|
|
Ontario, Canada
|
2833
|
Not Applicable
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification No.)
|
Rebecca G. DiStefano
Greenberg Traurig, P.A.
401 East Las Olas Boulevard, Suite 2000 Fort Lauderdale, Florida 33301 Tel: +1 (954) 768-8221 Fax: +1 (561) 338-7099 |
Michael Rennie
Wildeboer Dellelce LLP
365 Bay Street, Suite 800
Toronto, Ontario M5H 2V1
Tel: +1 (416) 361-4781
Fax: +1 (416) 361-1790
|
Louis A. Bevilacqua
Bevilacqua PLLC
1050 Connecticut Ave., NW, Suite 500
Washington, DC 20036
Tel: +1 (202) 869-0888
Fax: +1 (202) 869-0889
|
† |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
|
Title of each class of
securities to be registered |
Amount to be registered
|
Proposed maximum
offering price per Common Share |
Proposed maximum
aggregate offering price |
Amount of
registration fee |
Common Shares(1)(2)
|
3,833,333 |
$4.50(6)
|
$17,250,000
|
$1,881.98
|
Common Shares (3)
|
1,972,800 |
-
|
-
|
-
|
Underwriters’ Warrants(4)
|
- |
-
|
-
|
-
|
Common Shares underlying Underwriters’ Warrants(5)
|
268,333 |
$5.63
|
$1,510,715
|
$164.82
|
Total
|
|
$18,760,715
|
$2,046.79
|
(1)
|
Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(a) under the under the Securities Act of 1933, as amended (the “Securities Act”). Includes the
Common Shares that the underwriters have the option to purchase to cover any over-allotments. See “Underwriting.”
|
(2)
|
Pursuant to Rule 416 under the Securities Act, there is also being registered hereby such indeterminate number of additional Common Shares of the Registrant as may be issued or issuable because of stock
splits, stock dividends, stock distributions, and similar transactions.
|
(3)
|
This Registration Statement also covers the resale under a separate resale prospectus (the “Resale Prospectus”) by selling shareholders of the Registrant of 1,315,200 common shares and up to 657,600 common
shares underlying warrants issued to the selling shareholders as named in the Resale Prospectus.
|
(4)
|
No fee required pursuant to Rule 457(g) of the Securities Act.
|
(5) | Represents underwriters’ warrants to purchase up to an aggregate of seven percent (7%) of the Common Shares sold in the offering at an exercise price equal to one hundred twenty-five percent (125%) of the public offering price. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act, the proposed maximum aggregate offering price of the underwriters’ warrants is $5.63. The underwriters’ warrants will be exercisable upon issuance, will have a cashless exercise provision and will terminate on the fifth anniversary of the effective date of the registration statement of which this prospectus is a part. The underwriters’ warrants are not exercisable or convertible for more than five years from the commencement of sales of the public offering. |
(6)
|
The assumed offering price of $4.50 per share is the midpoint of the price range set forth on the cover page of this prospectus.
|
•
|
Public Offering Prospectus. A prospectus to be used for the public offering of 3,333,333 common shares of the Registrant, as well as up to an additional 500,000 common shares if the underwriters exercise
in full their over-allotment option (the “Public Offering Prospectus”), through the underwriter named on the cover page of the Public Offering Prospectus.
|
•
|
The Resale Prospectus. A prospectus to be used for the resale by selling shareholders of 1,315,200 common shares (438,400 shares post-split) and up to 657,600 common shares underlying warrants (219,200
shares post-split) of the Registrant (the “Resale Prospectus”).
|
•
|
they contain different outside and inside front covers;
|
•
|
they contain different Offering sections in the Prospectus Summary section beginning on page 1;
|
•
|
they contain different Use of Proceeds sections on page 41;
|
•
|
a Selling Shareholders section is included in the Resale Prospectus;
|
•
|
a Selling Shareholders Plan of Distribution is included in the Resale Prospectus; and
|
•
|
the Legal Matters section in the Resale Prospectus deletes the reference to counsel for the underwriter.
|
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is declared effective. This
preliminary prospectus is not an offer to sell these securities, nor a solicitation of an offer to buy these securities, in any jurisdiction where the offer, solicitation, or sale is not permitted.
|
|
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 21 , 2021
Flora Growth Corp.
Common Shares
This is an initial public offering (the “offering”) of our common shares, no par value per share (which we refer to as our “Common Shares”). We are
offering 3,333,333 of our Common Shares, as well as up to an additional 500,000 Common Shares if the underwriters exercise in full their over-allotment option, in this offering. It is currently estimated that the initial public offering
price will be between $4.00 and $5.00.
Prior to this offering, there has been no public market for our Common Shares. We are in the process
of applying to list our Common Shares and have reserved the symbol “FLGC” for purposes of listing our Common Shares on the NASDAQ Capital Market under the symbol “FLGC.” NASDAQ might not approve such application, and if our application is
not approved, this offering cannot be completed.
We are organized under the laws of the Province of Ontario and are an “emerging growth company”, as
defined in the Jumpstart Our Business Startups Act of 2012, under applicable U.S. federal securities laws, and are eligible for reduced public company reporting requirements. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations —Emerging Growth Company Status.”
Investing in our securities is highly speculative and involves a high degree of
risk. See “Risk Factors” for a discussion of information that should be considered in connection with an investment in our securities.
