its Home Office approved research site, including the 
construction of 0.2Ha of multi-chapelle growing structures, to accommodate 
ongoing field trials, and an indoor research facility. Senior staff have also 
been recruited, including a  Head of Cultivation and a Head of Plant Science; 
growing, testing and selection of cannabis strains is ongoing at scale. 
 
Construction of the Home Office approved research facility was completed in 
February 2022. The research facility comprises a large outdoor storage area 
with a concrete base, and modular work rooms inside an existing shed, providing 
laboratory space, indoor breeding spaces and clean and secure areas for 
handling the harvested flower. The research facility is fenced, secured and 
monitored in accordance with Home Office guidelines. 
 
DJT Plants' operations are currently focused on strain stabilisation, medical 
cannabis research and large-scale field trials. These initiatives are in 
preparation for its intended applications to the Home Office to grow Medical 
Cannabis for commercial purposes and to the MHRA for the required GMP (Good 
Manufacturing Practice) certification. DJT has already commenced planning work 
on its pilot GMP commercial facility, which will be built within the existing 
site footprint 
 
Genetic Stabilisation Research Programme 
 
In February 2022, DJT Plants commenced its Single Seed Decent (SSD) genetic 
stabilisation programme at its research facility. DJT Plant's research 
programme is designed to create a library of stable Cannabis genetics in order 
to 'match' Cannabis plant profiles with clinical indications.  The research 
plan involves self-crossing 13 heterozygous (non-identical) Cannabis strains 
for five generations in order to achieve a number of stable genotypes. This 
research is expected to give the Company the building blocks for the 
cultivation of genetically stable Cannabis crops with consistent metabolic 
profiles year on year. 
 
The Directors believe that the understanding gained from the analysis and 
studies undertaken by DJT Plants will add to the body of knowledge of Medical 

Cannabis and how it can be grown in DJT Plant's particular conditions and will, 
subject to further Home Office licensing, allow the Company to commence the 
cultivation of stable strains of Medical Cannabis for commercial purposes. 
 
It is the belief of the Directors that the genetically stable strains will 
constitute significant intellectual property and the Company will seek patents, 
trademarks or Breeders' rights on these strains in order to protect the value 
created for Shareholders. Consistent crops will, in the opinion of the 
Directors, increase the Company's chances of being approved as a provider of 
Medical Cannabis into the UK market. 
 
Field Trials 
 
DJT Plants has recently completed the harvest of its 2022 field trial crops. 
Samples have been taken and will be sent for metabolic profile analysis to 
determine the amounts of various cannabinoids and terpenes contained in the 
flower of the various strains.  This information will be important in deciding 
which cultivars are chosen for commercial growing.  In summary, DJT grew a 
number of each of 5 variants from seeds of each of 13 cultivars: 
 
·    Four high THC cultivars, with both sedating and uplifting terpene profiles 
 
·    Four balanced THC:CBD cultivars, with both sedating and uplifting terpene 
profiles 
 
·    Five high CBD cultivars, with predominantly uplifting terpene profiles 
 
The trials involved growing each cultivar in six different densities and with 
various plant manipulation strategies.  The objective is to determine, for each 
cultivar, the optimal way in which to grow it to maximise both quality and 
yield in DJT Plant's growing environment. 
 
Detailed time studies were completed during the post-harvest activity to 
maximize operational efficiency for commercial production. Growing and 
processing the range of cultivars together, allowed direct comparisons of how 
well the different cultivars perform in Ananda's growing environment, together 
with the different characteristics of the flower of each cultivar when trimmed. 
These data points will inform commercial cultivation decisions in due course. 
 
At the end of its genetic stabilisation programme, DJT Plants will choose a 
number of the stable genotypes to grow in its conditions, with metabolic 
profiles identified as useful for treating certain medical conditions and which 
exhibit good agronomic traits. 
 
In addition, as part of its research, DJT Plants will also look to establish 
extraction, distillation and isolation facilities to manufacture "full 
spectrum" Cannabis products according to the specific combinations of 
cannabinoids, terpenes and flavonoids identified as being efficacious for 
particular indications. 
 
