Apollon Formularies plc Notice of General Meeting (9760S)

TIDMAPOL

RNS Number : 9760S

Apollon Formularies plc

15 March 2023

15 March 2023

Apollon Formularies Plc

Notice of General Meeting

Proposed Disposal of Tangible and Intangible Assets of Apollon

Apollon Formularies plc (AQSE: APOL, "Apollon" or the "Company") , a UK based international pharmaceutical company trading on the Aquis Stock Exchange, that is licenced to research, develop, process, and sell medical cannabis therapeutic products that include legal medical cannabis to treat various illnesses under medical supervision, is pleased to announce, further to the announcement of 12 January 2023, that it is today posting a Notice of General Meeting, in order to seek approval for, amongst other things, the disposal of all the tangible and intangible assets and approval of the Company's proposed investment strategy in the cannabis sector.

Notice is hereby given that the General Meeting will be held on 11 April 2023 at 10 a.m. at The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW.

A copy of the Chief Executive Officer's letter, the expected timetable of principal events and definitions sections contained in the Circular, are set out in full below in this announcement without material amendment or adjustment.

A copy of the Circular will shortly be available at: https://apollon.org.uk/

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

For additional information, please visit www.apollon.org.uk or contact:

Apollon Formularies

Tel: [phone]

Stene Jacobs [e-mail]

Peterhouse Capital Limited (Corporate Adviser)

Tel: [phone]

Guy Miller [e-mail]

BlytheRay (Financial PR/IR-London)

Tel: [phone]

   Tim Blythe/Megan Ray/Matt Bowld                      [e-mail] 

(Incorporated in the Isle of Man with company number 002845V)

 
 Directors:                                     Registered Office: 
 Stephen D Barnhill, M.D. (Chief Executive      Quayside House 
  Officer)                                       6 Hope Street 
  Nicholas Ingrassia (Non-Executive Director)    Castleton 
  Nicholas Barnhill (Non-Executive Director)     Isle of Man, IM9 2AS 
  Roderick McIllree (Non-Executive Director) 
  Herb Fritsche (Executive Director) 
 

Notice of General Meeting

AND

Disposal of Assets and Licenses

Change of Investment Strategy

15 March 2023

To the Shareholders and, for information only, to the Option Holders and Warrant Holders

   1.    Introduction 

This Circular sets out the background to and reasons for the Disposal, the adoption of a new business strategy and other matters to be proposed at the General Meeting which is to be held at The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW on 11 April 2023 at 10 a.m .

On 9 January 2023, Global Hemp Group Inc. ("GHG") entered into a binding letter of intent ("LOI") with the Company, pursuant to which the Company granted a perpetual exclusive licence of certain intellectual property for use in Canada, the United States and Mexico, in exchange for 10,000,000 GHG Shares and a payment of US$250,000.

The LOI also provided for a due diligence period of 60 days. If both parties are satisfied with the results of the due diligence, GHG will have the exclusive option to acquire all the Assets of Apollon, other than cash, cash equivalents, and receivables, for a payment of 771,191,266 GHG common shares at a deemed price of $0.015 CAD per GHG common share, for a total consideration of $11,567,869 CAD.

Accordingly, the Board intends to seek shareholder approval to dispose of the Assets of the Company.

If Shareholders approve the Disposal of the Assets, the Company will adopt an investment strategy, further described in paragraph 5 below. The Board intends to distribute GHG common shares to the Company's shareholders, subject to, applicable laws, while holding back sufficient GHG common shares to sell in an orderly fashion to pay any outstanding Company's debt. In the event of such in-specie distribution, a further announcement and Shareholder circular will be produced in due course.

   2.    Information on Global Hemp Group Inc. 

Global Hemp Group Inc. (Canadian Securities Exchange symbol: GHG) is focused on executing a multi-phased strategy to become a leader in the industrial hemp industry in the United States. The Company is headquartered in Vancouver, British Columbia. The current phase of the strategy focuses on the development of "sustainable" and "green" value-added industrial hemp products utilising the processing of the entirety of the hemp plant for multi-merchantable applications. The Hemp Agro-Industrial Zone ("HAIZ") is the next phase of the Company's business strategy, which utilises the exceptional properties of the hemp plant for the production of raw materials and other value-added products, assembled in a centralized location adjacent to the hemp farming activity.