Neither the U.S. Securities and Exchange Commission nor any state or provincial
securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
|
|
|
Per Common
Share
|
Total(4)
|
|||||||
Initial public offering price(1)
|
$
|
4.50
|
$
|
17,250,000
|
||||
Underwriting discounts and commissions(2)
|
$
|
0.27
|
$
|
1,035,000
|
||||
Proceeds to us (before expenses)(3)
|
$
|
4.23
|
$
|
16,215,000
|
(1)
|
The initial public offering price of $4.50 per common share is the midpoint of the price range set forth on the cover page of this prospectus. Includes the Common Shares that the underwriters have the option to purchase to cover any
over-allotments.
|
|
(2)
|
We have agreed to reimburse the underwriters for certain expenses and the underwriters will receive compensation in addition to underwriting discounts and commissions. See “Underwriting”
for additional disclosure regarding underwriters’ compensation and offering expenses.
|
|
(3)
|
The total estimated expenses related to this offering are set forth in the section entitled "Expenses Related to This Offering".
|
|
(4)
|
Includes exercise of over-allotment by the underwriters.
|
|
|
Page
|
1
|
|
9
|
|
11
|
|
40
|
|
41
|
|
42
|
|
43
|
|
44
|
|
46
|
|
47
|
|
59
|
|
63
|
|
89
|
|
94
|
|
101
|
|
105
|
|
106
|
|
108
|
|
111
|
|
113
|
|
123
|
|
127
|
|
128
|
|
128
|
|
128
|
|
129
|
|
130
|
|
RESALE PROSPECTUS SUMMARY
|
132 |
INFORMATION NOT REQUIRED IN PROSPECTUS
|
144 |
EXHIBITS
|
145
|
•
|
Experienced Management Team. Our
management is experienced and has a fundamental understanding of Colombia’s regulatory framework, the agricultural and scientific processes necessary to develop high quality and consistent medicinal cannabis products.
|
•
|
Change in the Global Cannabis Industry. The global cannabis industry is experiencing significant change as governments embrace regulatory reform, liberalizing the production and consumption of cannabis. It is possible that foreign corporations may enter the
Colombian market as a result of Colombia’s regulatory regime, creating the prospect of Colombia becoming a hub for future industry development.
|
•
|
Colombian Cultivation Advantage. We anticipate growing our cannabis outdoors in Colombia with favorable environmental conditions. Further, the strength of the United States dollar is projected to provide us with a cost advantage over our competitors, and
Colombia has a workforce highly-skilled in agriculture at a lower cost compared to the United States.
|
•
|
Healthy and Sustainable Products. We produce cannabis and derivative products across food and beverage, cosmetics, and medicinal markets,
which markets are projected to grow rapidly as consumers prioritize healthy and sustainable products that are good for themselves, their family, and their environment.
|
•
|
Efficient Manufacturing Practices. We have
adopted efficient manufacturing practices and logistics, synergizing our operations between our technical and commercial teams
|
•
|
Expanding our production capacity. In the near term, our primary strategy is to expand our production capacity as quickly as possible to meet existing demand in the United States and Colombia.
|
•
|
Creating Sustainable and Natural Products. We believe that sustainable innovation is key to achieving our production objectives, and the main driver to our product development approach.
|
•
|
Expanding our geographic footprint. Our current focus is on selling our products in the United States and Colombia in the short term, with expansion to other Latin American countries, Canada and Europe, subject
to regulatory conditions in such countries.
|
•
|
Exploring strategic partnerships. Because we offer a wide variety of cannabis related products, we believe that we can create a competitive advantage by partnering with
influencers, national and multinational companies to jointly develop and market branded cannabis offerings.
|
•
|
Pursuing accretive acquisitions. We believe that our deal-making capabilities and experience will allow us to successfully identify, consummate and integrate acquisitions.
|
•
|
Agricultural activity has been declared as an essential activity in Colombia. We are operating under a protocol authorized by the Colombian government.
|
•
|
At our farm in Santander, all employees receive a new mask and a new set of surgical gloves daily. Hand sanitizer is provided and hand washing protocols are
in place. The employees are also provided a transparent face protection mask, which is replaced every 30 days. All employees have their temperature taken three times daily and must report to the Health and Safety office if they are
experiencing any symptoms, including diarrhea, cough, runny nose, or headache. If an employee reports any of these symptoms, the employee is sent home to isolate for 14 days, if the symptoms persist for 72 hours, the employee is
required to go to a hospital.
|
•
|
Our farm is located in a rural area, and there have been three positive cases of COVID-19 reported to date. The province in which the farm is located has
reported 475 cases across a population of 2,340,765 to date.
|
•
|
Our staff from the Bogotá office have been working from home since March 25, 2020, and staff from the Toronto office have also been working from home since
March 17, 2020.
|
•
|
To date, there have been 6 reported cases of COVID-19 amongst our staff, with all 6 being completely recovered.
|
• limited operating history and net losses;
• unpredictable events, such as the COVID-19 outbreak, and associated business disruptions;
• changes in cannabis laws, regulations and guidelines;
• decrease in demand for cannabis and derivative products due to certain research findings,
proceedings, or negative media attention;
• damage to reputation as a result of negative publicity;
• exposure to product liability claims, actions and litigation;
• risks associated with product recalls;
• product viability;
• continuing research and development efforts to respond to technological and regulatory changes;
• shelf life of inventory;
• maintenance of effective quality control systems;
• changes to energy prices and supply;
• risks associated with expansion into new jurisdictions;
• regulatory compliance risks;
• opposition to the cannabinoid industry;
• risks related to our operations in Colombia; and
• potential delisting resulting in reduced liquidity of our Common Shares.