3.   The Debt Proposals 
 
The costs of the rapid and comprehensive exploitation of the Licence have 
principally been funded by Charles Morgan, who, as at 30 September 2022, had 
lent Ananda a total of £2,241,792. The Company's investment in DJT Plants, and 
certain other corporate costs, have had to be financed through this loan due to 
prevailing market conditions, which meant that alternative funding options were 
not available to the Company on terms acceptable to the Directors. In the 
absence of such funding options, the Independent Directors believe that 
obtaining the loan from Charles Morgan was the most appropriate method of 
financing the important developments summarised in section 2 of this Part I. 
 
In order to put the Company in a position to access more traditional funding in 
the future, the Company is proposing that the outstanding debt due to Charles 
Morgan as at 30 September 2022 should be settled by the issue to him of: 
 
·    warrants to subscribe for 574,084,000 Ordinary Shares (the 2022 Warrants); 
and 
 
·    a total of £2,241,792 in nominal value of 10% unsecured convertible loan 
notes 2022, which will be convertible into a maximum of 1,120,896,000 Ordinary 
Shares (the 2022 CLNs). 
 
Further information on the terms of the 2022 Warrants and the 2022 CLNs is set 
out in sections 4.1 and 4.2  of Part II of this Document. 
 
Any future loans from Charles Morgan to the Company, if required, will bear 
interest at the rate of 10 per cent per annum and will be unsecured. 
 
4.   The Takeover Code 
 
The Debt Proposals give rise to certain considerations under the Code. Brief 
details of the Code and the protection this affords Shareholders are set out 
below. 
 
The Code is issued and administered by the Panel. The Code and the Panel 
operate to ensure fair and equal treatment of shareholders in relation to 
takeovers, and also provide an orderly framework within which takeovers are 
conducted. The Code applies to all takeover and merger transactions, however 
effected, where the offeree company is, inter alia, a company which has its 
registered office in the UK, the Channel Islands or the Isle of Man,  the 
securities of which are admitted to trading on a regulated market or a 
multilateral trading facility (such as the AQSE Growth Market) in the United 
Kingdom or on any stock exchange in the Channel Islands or the Isle of Man. 
 
Under Rule 9 of the Code, any person who acquires an interest in shares which, 
taken together with shares in which that person or any person acting in concert 
with that person is interested, carry 30 per cent or more of the voting rights 
of a company which is subject to the Code, is normally required to make an 
offer to all the remaining shareholders to acquire their shares. Similarly, 
when any person, together with persons acting in concert with that person, is 
interested in shares which in the aggregate carry not less than 30 per cent of 
the voting rights of such a company but does not hold shares carrying more than 
50 per cent of the voting rights of the company, an offer will normally be 
required if any further interests in shares carrying voting rights are acquired 
by such person or any person acting in concert with that person.  An offer 
under Rule 9 must be made in cash at the highest price paid by the person 
required to make the offer, or any person acting in concert with such person, 
for any interest in shares of the company during the 12 months prior to the 
announcement of the offer. 
 
Rule 9 of the Code further provides, among other things, that where any person 
who, together with persons acting in concert with that person, holds shares 
carrying more than 50 per cent of the voting rights of a company, acquires any 
further shares carrying voting rights, then such person will not generally be 
required to make a general offer to the other shareholders to acquire the 
balance of their shares. 
 
Under the Code, a concert party arises when persons, pursuant to an agreement 
or understanding (whether formal or informal), co-operate to obtain or 
consolidate control of  a company or to frustrate the successful outcome of an 
offer for a company. Under the Code, control means an interest, or aggregate 
interests, in shares carrying 30 per cent or more of the voting rights of a 
company, irrespective of whether the interest or interests give de facto 
control. In this context, voting rights means all the voting rights 
attributable to the capital of the company which are currently exercisable at a 
general meeting. 
 
5.   The Concert Party 
 
In 2019, the Panel and the Company agreed that certain individuals and a 
corporate entity were 'acting in concert' in connection with the proposals 
contained in the 2019 Waiver Circular. The Panel and the Company have agreed 
that certain of those parties are still 'acting in concert'. Of these, the 
parties who still have an interest in the voting rights of the Company are 
Charles Morgan, Melissa Sturgess, Jeremy Sturgess-Smith, Peter Redmond and 
Michael Langoulant. 
 
Further information about the members of the Concert Party and the 
relationships between them is set out in section 6 of this Part I. 
 