To further support and innovate the HAIZ, Global Hemp Group has established a Research and Development Division to actively pursue the development of Intellectual Property that can be patented for implementation at its projects and beyond. The Division is led by Prof. Víctor M. Castaño, Ph.D. from the National Autonomous University of Mexico (UNAM), a highly recognised leader in areas of applied science and technology. The R&D team brings a wealth of knowledge and experience in multiple disciplines and will initially focus on development of Environmentally Friendly Construction Materials, Nanofertilizers and Enhanced Extraction from Hemp.

   3.    Background to and reasons for the Proposals 

In light of Apollon Jamaica's significant Jamaican operations, Apollon is one of very few natural biologic drug development companies globally that is a publicly traded company, legally licensed to work with full spectrum high THC cannabis, in a fully licensed and legal environment that can perform drug discovery, execute pre-clinical testing, perform human clinical trials, provide immediate direct human availability of these treatments by physician prescription, has an International Cancer and Chronic Pain Institute, and is approved to export our products globally where legally allowed.

Global customers, including potential partners like Big Pharma, seeking natural biologic products and partnerships can look to companies like Apollon that will have patent protected formulations, validated by pre-clinical and human clinical trial data, rather than companies with random medical cannabis and mushroom based products without this level of scientific rigour and intellectual property protection.

Pursuant to the binding LOI and a subsequent License Agreement dated 19 January 2023 , GHG acquired the exclusive perpetual licence for North America (specifically, the United States, Canada and Mexico) to certain Apollon Intellectual Property and proprietary technology. This includes, but is not limited to, four key patent applications as described below, including any continuations, divisional, and continuations-in-part, along with the use of any and all associated preclinical and clinical data relating to the patents and proprietary technology (the "IP"). The consideration was 10,000,000 GHG common shares and US$250,000, which was advanced during the 60 day due diligence period once GHG's common shares resumed trading on the Canadian Securities Exchange (CSE). All GHG common shares issued to the Company pursuant to the transaction will have a hold period of four (4) months plus one (1) day.

The patents are registered under the International Patent System (PCT) and are also registered in Jamaica. This exclusive perpetual licence will cover Canada, the United States and Mexico, for the four patents below and all associated supporting data:

   --             Compositions and Methods for Treatment of Cancers; 
   --             Compositions and Methods for Treatment of Inflammation; 
   --             Methods for Treatment of Human Cancers Using Cannabis Compositions; 
   --             Methods for Treatment of Human Cancers Using Mushroom Compositions; 

GHG has also engaged Dr. Stephen Barnhill, the creator of the licensed patents, as Special Medical Advisor to assist it in monetising the intellectual property.

   4.    The Disposal 

If GHG and the Company are satisfied with their due diligence reviews, GHG will also acquire the Assets, including full ownership of the four patent applications listed above. In summary, the Disposal will also consist of:

- The BIOENSIS preclinical data reflecting the independent testing of cannabis and mushroom formulations is included in the Disposal. Further details of the testing undertaken by BIOENSIS, an independent pre-clinical predictive pharmaceutical testing laboratory, can be found in the announcement of 18 May 2021.

- The Company's contract right to receive a 49% equity interest in Apollon Jamaica, subject to approval by the CLA.

   -     The Company's contract right to receive 95% of the net profits of Apollon Jamaica. 

The consideration payable for all the assets of Apollon, other than cash, cash equivalents, and receivables, is 771,191,266 GHG common shares at a deemed price of $0.015 per GHG common share, for a total consideration of C$11,567,869.

   5.    Investment Strategy 

On passing of the Resolutions, the Company will become an Enterprise Company. The Company intends to remain an Enterprise Company which may invest in the developing market for medicinal or therapeutic Cannabis based medicinal products (CBMP's), in legal jurisdictions.

The main business activities of the Company will be its investments into those companies or projects conducting the lawful production of and research into Medicinal Cannabis in jurisdictions that are internationally recognised as having well-developed and reputable laws and regulations for the research and production of Cannabis and comply with the United Nation's conventions on narcotics. The Board is aware of its legal duty to ensure that such activities are lawful and as such, will carefully consider each proposed investment to be made and its compliance with UK legislation and seek appropriate legal advice in the UK and the jurisdictions prior to completing any investment.

As described in paragraph 1 above, the Board intends to distribute GHG common shares to the Company's shareholders, subject to, applicable laws, while holding back sufficient GHG common shares to sell in an orderly fashion to pay any outstanding Company's debt. In the event of such in-specie distribution, a further announcement and Shareholder circular will be produced in due course.