|
•
|
present more than two years of audited financial statements and two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations
disclosure in our registration statement of which this prospectus forms a part;
|
•
|
have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (which we refer to as the “Sarbanes-Oxley Act”);
|
•
|
disclose certain executive compensation related items; and
|
•
|
seek shareholder non-binding advisory votes on certain executive compensation matters and golden parachute arrangements, to the extent applicable to us as a foreign private issuer.
|
•
|
the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act;
|
•
|
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, and current reports on Form 8-K
upon the occurrence of specified significant events; and
|
•
|
Regulation Fair Disclosure (“Regulation FD”), which regulates selective disclosures of material information by issuers.
|
(i)
|
the majority of our executive officers or directors are U.S. citizens or residents;
|
(ii)
|
more than 50% of our assets are located in the United States; or
|
(iii)
|
our business is administered principally in the United States.
|
Issuer
|
Flora Growth Corp.
|
|
Common Shares Offered
|
3,333,333 Common Shares (plus up to an additional 500,000 Common Shares if the full over-allotment option is exercised by the underwriters) at an offering price of $4.50 per
Common Share, which is the midpoint of the price range set forth on the cover page of this prospectus.
|
|
Public Offering Price
|
The assumed public offering price is $4.50 per Common Share, which is the midpoint of the price range set forth on the cover page of this prospectus.
|
|
Common Shares Outstanding Before this Offering
|
116,071,260 (or 38,690,420 post-split) Common Shares.
|
|
Common Shares to be Outstanding Immediately After this Offering
|
42,023,753 Common Shares (or 42,523,753 if the underwriters exercise the over-allotment option in full).
|
|
Underwriting; Over-Allotment Option
|
This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the Common Shares if any such shares
are taken. We have granted the underwriters an option for a period of 45 days from the date of this prospectus to purchase up to 500,000 additional Common Shares constituting 15% of the total number of our Common Shares to be
offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering over-allotments, at the initial public offering price less the underwriting discount.
|
|
Underwriters’ Warrants
|
We will issue to Boustead Securities, LLC (the “Representative”), the representative of the underwriters, or its permitted designees warrants to purchase up
to 268,333 Common Shares if the underwriters exercise their over-allotment option in full. The underwriters’ warrants will have an exercise price of 125% of the per Common Share
public offering price, will be exercisable upon issuance, will have a cashless exercise provision and will terminate on the fifth anniversary of the effective date of the registration statement of which this prospectus is a part..
The underwriters’ warrants are not exercisable or convertible for more than five years from the commencement of sales of the public offering.
|
|
Use of Proceeds
|
We estimate that the net proceeds to us from this offering will be approximately $13,250,000 ($15,350,000 if the full over-allotment option is exercised by the
underwriters), assuming an initial public offering price of $4.50 per Common Share (which is the midpoint of the price range set forth on the cover page of this prospectus), after deducting the underwriting discounts and
commissions and estimated offering expenses payable by us. We will use these net proceeds for capital expenditures (including without limitation the construction of our planned Research Technology and Processing Center ),
operating capacity, working capital and general corporate purposes, and such other purposes described in “Use of Proceeds.”
|
|
Lock-ups
|
Our company and certain holders of our Common Shares have agreed with the underwriters not to offer, issue, sell, contract to sell, encumber, grant any option for the sale
of, or otherwise dispose of, any of our securities for the following periods from the date on which the trading of our Common Shares on NASDAQ commences: (i) a period of 180 days in the case of our Company; (ii) a period of up to
365 days in the case of holders of our Common Shares, including founder warrant holders but excluding the holders of our Common Shares pursuant to our Regulation A offering. Notwithstanding the foregoing, if after the first 90
days following the date on which the trading of our Common Shares on NASDAQ commences, the closing bid price of our Common Shares is $8.00 or greater for any ten consecutive trading days, and the average daily trading volume for
the first 90 days is 100,000 shares or greater, then the holders may sell up to 33% of his, her or its holdings with a limit of three percent (3%) of the average trading volume on any one day. If after the first 180 days following
the date on which the trading of our Common Shares on NASDAQ commences, the closing bid price of our Common Shares is $7.00 or greater for any ten consecutive trading days, and the average daily trading volume for the first 180
days is 100,000 shares or greater, then the holders may sell up to an additional 33% of his, her or its holdings with a limit of three percent (3%) of the average trading volume on any one day. See “Underwriting—No Sales of Similar Securities” for more information.
|
|
Listing
|
We are in the processing of filing a listing application with NASDAQ and intend to list our Common Shares on
the NASDAQ Capital Market under the symbol “FLGC.” Our application could be rejected by NASDAQ, and this offering may not close until we have received NASDAQ’s approval of our application.
|
|
Transfer Agent
|
The transfer agent and registrar for our Common Shares is TSX Trust Company.
|
|
Risk Factors
|
Investing in our securities is highly speculative and involves a high degree of risk. You should carefully read and consider the information set forth under the heading “Risk Factors”,
and all other information contained in this prospectus, before deciding to invest in our securities.