The Concert Party currently holds 358,732,485 Ordinary Shares in aggregate, 
representing 43.72 per cent of the voting rights of the Company. In addition, 
Jeremy Sturgess-Smith is interested in the JSS Option, exercisable into a 
further 10,451,389 Ordinary Shares. The individual interests of the members of 
the Concert Party and the maximum aggregate potential interest of the Concert 
Party in the voting rights of Ananda is therefore currently as follows: 
 
Concert Party       Current       JSS      Maximum interest        Maximum 
Member            Holding of   Option        in Ordinary     percentage interest 
                   Ordinary                    Shares         in voting rights 
                    Shares                  following the       following the 
                                           exercise of the   exercise of the JSS 
                                              JSS Option           Option 
 
Charles Morgan    156,601,896      -         156,601,896           18.84% 
 
Melissa Sturgess  185,794,452      -         185,794,452           22.36% 
 
Peter Redmond      8,686,743       -          8,686,743             1.05% 
 
Jeremy             1,700,000  10,451,389      12,151,389            1.46% 
Sturgess-Smith 
 
Michael            5,949,394       -          5,949,394             0.72% 
Langoulant 
 
Total Concert     358,732,485 369,183,874    369,183,874           44.43% 
Party 
 
Ordinary Shares   820,554,572 831,005,961    831,005,961 
in issue 
 
In addition to the Ordinary Shares set out above, Charles Morgan and Melissa 
Sturgess have been granted the Morgan/Sturgess Options and are interested in 
the Morgan/Sturgess CLNs, exercisable and convertible, respectively, into a 
further 43,565,556 Ordinary Shares in aggregate. Charles  Morgan and Melissa 
Sturgess have undertaken not to exercise the Morgan/Sturgess Options and not to 
convert any of the Morgan/Sturgess CLNs and have agreed that no Ordinary Shares 
will be issued to them by way of interest payment under the Morgan/Sturgess 
CLNs, unless such exercise does not give rise to the obligation to make a 
mandatory offer for the Company under Rule 9 of the Takeover Code. 
 

Assuming no other shares are issued and that: (i) the Consideration Shares are 
allotted following the General Meeting; (ii) the JSS Option is exercised by the 
Concert Party; and (iii) the 2022 Warrants and the 2022 CLNs are issued and, 
respectively, exercised and converted by the Concert Party, the Concert Party 
will own in aggregate 2,064,163,874 Ordinary Shares representing approximately 
71.77 per cent of the voting rights of the Company, as set out in the table 
below. 
 
Concert Party Member        Current     JSS Option    Exercise of  Conversion of    Maximum       Maximum 
                          Holding of                 2022 Warrants   2022 CLNs    interest in   percentage 
                           Ordinary                                                Ordinary     interest in 
                            Shares                                                  Shares     voting rights 
                                                                                   following     following 
                                                                                  exercise of   exercise of 
                                                                                    the JSS       the JSS 
                                                                                  Option and    Option and 
                                                                                   the 2022      the 2022 
                                                                                 Warrants and  Warrants and 
                                                                                 conversion of conversion of 
                                                                                 the 2022 CLNs the 2022 CLNs 
 
Charles Morgan            156,601,896        -        574,084,000  1,120,896,000 1,851,581,896    64.38% 
 
Melissa Sturgess          185,794,452        -             -             -        185,794,452      6.46% 
 
Jeremy Sturgess-Smith      1,700,000    10,451,389         -             -        12,151,389       0.42% 
 
Peter Redmond              8,686,743         -             -             -         8,686,743       0.30% 
 
Michael Langoulant         5,949,394         -             -             -         5,949,394       0.21% 
 
Total Concert Party       358,732,485   369,183,874   943,267,874  2,064,163,874 2,064,163,874    71.77% 
 
Ordinary Shares in       1,170,554,572 1,181,005,961 1,755,089,961 2,875,985,961 
issue 
 
Charles Morgan and                                                               2,037,376,348    70.84% 
Melissa Sturgess 
 
 
The issue (and subsequent exercise) of the 2022 Warrants and the issue (and 
subsequent conversion) of the 2022 CLNs would therefore trigger an obligation 
on the Concert Party to make an offer for the Company in accordance with Rule 9 
of the Takeover Code. 
 