Pursuant to the AQSE Growth Market Access Rulebook, if the Company has not implemented its investment strategy within two years of becoming an Enterprise Company, the Aquis Stock Exchange may suspend trading in the Company's Ordinary Shares.

   6.    Investment Committee and Investment Identification 

The Investment Committee will be comprised of Stephen D. Barnhill, M.D., Roderick McIllree and Stene Jacobs, the current non-main Board Chief Operation Officer of the Company. It has been established to allocate and invest capital. It will be responsible for commissioning appropriate technical, financial and legal due diligence on prospective investments, investment monitoring and reporting to the full Board on a regular basis. Professional advisers will be consulted, as required, on relevant technical and scientific matters and together with the Investment Committee may seek further technical and scientific advice.

Investment identification will be the responsibility of the Investment Committee.

As part of each investment analysis, the Investment Committee will liaise with and, if necessary, instruct Counsel to produce a legal opinion relating to the terms and lawfulness of the Company's proposed investment in the particular jurisdiction. The Investment Committee will review Counsel's opinion to identify whether the investment is in line with a UK Counsel's legal opinion in relation to the same matter and if necessary seek further UK legal advice. The Investment Committee will heed the advice provided by Counsel where the advice given reflects any negative legal or regulatory risks and will decline the proposed investment in such cases. In particular, the Investment Committee will seek to ensure that there is as little risk as possible of breaching POCA 2002, MDA 1971, MDDO 2001 and MDR 2001. The Investment Committee will also seek to avoid any risk of breaching Money Laundering legislation and will seek to ensure that any prospective future dividends will not contravene any laws, having particular regard to whether there may be any breach of POCA 2002.

Once the Investment Committee, with the assistance of a professional person, when required, has completed due diligence on a prospective investment, it will present its findings to the Non-Executive Directors for the full Board's review. The Non-Executive Directors will in turn provide comments and recommendations to the Board as to whether the Company should pursue the prospective investment.

   7.    General Meeting 

Set out at the end of this Document is a Notice of General Meeting, convening at The Broadgate Tower, 20 Primrose Street, London, EC2A 2EW on 11 April 2023 at 10 a.m., at which the following resolutions will be proposed:

Special business at the General Meeting

Resolution 1 is a special resolution seeking Shareholder approval for the Disposal of the Assets of Apollon, other than cash, cash equivalents, and receivables.

Resolution 2 is a special resolution seeking Shareholder approval for the change in investment strategy.

A Form of Proxy for use at the General Meeting is enclosed. Please complete and sign the Form of Proxy and return it to the Company's Registrars so as to arrive to Share Registrars Limited at 3 The Millennium Centre, Crosby Way, Farnham, GU9 7XX or by e-mail to [e-mail] no later than 48 hours (excluding non-working days) before the time fixed for the General Meeting.

   8.    Board Recommendation 

The Board considers that both of the Resolutions are in the best interests of the Company and its Shareholders as a whole, and it unanimously recommends to Shareholders that they should vote in favour of each Resolution, as the Directors intend to do in respect of their own Ordinary Shares, amounting to in aggregate 394,526,066 Ordinary Shares.

Yours faithfully

Stephen D. Barnhill, M.D.

Chief Executive Officer

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of this Document                   15 March 2023 
 Latest time and date for receipt of Forms      10:00 a.m. on 
  of Proxy in respect of the General Meeting     5 April 2023 
 Record Date for the General Meeting            10:00 a.m. on 
                                                 5 April 2023 
 General Meeting                                10:00 a.m. on 
                                                11 April 2023 
 Proposals become effective                     12 April 2023 
 