|
(a)
|
up to 500,000 Common Shares issuable upon the exercise in full by the underwriters of their over-allotment option to purchase
additional Common Shares from us, and
|
(b)
|
3,816,667 Common Shares issuable upon exercise of stock options outstanding which are exercisable at an average exercise price of $1.08 per share and 9,298,184 Common
Shares issuable upon exercise of common share purchase warrants outstanding which are exercisable at an average exercise price of $2.45 per share.
|
• an anticipated 1-for-3 reverse split and consolidation of our Common Shares that was prospectively approved by our board of directors and stockholders on March 8, 2021, which will be
effected simultaneously with the closing of the offering.
|
|
• no exercise by the underwriters of their over-allotment option to purchase additional Common Shares from us.
|
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in thousands of United States dollars, except per share amounts)
|
Year Ended December 31, 2020
|
March 13, 2019 (inception) through December 31, 2019
|
||||||
(audited)
|
(audited)
|
|||||||
Revenues
|
$
|
106
|
$
|
-
|
||||
Cost of sales
|
35
|
-
|
||||||
Gross profit
|
71
|
-
|
||||||
Expenses
|
||||||||
Consulting and management fees
|
$
|
4,752
|
2,001
|
|||||
Professional fees
|
794
|
183
|
||||||
General office expenses
|
1,400
|
175
|
||||||
Travel expenses
|
428
|
306
|
||||||
Share based compensation
|
4,901
|
107
|
||||||
Depreciation and amortization
|
113
|
26
|
||||||
Research and development
|
78
|
21
|
||||||
Foreign exchange (gain)
|
20
|
6
|
||||||
Total Expenses
|
12,486
|
|
2,825
|
|
||||
Loss before the undernoted items
|
(12,415
|
)
|
(2,825 |
)
|
||||
Goodwill Impairment
|
1,816
|
- | ||||||
Interest expense
|
30
|
19
|
||||||
Transaction costs
|
132
|
-
|
||||||
Other income
|
(59
|
)
|
-
|
|||||
Net loss for the period
|
$
|
(14,334
|
)
|
$
|
(2,844
|
)
|
||
Other comprehensive loss
|
||||||||
Exchange differences on foreign operations
|
(16
|
)
|
(23
|
)
|
||||
Total comprehensive loss for the period
|
$
|
(14,350
|
)
|
$
|
(2,821
|
)
|
||
Net loss attributable to:
|
||||||||
Flora Growth Corp.
|
$
|
(14,170
|
)
|
$
|
(2,824
|
)
|
||
Non-controlling interests
|
$
|
(164
|
)
|
$
|
(20
|
)
|
||
Comprehensive loss attributable to:
|
||||||||
Flora Growth Corp.
|
$
|
(14,186
|
)
|
$
|
(2,801
|
)
|
||
Non-controlling interests
|
$
|
(164
|
)
|
$
|
(20
|
)
|
||
Basic and diluted loss per share attributable to Flora Growth Corp.
|
$
|
(0.16
|
)
|
$
|
(0.06
|
)
|
||
Weighted average number of Common Shares outstanding – basic and diluted
|
89,704
|
44,676
|
•
|
successfully implement or execute our business plan, or that our business plan is sound;
|
•
|
adjust to changing conditions or keep pace with increased demand;
|
•
|
attract and retain an experienced management team; or
|
•
|
raise sufficient funds in the capital markets to effectuate our business plan, including product development, licensing and approvals.
|
•
|
require extensive changes to our operations;
|
•
|
result in regulatory or agency proceedings or investigations;
|
•
|
result in the revocation of our licenses and permits, increased compliance costs;
|
•
|
result in damage awards, civil or criminal fines or penalties;
|
•
|
result in restrictions on our operations;
|
•
|
harm our reputation; or
|
•
|
give rise to material liabilities.
|
•
|
the revocation or imposition of additional conditions on licenses to operate our business;
|
•
|
the suspension or expulsion from a particular market or jurisdiction or of our key personnel;
|
•
|
the imposition of additional or more stringent inspection, testing and reporting requirements;
|
•
|
product recalls or seizures; and
|
•
|
the imposition of fines and censures.
|
•
|
a limited availability of market quotations for our Common Shares;
|
•
|
reduced liquidity for our Common Shares;
|
•
|
a determination that our Common Shares are “penny stock”, which would require brokers trading in our Common Shares to adhere to more stringent rules and possibly result in a reduced level of trading
activity in the secondary trading market for our Common Shares;
|
•
|
a limited amount of news about us and analysist coverage of us; and
|
•
|
a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.
|
• delaying,
deferring or preventing a change of control of the Company;
|
• impeding
a merger, consolidation, takeover or other business combination involving the Company; or
|
• discouraging
a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.
|
• Our
limited operating history and net losses;
• unpredictable
events, such as the COVID-19 outbreak, and associated business disruptions;
• changes
in cannabis laws, regulations and guidelines;
• decrease
in demand for cannabis and derivative products due to certain research findings,
proceedings, or negative media attention;
• damage
to our reputation as a result of negative publicity;
• exposure
to product liability claims, actions and litigation;
• risks
associated with product recalls;
• product
viability;
• continuing
research and development efforts to respond to technological and regulatory changes;
• shelf
life of inventory;
• maintenance
of effective quality control systems;
• changes
to energy prices and supply;
• risks
associated with expansion into new jurisdictions;
• regulatory
compliance risks;
• opposition
to the cannabinoid industry;
• risks
related to our operations in Colombia; and
• potential
delisting resulting in reduced liquidity of our Common Shares.
