CS MEDICA A/S signs second LoI with investor about a directed issue of 60 MDKK shares at a share price of DKK 31,50 per share

CS MEDICA A/S (“CS Medica” or the “Company”) signs Letter Of Intent (LoI) with Inner Mongolia Rong Shi Hi-Tech Co., Ltd regarding a directed issue of 60 MDKK shares at a price of 31.50 DKK

Following the company’s Investment strategy and their intensified discussion with potential investors, notified the 18th of august 2022, CS MEDICA has now signed the second letter of intent with Inner Mongolia Rong Shi Hi-Tech Co. (”new Investor”), Company reg. no. 91150602MABU2TL08D, regarding a directed issue of 1,904,762 shares in the Company (the “Shares”), equal to aprox. 14% of the Company’s share capital on a non-diluted, post money basis. The Shares are subscribed at a subscription price of DKK 31.50 per share. Consequently, the New Investor shall pay a total cash amount of DKK 60,000,003 for the Shares (the “Investment”).

Inner Mongolia Rong Shi Hi-Tech Co., Ltd is part of a group within coal trade, with a turnover in 2021 of 850M RMB (893 MDKK). The new Investor is a potential partner for CS MEDICA when entering the Asian market, and the Investment oppertunity has according to the LoI background in the following expectations;

The Parties will evaluate the possibilities for setting up a joint venture (“Joint Venture”) in Erdos city, Inner Mongolia, China.  The joint venture will be a production company facilitating the production and delivery of the CANNASEN® product line to the Asian market.

1. The company will deliver all know how related to the acquisition and installation of the production line, as well as product related quality assurance according to ISO 13485 and approvals associated to the ongoing production. Furthermore, the company will deliver all product and production instructions related to the ongoing production.
2. The investor will be responsible for the installation and funding of the production line.  After finalising the installation, the Investor will be responsible for the ongoing production processes according to instructions from the Company.  Furthermore, the Investor will handle all coordination with and approvals by legal authorities related to the product line installation and commissioning.  Additionally, the Investor will investigate the possibilities for grant and subsidiaries from the Chinese government within the COVID-19 area, covering the CANNASEN® CBD Protective nasal gel combined with the CANNASEN® Protective Lozenges.
3. Both parties will jointly secure local approvals in the Asian markets.

Lone Henriksen, CEO CS MEDICA comments;

“We are happy to have this huge investment interest from the Asian market, and Inner Mongolia Rong Shi Hi-Tech Co. as well as us are aiming for a quick due diligence as we hope to get into operation as soon as possible.”

The first LoI, signed with Heilongjiang FuYu ShengKun Textile Industry Co. previous published the 25^th of August 2022, is still ongoing in the latter part of the due diligence phase.

CS MEDICA’S investment strategy also include funding from continental distributors, as this strategy assures the continental distributors having an increased interest in achieving success in their own market penetration as well as in the future operation of CS MEDICA.

During the due diligence CS MEDICA will evaluate each partner, to secure the best possible investment match. 

The basis for both Investor’s contemplated investment in the Company is a valuation based on the previously approved share prices at the TO series, in this case the TO3 share price, approved at the EGM the 3rd of February 2022.  The Investment is conditional upon the New Investor finalizing the due diligence, without any findings, that may prevent the completion of the Investment, or that the Investor does not receive proper authorization in China to carry out the investment. 

Completion of the Investment Agreement is subject to the approval on an extraordinary general meeting (the “General Meeting”).

The board of directors support the Direct issue, but the issue's implementation presupposes the approval at an extraordinary general meeting in the Company which is expected to be held later this year.

This disclosure contains information that CS MEDICA A/S is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 29-09-2022 18:15 CET.

For more information about CS MEDICA, please contact:
Lone Henriksen, CEO
Phone: + (45) 71 20 30 47
Email: lh@cs-medica.com
Website: https://www.cs-medica.com/

CS MEDICA A/S is a Danish medico cannabis company founded in 2011. CS MEDICA is committed to developing, manufacturing, and commercializing over-the-counter (OTC) medical device products containing cannabinoids. The Company runs its business through the two fully-owned subsidiaries, Galaxa Pharma A/S (distributor and representative of foreign manufacturers in the Nordic, registered medical device product distributor) and CanNordic A/S (Medical device developer and seller (BtB), registered medical device product manufacturer). CS MEDICA distributes products across the European borders and is headquartered in Copenhagen, Denmark.

The company is listed on Spotlight Stock Market in Stockholm (symbol: “CSMED”). For more information about CS MEDICA cs-medica.com.

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