The Panel has agreed, however, to waive the obligation for the Concert Party to 
make a general offer that would otherwise arise as a result of the issue (and 
subsequent exercise) of the 2022 Warrants and the issue (and subsequent 
conversion) of the 2022 CLNs, subject to the approval of Independent 
Shareholders, all of whom are independent of the Concert Party. Accordingly, 
Resolution 1 is being proposed at the General Meeting and will be taken on a 
poll of Independent Shareholders. 
 
For so long as the Concert Party holds more than 50 per cent of the Company's 
voting share capital and its members continue to be acting in concert, they may 
increase their aggregate interests in the Ordinary Shares in the Company 
(including through the exercise of the Morgan/Sturgess Options and conversion 
of the Morgan/Sturgess CLNs) without incurring any obligation under Rule 9 to 
make a general offer for the remaining shares, although individual members of 
the Concert Party will not be able to increase their percentage interest in the 
Ordinary Shares of the Company through, or between, a Rule 9 threshold without 
the consent of the Panel. 
 
If the Morgan/Sturgess Options are exercised and the Morgan/Sturgess CLNs are 
converted, the Concert Party would be interested in Ordinary Shares 
representing approximately 72.19 per cent of the voting rights of the Company. 
 
For so long as Charles Morgan holds more than 50 per cent of the Company's 
voting share capital, he may, whether or not the Concert Party still exists, 
increase his interest in the Ordinary Shares in the Company (including through 
the exercise of his share of the Morgan/Sturgess Options and conversion of his 
share of the Morgan/Sturgess CLNs) without incurring any obligation under Rule 
9 to make a general offer for the remaining shares. 
 
The Directors are confident that the resolution to approve the Acquisition will 
be approved by Shareholders at the General Meeting. If, however, for whatever 
reason, Completion does not take place and the Consideration Shares are not 
issued and assuming no other shares are issued and that: (i) the JSS Option is 
exercised by the Concert Party; and (ii) the 2022 Warrants and the 2022 CLNs 
are issued and, respectively, exercised and converted by the Concert Party, the 
Concert Party's aggregate interest in Ordinary Shares would represent 
approximately 81.72 per cent of the voting rights of the Company, as set out in 
the table below. 
 
Concert Party Member       Current   JSS Option   Exercise of  Conversion of    Maximum       Maximum 
                         Holding of              2022 Warrants   2022 CLNs    interest in   percentage 
                          Ordinary                                             Ordinary     interest in 
                           Shares                                               Shares     voting rights 
                                                                               following     following 
                                                                              exercise of   exercise of 
                                                                                the JSS       the JSS 
                                                                              Option and    Option and 
                                                                               the 2022      the 2022 
                                                                             Warrants and  Warrants and 
                                                                             conversion of conversion of 
                                                                             the 2022 CLNs the 2022 CLNs 
 
Charles Morgan           156,601,896      -       574,084,000  1,120,896,000 1,851,581,896    73.30% 
 
Melissa Sturgess         185,794,452      -            -             -        185,794,452      7.36% 
 
Jeremy Sturgess-Smith     1,700,000  10,451,389        -             -        12,151,389       0.48% 
 
Peter Redmond             8,686,743       -            -             -         8,686,743       0.34% 
 
Michael Langoulant        5,949,394       -            -             -         5,949,394       0.24% 
 
Total Concert Party      358,732,485 369,183,874  943,267,874  2,064,163,874 2,064,163,874    81.72% 
 
Ordinary Shares in       820,554,572 831,005,961 1,405,089,961 2,525,985,961 
issue 
 
Charles Morgan and                                                           2,037,376,348    80.66% 
Melissa Sturgess 
 
 
The waiver to which the Panel has agreed under the Code will be invalidated if 
any purchases of Ordinary Shares are made by any member of the Concert Party, 
or any person acting in concert with it, in the period between the date of this 
Document and the General Meeting. 
 
In the event that the Waiver is approved, the Concert Party will not be 
restricted from making an offer for the Company. 
 
6.   Information on the Concert Party 
 
The members of the Concert Party are as follows: 
 
Charles Waite Morgan 
 
Charles Morgan is a venture capitalist. He started his career in futures 
broking in London and worked in merchant banking and stockbroking before 
forming Morgan McFarlane, a licensed securities dealer, following which he 
began investing and being involved in various start-ups in the oil and gas, 
technology and bio-technology sectors. 
 