|
•
|
on an actual basis, except to the extent it has been adjusted to give effect to a 1-for-3 reverse split and consolidation of our Common Shares that was prospectively approved by our board of
directors and stockholders on March 8, 2021, which will be effected simultaneously with the closing of the offering.
|
•
|
on a pro forma basis to give effect to proforma adjustments and the issuances of Common Shares after December 31, 2020 and
|
•
|
on a pro forma, as adjusted, basis to give effect to the above and the issuance of Common Shares in this offering at an assumed initial public offering price of $4.50 per Common Share, which is the
midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, as set forth in this prospectus.
|
As of December 31, 2020
|
||||||||
in thousands except share amounts
|
Actual
US$(1)
|
Pro Forma$(1)
|
||||||
Cash and cash equivalents
|
15,523
|
28,208
|
||||||
Shareholders’ equity:
|
||||||||
Common Shares, without par value; 38,358 shares issued and outstanding, 42,025 pro forma
|
27,254
|
39,484
|
||||||
Warrants; 9,000 issued and outstanding pro forma and 9,299
|
3,961
|
5,144
|
||||||
Options; 3,794 issued and outstanding, pro forma 3,794 pro forma
|
2,396
|
2,396
|
||||||
Non-controlling interest
|
(113
|
)
|
(113
|
)
|
||||
Accumulated other comprehensive loss
|
39
|
39
|
||||||
Retained Earnings Deficit
|
(17,287
|
)
|
(17,287
|
)
|
||||
Total shareholders’ equity (deficiency)
|
16,250
|
29,663
|
||||||
Total capitalization
|
16,250
|
29,663
|
||||||
Assumed initial public offering price per Common Share (midpoint of the price range set forth on the cover page of this prospectus)
|
$
|
4.50
|
||
Net tangible book value per Common Share before this offering ( as of December 31, 2020 )
|
$
|
0.40
|
||
Increase in net tangible book value per Common Share attributable to purchasers in this offering
|
$
|
0.28
|
||
Pro forma, as adjusted net tangible book value per Common Share immediately after this offering
|
$
|
0.68
|
||
Dilution in pro forma, as adjusted net tangible book value per Common Share to purchasers in this offering
|
$
|
3.82
|
Common Shares
|
Total Consideration
|
||||
Number
|
Percent
|
Amount
|
Percent
|
Weighted Average Price
Per Share |
|
Existing shareholders
|
38,690,420
|
92.1 %
|
$29,340,150
|
66.4 %
|
$ 0.77
|
Purchasers in this offering
|
3,333,333
|
7.9 %
|
$15,000,000
|
33.6 %
|
$4.50
|
Total
|
42,023,753
|
100%
|
$44,340,150
|
100%
|
$ 1.06
|
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in thousands of United States dollars, except per share amounts)
|
Year Ended December 31, 2020
|
March 13, 2019 (inception) through December 31, 2019
|
||||||
(audited)
|
(audited)
|
|||||||
Revenues
|
$
|
106
|
$
|
-
|
||||
Cost of sales
|
35
|
-
|
||||||
Gross profit
|
71
|
-
|
||||||
Expenses
|
||||||||
Consulting and management fees
|
$
|
4,752
|
2,001
|
|||||
Professional fees
|
794
|
183
|
||||||
General office expenses
|
1,400
|
175
|
||||||
Travel expenses
|
428
|
306
|
||||||
Share based compensation
|
4,901
|
107
|
||||||
Depreciation and amortization
|
113
|
26
|
||||||
Research and development
|
78
|
21
|
||||||
Foreign exchange (gain)
|
20
|
6
|
||||||
Total Expenses
|
12,486
|
|
2,825
|
|
||||
Loss before the undernoted items
|
(12,415
|
)
|
(2,825 |
)
|
||||
Goodwill Impairment
|
1,816
|
- | ||||||
Interest expense
|
30
|
19
|
||||||
Transaction costs
|
132
|
-
|
||||||
Other income
|
(59
|
)
|
-
|
|||||
Net loss for the period
|
$
|
(14,334
|
)
|
$
|
(2,844
|
)
|
||
Other comprehensive loss
|
||||||||
Exchange differences on foreign operations
|
(16
|
)
|
(23
|
)
|
||||
Total comprehensive loss for the period
|
$
|
(14,350
|
)
|
$
|
(2,821
|
)
|
||
Net loss attributable to:
|
||||||||
Flora Growth Corp.
|
$
|
(14,170
|
)
|
$
|
(2,824
|
)
|
||
Non-controlling interests
|
$
|
(164
|
)
|
$
|
(20
|
)
|
||
Comprehensive loss attributable to:
|
||||||||
Flora Growth Corp.
|
$
|
(14,186
|
)
|
$
|
(2,801
|
)
|
||
Non-controlling interests
|
$
|
(164
|
)
|
$
|
(20
|
)
|
||
Basic and diluted loss per share attributable to Flora Growth Corp.