DEFINITIONS

 
 "Act"                        the Companies Act, as amended; 
 "Apollon Jamaica"            Apollon Formularies Jamaica Limited, 
                               a private company registered in Jamaica 
                               with company number 92237 whose registered 
                               office is in Jamaica; 
 "Aquis Stock Exchange"       Aquis Stock Exchange Limited; 
 AQSE Growth Market           the multilateral trading facility operated 
                               by Aquis Stock Exchange that is registered 
                               as an SME Growth Market in accordance 
                               with article 33 of MiFID; 
 "AQSE Growth Market Access   the rules of the Access segment of the 
  Rulebook"                    AQSE Growth Market revised in December 
                               2021, as revised or amended from time 
                               to time; 
 "Articles" or "Articles      the articles of association of the Company 
  of Association"              from time to time; 
 "Assets"                     all tangible and intangible assets of 
                               the Company, excluding any cash, cash 
                               equivalents or receivables, to be disposed 
                               of pursuant to the Disposal; 
 "Asset Purchase Agreement"   the conditional asset purchase agreement 
                               to be entered into between Global Hemp 
                               Group Inc. and the Company in respect 
                               of the Disposal, to be entered into 
                               during the 60 days due diligence, and 
                               will contain the terms and conditions 
                               set out in the Letter of Intent; 
 "Board" or "Directors"       the directors of the Company at the 
                               date of this Document whose names are 
                               set out on page 5 of this Document; 
 "Business"                   the business of Apollon, further details 
                               described in paragraph 4 of the Chief 
                               Executive Officer's letter; 
 "Circular" or "Document"     this document and its contents; 
 "Company" or "Apollon"       Apollon Formularies Plc, a public limited 
                               liability company incorporated and registered 
                               in the Isle of Man with company number 
                               002845V and registered office address 
                               at Quayside House, 6 Hope Street, Castletown, 
                               Isle of Man, IM9 2AS; 
 "CLA"                        the Cannabis Licensing Authority of 
                               Jamaica; 
 "Directors"                  the current directors as at the date 
                               of this Document; 
 "Disposal"                   the proposed disposal of the assets 
                               and licenses, further detailed in paragraph 
                               4 of the Chief Executive Officer's letter; 
 "Issued Share Capital"       the issued ordinary share capital of 
                               the Company, as enlarged by the issue 
                               of the Subscription Shares; 
 "Existing Shareholders"      holders of Ordinary Shares at the time 
                               of the General Meeting; 
 "FCA"                        the Financial Conduct Authority; 
 
 "Form of Proxy"              the form of proxy accompanying the Circular 
                               for use at the General Meeting; 
 "General Meeting"            the General Meeting of Shareholders 
                               to be held at 10:00 a.m. on 11 April 
                               2023 at The Broadgate Tower, 20 Primrose 
                               Street, London, EC2A 2EW ; 
 "Global Hemp Group"          Global Hemp Group Inc., a company incorporated 
                               in Canada with a registered address 
                               at 106 - 1169 Mt. Seymour Road, North 
                               Vancouver, BC V7H 2Y4; 
 "Investment Strategy"        the investment strategy of the Company, 
                               following the Disposal of the Business 
                               as required by the AQSE Growth Market 
                               Access Rulebook and as set out in this 
                               Circular; 
 "Letter of Intent" or        Binding letter of intent executed on 

  "LOI"                        9 January 2023, for the disposal of 
                               the Business, further details outlined 
                               in paragraph 4 of the Chief Executive 
                               Officer's letter; 
 "Licences"                   the medical cannabis licences granted 
                               to Apollon Jamaica by the CLA; 
 "Medicinal Cannabis"         the use of cannabis and its constituent 
                               cannabinoids to treat disease or improve 
                               symptoms such as pain, muscle spasticity, 
                               nausea and other indications; 
 "MDA 1971"                   The Misuse of Drugs Act 1971; 
 "MDR 2001"                   The Misuse of Drugs Regulations 2001 
                               (S.I. 2001/3998); 
 "MDDO 2001"                  The Misuse of Drugs (Designation) Order 
                               2001; 
 "Ordinary Shares"            the ordinary shares in the capital of 
                               the Company of no par value each; 
 "Peterhouse"                 Peterhouse Capital Limited, a company 
                               incorporated in England and Wales with 
                               company number 02075091 (authorised 
                               by the FCA with firm reference number 
                               184761); 
 "POCA 2002"                  Proceeds of Crime Act 2002; 
 "Proposals"                  The proposals set out in this Circular, 
                               whereby Shareholders are being asked 
                               to consider and, if thought fit, approve; 
                               (i) the Disposal, and (ii) the investment 
                               strategy; 
 "Resolutions"                the resolutions set out in the notice 
                               of General Meeting contained within 
                               the Circular; 
 "Shareholders"               holders of Ordinary Shares in the Company 
                               from time to time; 
 "Sterling" or "GBP"          the lawful currency of the UK; 
 "UK Counsel"                 Legal counsel appropriately qualified 
                               in England and Wales; 
 "UK" or "United Kingdom"     the United Kingdom of Great Britain 
                               and Northern Ireland; 
 "US" or "United States"      the United States of America, its territories 
                               and possessions, any states of the United 
                               States of America and the District of 
                               Columbia and all other areas subject 
                               to its jurisdiction. 
 
 

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March 15, 2023 03:00 ET (07:00 GMT)