Charles Morgan is Chairman of Ananda and is the husband of Melissa Sturgess. 
 
Melissa Josephine Sturgess 
 
Melissa Sturgess holds a BSc and an MBA and has many years of experience as a 
director of AIM and Australian Stock Exchange quoted companies, mainly involved 
in the acquisition, structuring and financing of natural resources deals across 
Africa. Melissa Sturgess commenced her career in Australia as a member of the 
Executive Committee of Aquarius Platinum Limited, one of the first Australia/UK 
dual listed companies and a miner of platinum in South Africa and Zimbabwe. 
She was also founding director of Sylvania Resources Limited and a number of 
other companies operating in the metals and mining sector throughout Africa and 
listed on the AIM Market in London. 
 
Melissa Sturgess relocated to London in 2006 and during her career has raised 
significant amounts of capital.  She was a key driver in the successful 
recapitalisation of Messaging International plc during 2016 which subsequently 
changed its name to SigmaRoc Plc, acquired a building materials business via a 
reverse takeover and raised £50 million from a range of investors in the 
Channel Islands and the UK. Melissa Sturgess' interest in the Cannabis sector 
started in 2017 with a trip to Israel to review the Medicinal Cannabis research 
that is happening in that country. 
 
Melissa Sturgess is an Executive Director of Ananda and is the wife of Charles 
Morgan. Melissa Sturgess is a 1.38 per cent shareholder in URA, an African 
focused mineral exploration company, listed on the Standard Market of the 
London Stock Exchange. 
 
Jeremy Edward Sturgess-Smith 
 
Jeremy Sturgess-Smith is the Head of Corporate Finance and Investor Relations 
for Ananda and played a key role in the initial public offering of Ananda in 

July 2018; he also led ? Ananda's acquisition of its initial 50 per cent 
shareholding in DJT Plants in 2019?. In addition to his corporate finance ? 
and investor relations ?responsibilities, Jeremy Sturgess-Smith manages the 
Ananda and DJT Group accounting functions, the audit process, DJT Plants' site 
security arrangements, IT and HR. ? 
 
Jeremy Sturgess-Smith is also the Chief Operating Officer at URA and is a 0.66 
per cent shareholder in that company. Jeremy Sturgess-Smith is the adult son of 
Melissa Sturgess. 
 
Peter Redmond 
 
Peter Redmond is a corporate financier with some 30 years' experience in 
corporate finance and venture capital. He has acted on and assisted a wide 
range of companies to attain a listing over many years, on the Unlisted 
Securities Market, the Full List and AIM, whether by IPO or in many cases via 
reversals, across a wide range of sectors, ranging from technology through 
financial services to natural resources and biotech, in recent years often as a 
director and shareholder of the companies concerned. He has been active over 
many years in corporate rescues and reconstructions on AIM and in reverse 
transactions into a range of investing companies. 
 
He is a director of Hemogenyx Pharmaceuticals plc and URA Investments plc both 
of which have been admitted to the Standard List of the London Stock Exchange; 
he is  a 0.74 per cent shareholder in the latter company.  He is a former 
director of Ananda. 
 
Michael James Langoulant 
 
Michael Langoulant is a Chartered Accountant, corporate and financial adviser 
who specialises in providing corporate financial services to public companies. 
He has over 30 years' experience in public company M&A, corporate 
administration and fundraising. He has acted as finance director, CFO, company 
secretary and non-executive director with a number of publicly listed 
companies. 
 
Michael Langoulant was URA's Company Secretary until 28 October 2022 and is a 
0.31 per cent shareholder in that company. 
 
7.   Intentions of the Concert Party 
 
If the Waiver Resolution is passed by Independent Shareholders on a poll, the 
Directors, including Charles Morgan and Melissa Sturgess, who are members of 
the Concert Party, intend to continue with the Company's research activities 
and Cannabis cultivation, as described in section 2 of this Part I, in 
accordance with the terms of the Licence. 
 