|
$
|
(0.16
|
)
|
$
|
(0.06
|
)
|
||
Weighted average number of Common Shares outstanding – basic and diluted
|
89,704
|
44,676
|
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in thousands of United States dollars, except per share amounts)
|
Year Ended December 31, 2020
|
March 13, 2019 (inception) through December 31, 2019
|
||||||
(audited)
|
(audited)
|
|||||||
Revenues
|
$
|
106
|
$
|
-
|
||||
Cost of sales
|
35
|
-
|
||||||
Gross profit
|
71
|
-
|
||||||
Expenses
|
||||||||
Consulting and management fees
|
$
|
4,752
|
2,001
|
|||||
Professional fees
|
794
|
183
|
||||||
General office expenses
|
1,400
|
175
|
||||||
Travel expenses
|
428
|
306
|
||||||
Share based compensation
|
4,901
|
107
|
||||||
Depreciation and amortization
|
113
|
26
|
||||||
Research and development
|
78
|
21
|
||||||
Foreign exchange (gain)
|
20
|
6
|
||||||
Total Expenses
|
12,486
|
|
2,825
|
|
||||
Loss before the undernoted items
|
(12,415
|
)
|
(2,825 |
)
|
||||
Goodwill Impairment
|
1,816
|
- | ||||||
Interest expense
|
30
|
19
|
||||||
Transaction costs
|
132
|
-
|
||||||
Other income
|
(59
|
)
|
-
|
|||||
Net loss for the period
|
$
|
(14,334
|
)
|
$
|
(2,844
|
)
|
||
Other comprehensive loss
|
||||||||
Exchange differences on foreign operations
|
(16
|
)
|
(23
|
)
|
||||
Total comprehensive loss for the period
|
$
|
(14,350
|
)
|
$
|
(2,821
|
)
|
(in thousands of United States dollars)
|
Year ended December 31, 2020
|
For the period from March 13, 2019 (inception) to December 31, 2019
|
||||||
Cash from operating activities
|
$
|
(8,421
|
)
|
$
|
(454
|
)
|
||
Cash from financing activities
|
$
|
25,816
|
$
|
1,005
|
||||
Cash from investing activities
|
$
|
(2,164
|
)
|
$
|
(431
|
)
|
||
Effect of exchange rate change
|
$
|
152
|
$
|
20
|
||||
Change in cash during the period
|
$
|
15,383
|
$
|
140
|
||||
Cash, beginning of period
|
$
|
140
|
$
|
-
|
||||
Cash, end of period
|
$
|
15,523
|
$
|
140
|
•
|
IFRS 3 – Business Combinations (“IFRS 3”) was amended in October 2018 to clarify the definition of a business. This amended definition states that a business
must include inputs and a process and clarified that the process must be substantive and the inputs and process must together significantly contribute to operating outputs. In addition it narrows the definitions of a business by
focusing the definition of outputs on goods and services provided to customers and other income from ordinary activities, rather than on providing dividends or other economic benefits directly to investors or lowering costs and added
a test that makes it easier to conclude that a company has acquired a group of assets, rather than a business, if the value of the assets acquired is substantially all concentrated in a single asset or group of similar assets. The
amendments are effective for annual reporting periods beginning on or after January 1, 2020. Earlier adoption is permitted.
|
•
|
IAS 1 – Presentation of Financial Statements (“IAS 1”) and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) were amended in
October 2018 to refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to
influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2020.
Earlier adoption is permitted.
|
In thousands of US dollars
|
Payments due by period:
|
|||||||||||||||
Total
|
Less than 1 year
|
1 – 3 years
|
More than 3 years
|
|||||||||||||
Long-term debt obligations
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Capital (finance) lease obligations
|
395
|
107
|
288
|
-
|
||||||||||||
Operating lease obligations
|
-
|
-
|
-
|
-
|
||||||||||||
Purchase obligations
|
-
|
-
|
-
|
-
|
||||||||||||
Other long-term liabilities reflected on our balance sheet
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
$
|
395
|
$
|
107
|
$
|
288
|
$
|
-
|
•
|
present more than two years of audited financial statements and two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations
disclosure in our registration statement of which this prospectus forms a part;
|
•
|
have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; and
|
•
|
disclose certain executive compensation related items.
|
•
|
The cultivation, processing and supplying of natural, medicinal-grade cannabis oil and high quality cannabis derived medical and wellbeing products to large
channel distributors, including pharmacies, medical clinics, and cosmetic companies in Colombia and internationally;
|
•
|
Over-the-counter medical products and medical cannabis products, in which we produce and sell branded products to consumers as well as use our production
facility to create white-label products for consumers;
|
•
|
Wellbeing products, focused on delivering the benefits of CBD and hemp across an array of various branded consumer packaged goods, such as its Mind Naturals and Ô cosmetics lines and Stardog loungewear line. We leverage our branded product market
experience, scientific expertise, agricultural advantages and educational platforms to introduce our products and services across markets in Latin America and the United States; and
|
•
|
Food and beverage products, focused on delivering the benefits of exotic fruits from the Colombian amazon to consumers.
|
•
|
Help People Restore and Thrive. We
develop products to positively affect the health and wellness of people. From medicines to consumer products, we strive to help our customers restore and thrive.
|
•
|
Prioritize Value-chain Sustainability. We care about our broader global impact, from production to consumption. We make conscious decisions to prioritize sustainability across our value-chain.
|
(1)
|
Cleanser: The product is designed to be a
gentle gel cleanser is used to remove makeup. The cleanser is creamy and smooth in texture, designed to dig deep and cleanse the skin without peeling it.
|
(2)
|
Eye Cream: The eye cream is designed to
decompress and recharges the skin with hyaluronic acid-based, aimed to generate smoother skin and diminish expression lines.
|
(3)
|
Moisturizer: The moisturizer is designed to
feed the skin with antioxidants and is formulated with hyaluronic acid, vitamin E from cacay oil, and CBD. The moisturizer is designed to nourish and replenish, leaving a smooth and dewy complexion.
|
(4)
|
Hydrating mask: The relaxing hydrating mask
treatment can be used twice a week to enhance the effects of the other three products.
|
(1)
|
Cleanser: The cleanser is designed to remove
impurities and prepare the skin for its daily routine. Its special ingredients include CBD, cold-pressed coconut oil, and cacay oil.
|
(2)
|
Eye Cream: The eye cream is designed to
provide a smooth finish and eliminate fine lines and under-eye bags. Its special ingredients include CBD and sacha inchi oil.
|
(3)
|
Moisturizer: The moisturizer is designed to
replenish your skin and deliver a healthy complexion. Its special ingredients include CBD, calendula extract, aloe vera, and cacay oil.
|
(4)
|
Nourishing mask: The nourishing mask is
designed to rejuvenate your skin and deliver an alluring glow. Special ingredients include CBD and sacha inchi oil.
|
•
|
White Label: development and production of brands for businesses.
|
•
|
Custom Formulas: specific customized needs for patients and consumers.
|
•
|
Dermo cosmetic products: intended for plastic surgeons, cosmetic surgeons, dermatologists and clinicians in other specialties.
|
•
|
Private Label: brands developed for our intra-company divisions and spa products intended for beauticians and beauty treatment professionals for beauty treatments such as weight reduction and skin
appearance improvement.
|
•
|
Bottling and Packaging Services: to maximize idle time and laboratory output.
|
(1)
|
https://bdsa.com/wp-content/uploads/2019/08/BDS-Analytics-The-Global-Cannabinoids-Market-Will-CBD- Overtake-THC.pdf
|
(2)
|
2019 Hemp and CBD Industry Factbook
|
•
|
Our acquisitions in Colombia of Kasa, Cronomed and Breeze which businesses have some years of operating history, sales and brand recognition;
|
•
|
Our Partnerships with Laura Londono and Paulina Vega, well known celebrities in Colombia and Latin America;
|
•
|
Following our planned commercial production CBD, we anticipate using CBD in our products as opposed to purchasing which gives us access to high quality lower-priced CBD;
|
•
|
Synergies associated with producing our products out of our recently acquired Quipropharma laboratory; and
|
•
|
Our strong distribution relationships in Colombia for the product categories Flora offers.
|
•
|
Our emerging business producing products in Colombia at a low cost and exporting to US;
|
•
|
Strength of the dollar compared to Colombian peso;
|
•
|
Our expanding product portfolio that allows for revenue diversification;
|
•
|
Paulina Vega, former Ms. Universe, has a strong profile with US Hispanic consumers;
|
•
|
Vertical integration that ensures quality of raw materials and cost efficiencies;
|
•
|
Sustainability focus that includes natural ingredients, ecological packaging and organic practices;
|
•
|
Our ability to utilize skilled labor in Colombia for efficient costs and production; and
|
•
|
Positive regulatory environment that supports exports into the United States.
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
Brands
|
||||||
MIND NATURALS
|
March 25, 2020
|
September 18, 2020
|
Superintendency of Industry and Commerce
|
Certificate 57796 of 2020 on Nice Class 11 (Cosmetic Products)
|
Colombia
|
Valid until September 18, 2030, with an option to renew for an addition 10-year period.
|
SERUM
|
November 11, 2020
|
INVIMA
|
NSOC02984-20CO
|
Colombia
|
November 20, 2027
|
|
AGIA LIMPIADORA MICELAR
|
December 30, 2020
|
INVIMA
|
NSOC03754-21CO
|
Colombia
|
December 1, 2028
|
|
Certificates
|
||||||
Anti-Aging Repair Eye Cream
|
February 19, 2021
|
INVIMA
|
NSOC04292-21CO
|
Colombia
|
February 19, 2028
|
|
Cleanser
|
September 17, 2020
|
INVIMA
|
NSOC01574-20CO
|
Colombia
|
July 31, 2027
|
|
Eye Cream
|
July 31, 2020
|
INVIMA
|
NSOC00666-20CO
|
Colombia
|
July 31, 2027
|
|
Hydrating Mask
|
July 28, 2020
|
INVIMA
|
NSOC00613-20CO
|
Colombia
|
July 28, 2027
|
|
Moisturizer
|
October 13, 2020
|
INVIMA
|
NSOC00648-20CO
|
Colombia
|
October 13, 2027
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
Brands
|
||||||
BREEZE
|
October 24, 2016
|
Superintendency of Industry and Commerce
|
541494 of 2016 on Nice Classes 3, 5 y 42
|
Colombia
|
October 24, 2026
|
|
Certificates
|
||||||
Oil Massage
|
February 4, 2016
|
INVIMA
|
NSOC52156-13CO
|
Colombia