No member of the Concert Party has any intention to make any changes in 
relation to: 
 
·    the future business or strategic plans of the Group; 
 
·    any research and development activities of the Group; 
 
·    the continued employment of the Company's employees and management, 
including any change in the conditions of employment or in the balance of the 
skills and functions of the employees and management; 
 
·    the locations of the Group's places of business, including the location of 
the Company's headquarters and headquarters functions; 
 
·    employer contributions into the Company's pension scheme (including with 
regard to current arrangements for the funding of any scheme deficit), the 
accruals of benefits for existing members and the admission of new members; 
 
·    the redeployment of any fixed assets of the Company; or 
 
·    the maintenance of any existing trading facilities for the Ordinary Shares 
after completion of the Debt Proposals and the Waiver. 
 
If the Waiver Resolution is passed by Independent Shareholders on a poll, there 
is no agreement, arrangement or understanding for the transfer by any member of 
the Concert Party of Ordinary Shares to any third party. 
 
8.   Background to and Reasons for the Acquisition 
 
Ananda's ambition is to be a leading UK-based grower and supplier of 
consistent, high-quality and Carbon Zero Medical Cannabis for the UK and 
international markets. 
 
The Directors believe that the Acquisition presents the Company with a clear 
opportunity to cultivate Cannabis for research purposes, and later for 
commercial purposes, with 100 per cent ownership of the Licence. The Directors 
believe that the significant barriers to entry in obtaining a licence will make 
the Licence a valuable asset of the Company. The Directors also believe that 
the Acquisition will, in due course, allow Ananda to more readily participate 
in the expanding UK market for patients using Medical Cannabis as an unlicensed 
medical product. 
 
In particular, the Directors believe that the Acquisition has the potential to 
deliver the following important advantages to Ananda and the Group: 
 
·    any knowhow and Intellectual Property developed through the research 
process will be wholly owned by the Company; 
 
·    ownership, management and operation of the Licence and the associated 
business will be consolidated in a single entity; 
 
·    the Group's working capital requirements can be managed directly by Ananda 
through to  DJT Plants; 
 
·    the senior management at Anglia and Jepco have direct experience of 
growing Medical Cannabis in the UK, as well as extensive specialist 
horticultural experience and a track record in horticultural innovation; and 
 
·    through the Services Agreements (see section 9 of this Part I), Ananda 
will have access to the systems and growing and agronomic operational know how 
of JEPCO  on contracted terms, allowing the Company to cost effectively and 
efficiently execute its strategy. JEPCO has expertise and experience in covered 
growing and harvesting, which can be drawn on by DJT Plants; and 
 
·    100 per cent of potential commercial growing revenues will be captured in 
Ananda. 
 
Moreover, unlike the high capital and operating cost facilities operated by 
most other Cannabis producers, DJT Plants grows Cannabis in multi-chapelle 
structures without artificial light and heat. Anglia Salads and DJT Plants 
successfully cultivated Cannabis in this way for GW Pharma from 2014 to 2017, 
achieving a yield of 700g/m2, with consistent quality, in a single, natural 
season. 
 
In addition, the Directors and the Proposed Director believe that DJT Plants 
will be able to grow Medical Cannabis in UK conditions in a Carbon Zero manner. 
Currently, the carbon footprint in the United States of 1kg of Medical Cannabis 
(which will supply 3 patients for 1 year) is between 2 and 5 tonnes of CO2. 
 
The Directors also believe that a UK source of consistent, high quality, Carbon 
Zero, Medical Cannabis, such as DJT Plants intends to grow and produce, will be 
well received, given the growing market for Medical Cannabis and the concerns 
around consistency and quality expressed by prescribing doctors and patients. 
 
For the reasons set out above, the Directors believe that the Acquisition 
represents an opportunity to create Shareholder value and is therefore in the 
best interests of the Company and its Shareholders. 
 
9.   Further Information about the Acquisition 
 
The Acquisition Agreement 
 
As announced on 18 October 2022, the terms of the Acquisition Agreement have 
been revised as the Acquisition has taken longer than initially contemplated 
and the process has evolved beyond the scope and costs envisioned under the 
Heads of Terms announced on 8 June 2021. 
 
Accordingly, pursuant to the Acquisition Agreement, Ananda will now acquire the 
50 ordinary shares of £1.00 each in DJT Group, which it does not currently own, 
from Anglia Salads, for consideration of £3.2 million (previously £7.3 
million), which will be satisfied by the allotment of 350,000,000 (previously 
790,538,866) Consideration Shares. 
 
The Consideration Shares are still being valued at 0.925p per share, the price 
prevailing at 8 June 2021, and will represent 29.90 per cent of the Company's 
Enlarged Share Capital. The reduced consideration means that the Acquisition no 
longer requires a waiver under Rule 9. However, given the size of the 
Acquisition relative to Ananda, the Acquisition is still  conditional, amongst 
other things, on approval by Shareholders at the General Meeting. 
 
Although the consideration has been revised, the Directors continue to believe 
that DJT Plants has the potential to generate significant value and future 
revenues for the Company. 
 
Further information about the Acquisition Agreement is set out in section 4.3 
of Part II of this Document. 
 
Services Agreements 
 
Anglia Salads and JEPCO have significant horticultural knowledge, experience, 
systems and expertise, which they will provide to DJT Plants under the terms of 
the Services Agreements via JEPCO and another associated, company, JML. The 
Directors believe these systems will be extremely advantageous for the 
effective execution of the Company's plans, the maintenance of standard 
operating procedures and other quality procedures necessary for the maintenance 
of the Licence and the cultivation of >0.2% THC Cannabis. 
 
Pursuant to the Sub-lease, DJT Plants has agreed to lease the land and 
buildings which are the site of the research facility. The Sub-lease has an 
initial term ending in September 2039 and contains an option to expand the size 
of the facility and growing area for commercial growing purposes. Whilst the 
delay in completing the Acquisition has been frustrating, it has nevertheless 
enabled the Company to secure long-term tenure through the Sub-lease. 
 
Further information about the Services Agreements is set out in sections 4.4 
and 4.5 of Part II of this Document. 
 
Lock-in and Orderly Market Deed 
 
Pursuant to the Lock-in and Orderly Market Deed, Anglia Salads will undertake 
that it will not, for a period of 36 months from the date of issue of the 
Consideration Shares (the "Lock-In Period"), dispose of any of those shares, 
save in certain specified circumstances. In addition, for a period of 12 months 
after the end of the Lock-in Period, Anglia Salads will also undertake not to 
dispose of any of the Consideration Shares, without first consulting with the 
Company and Peterhouse, with a view to maintaining an orderly market in the 
share capital of the Company. 
 

Further information about the Lock-in and Orderly Market Deed is set out in 
section 4.6 of Part II of this Document. 
 
The Anglia Concert Party 
 
On completion of the Acquisition, Anglia Salads will be interested in Ordinary 
Shares representing 29.90 per cent of the Enlarged Share Capital. The issue of 
the Consideration Shares therefore does not require a waiver under Rule 9 of 
the Code. 
 
However, under the Takeover Code, the directors of a company are presumed to be 
acting in concert with the company of which they are a director. Accordingly, 
Simon Goddard and Stuart Piccaver, both of whom are Directors of Anglia Salads, 
are presumed to be acting in concert with Anglia Salads, as is JEPCO, as a 
company controlled by Stuart Piccaver, which is also a shareholder in Anglia 
Salads.  For so long as the Anglia Concert Party is deemed to exist, the Anglia 
Concert Party and its members will be subject to the restrictions set out in 
section 4 of this Part I. 
 
10. Board Changes 
 
It is proposed that Stuart Piccaver, the Chief Executive Officer of JEPCO and a 
director of Anglia Salads, will be appointed as an executive Director of Ananda 
on Completion. With a background and interest in marketing and innovation, 
Stuart Piccaver has considerable horticultural experience and direct experience 
of Cannabis cultivation and has been the driving force for many of the leading 
agricultural initiatives and successes of JEPCO and its associated companies. 
 
From a standing start in July 2014, Stuart Piccaver led the team that proved a 
concept to grow natural season cannabinoids in the UK, lowering the cost of 
production by 78 per cent. The project grew 5 hectares under cover to fully 
assess and master the dynamics of UK production. The project proved its 
feasibility and created a growing blueprint for a highly scalable production 
technique. 
 
Also on Completion, Dr Inbar Pomeranchik, who is currently an executive 
Director, will become a Non-executive Director. 
 
11. Application to the AQSE Growth Market 
 
Application will be made for the Consideration Shares to be admitted to trading 
on the Access segment of the AQSE Growth Market. It is expected that Admission 
will become effective on 20 December 2022. 
 
The Consideration Shares will, on Admission, rank pari passu in all respects 
with the Ordinary Shares and will rank in full for all dividends and other 
distributions hereafter declared, paid or made on the ordinary share capital of 
the Company. 
 
12. General Meeting 
 
Set out at the end of this Document is the notice convening the General Meeting 
to be held at the offices of Memery Crystal, 165 Fleet Street, London EC4A 2DY 
at 11.00 a.m. on 19 December 2022, at which the following resolutions will be 
proposed as ordinary resolutions: 
 
              Resolution 1 - to approve the Waiver; and 
 
              Resolution 2 - to approve the Acquisition and the allotment of 
the Consideration Shares. 
 
The passing of Resolution 1, the Waiver Resolution, must be approved by 
Independent Shareholders on a poll, and each Independent Shareholder will be 
entitled to one vote for each Ordinary Share held. The passing of the Waiver 
Resolution will require the approval by Independent Shareholders by way of 
simple majority. Resolution 2 will require the approval of Shareholders by way 
of a simple majority. The members of the Concert Party will not vote on 
Resolution 1 to be proposed at the General Meeting. Resolutions 1 and 2 are not 
inter-conditional. 
 
13. Action to be Taken 
 
A Form of Proxy for use at the General Meeting is enclosed with this Document. 
The Form of Proxy should be completed and signed in accordance with the 
instructions thereon and returned to the Company's Registrars, SLC Registrars, 
P.O. Box 5222, Lancing, BN99 9FG, as soon as possible, but in any event so as 
to be received by no later than 11.00 a.m. on 15 December 2022. The completion 
and return of a Form of Proxy will not preclude Shareholders from attending the 
General Meeting and voting in person should they so wish. 
 
14. Additional Information 
 
Shareholders' attention is drawn to the additional information in Parts II and 
III of this Document. 
 
15. Recommendation 
 
For the reasons set out in this Document, the Independent Directors, namely Dr 
Inbar Pomeranchik and John Treacy, who have been so advised by Peterhouse, 
believe that the Debt Proposals and the Waiver are fair and reasonable and in 
the best interests of the Company and its Shareholders as a whole. In providing 
advice to the Independent Directors, Peterhouse has taken into account the 
Independent Directors' commercial assessments. 
 
Accordingly, the Independent Directors recommend that Independent Shareholders 
vote in favour of Resolution 1, the Waiver Resolution, to be proposed at the 
General Meeting. 
 
For the reasons set out in this Document, the Directors believe that the 
Acquisition is in the best interest of the Company and its Shareholders as a 
whole. 
 
Accordingly, the Directors unanimously recommend that Shareholders vote in 
favour of Resolution 2 to be proposed at the General Meeting, as they intend to 
do in respect of the 328,795,951 Ordinary Shares that they collectively hold, 
representing 41.72 per cent of the Issued Share Capital. 
 
Yours faithfully 
 
Dr Inbar Pomeranchik 
                                      John Treacy" 
 
                                    -Ends- 
 
The Directors of the Company accept responsibility for the contents of this 
announcement. 
 
ANANDA DEVELOPMENTS PLC                                 [phone] 
                                                  [e-mail] 
Chief Executive Officer 
Melissa Sturgess 
 
Investor Relations 
Jeremy Sturgess-Smith 
 
PETERHOUSE CAPITAL LIMTED                               [phone] 
 
Corporate Finance 
Mark Anwyl 
 
Corporate Broking 
Lucy Williams 
Duncan Vasey 
 
About Ananda Developments 
 
Ananda is an AQSE-listed medical cannabis company creating UK-based operations 
to grow and provide carbon zero, consistent, medical cannabis for the UK and 
international markets. 
 
For more information, please visit: https://anandadevelopments.com 
 
Market Abuse Regulation (MAR) Disclosure 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information. Upon the publication of this announcement via a 
Regulatory Information Service, this inside information is now considered to be 
in the public domain. 
 
Peterhouse Capital Limited 
 
Peterhouse Capital Limited, which is authorised and regulated by the Financial 
Conduct Authority, is acting exclusively for the Company and no-one else in 
connection with the matters described in this announcement and the Circular. 
Peterhouse Capital Limited is not, and will not be, responsible to anyone other 
than the Company for providing the protections afforded to the clients of 
Peterhouse Capital Limited or for providing advice in relation to the matters 
described in this announcement and the Circular. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

November 24, 2022 05:23 ET (10:23 GMT)