|
February 4, 2023
|
|
Anti-Age
|
September 14, 2018
|
INVIMA
|
NSOC87929-18CO
|
Colombia
|
September 14, 2025
|
|
Bio tonic
|
July 11, 2017
|
INVIMA
|
NSOC79856-17CO
|
Colombia
|
July 11, 2024
|
|
Bio Tonic
|
September 3, 2015
|
INVIMA
|
NSOC67513-15CO
|
Colombia
|
September 3, 2022
|
|
Soothing and Refreshing tonic
|
January 1, 2014
|
INVIMA
|
NSOC38169-10CO
|
Colombia
|
In the Renewal Process
|
|
Liposome Lightening and Antioxidant Cream
|
January 1, 2014
|
INVIMA
|
NSOC47521-12CO
|
Colombia
|
In the Renewal Process
|
|
DERMOREPARING CREAM
|
April 2, 2014
|
INVIMA
|
NSOC58710-14CO
|
Colombia
|
In the Renewal Process
|
|
PROTECTIVE AND REGENERATING CREAM
|
April 22, 2014
|
INVIMA
|
NSOC71701-16CO
|
Colombia
|
April 22, 2023
|
|
EMULSION FOR REDUCING, MOLDING AND FIRMING MASSAGE
|
February 7, 2016
|
INVIMA
|
NSOC52155-13CO
|
Colombia
|
February 7, 2023
|
|
REHYDRATING AND NUTRITIVE EMULSION
|
April 5, 2016
|
INVIMA
|
NSOC52972-13CO
|
Colombia
|
April 5, 2023
|
|
GEL
|
June 22, 2018
|
INVIMA
|
NSOC86232-18-CO
|
Colombia
|
June 22, 2018
|
|
ANTIBACTERIAL GEL
|
March 25, 2020
|
INVIMA
|
NSOC99512-20CO
|
Colombia
|
March 25, 2027
|
|
HYPOTHERMAL GEL FOR FIRMING AND TONING MASSAGE
|
February 7, 2016
|
INVIMA
|
NSOC52157-13CO
|
Colombia
|
February 7, 2023
|
|
THERMAL GEL FOR ANTI-CELLULITE AND REDUCING MASSAGE
|
February 7, 2016
|
INVIMA
|
NSOC52154-13CO
|
Colombia
|
February 7, 2023
|
|
FACE CLEANER
|
August 19, 2016
|
INVIMA
|
NSOC73720-16CO
|
Colombia
|
August 19, 2023
|
|
FOAM CLEANER
|
October 10, 2018
|
INVIMA
|
NSOC88500-18CO
|
Colombia
|
October 10, 2025
|
|
ANTIBACTERIAL FOAM CLEANER
|
March 5, 2020
|
INVIMA
|
NSOC99498-20CO
|
Colombia
|
March 5, 2027
|
|
MASK
|
May 4, 2016
|
INVIMA
|
NSOC71907-16CO
|
Colombia
|
May 4, 2023
|
|
SUN PROTECTOR WITH SCREEN AND SOLAR FILTERS SPF 60+
|
April 9, 2015
|
INVIMA
|
NSOC47416-12CO
|
Colombia
|
April 9, 2022
|
|
SILICONE DERMAL RECOVERY
|
July 7, 2018
|
INVIMA
|
NSOC79752-17CO
|
Colombia
|
July 7, 2024
|
|
Shampoo
|
July 25, 2018
|
INVIMA
|
NSOC86762-18CO
|
Colombia
|
July 25, 2025
|
|
WET TOWEL
|
March 18, 2020
|
INVIMA
|
NSOC99378-20CO
|
Colombia
|
March 18, 2027
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
Brands
|
||||||
COLNLAX
|
August 21, 2013
|
Superintendency of Industry and Commerce
|
477949 of 2013 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 21, 2023
|
|
CAPSIFLAM
|
September 12, 2013
|
Superintendency of Industry and Commerce
|
479171 of 2013 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
September 12, 2023
|
|
COLNLAX
|
August 21, 2013
|
Superintendency of Industry and Commerce
|
479171 of 2013 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 21, 2023
|
|
CROCEFAL
|
October 3, 2019
|
INVIMA
|
2019M-0019289
|
Colombia
|
October 3, 2024
|
|
CRONOCICAR
|
April 12, 2010
|
Superintendency of Industry and Commerce
|
405176 of 2010 on Nice Class 3 (Cosmetics Products)
|
Colombia
|
April 12, 2020 with an option to renew for an additional 10-year period
|
|
CRONODOL MAX
|
March 10, 2010
|
Superintendency of Industry and Commerce
|
398866 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
March 07, 2024
|
|
CRONODOL FORTE
|
March 07, 2014
|
Superintendency of Industry and Commerce
|
488961 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
March 24, 2030 with an option to renew for an additional 10-year period
|
|
CRONOGRYP ULTRA
|
March 10, 2010
|
Superintendency of Industry and Commerce
|
398865 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
March 19, 2030 with an option to renew for an additional 10-year period
|
|
CRONOSURE
|
March 25, 2010
|
Superintendency of Industry and Commerce
|
402780 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
May 25, 2030 with an option to renew for an additional 10-year period
|
|
CRONOTEX
|
September 28, 2010
|
Superintendency of Industry and Commerce
|
411173 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
September 28, 2030 with an option to renew for an additional 10-year period
|
|
CRONOZIT
|
September 28, 2010
|
Superintendency of Industry and Commerce
|
411174 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
September 28, 2030 with an option to renew for an additional 10-year period
|
|
CROSIMPAR
|
September 28, 2010
|
Superintendency of Industry and Commerce
|
411175 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
September 28, 2030 with an option to renew for an additional 10-year period
|
|
DEXIFEM
|
July 27, 2018
|
Superintendency of Industry and Commerce
|
599383 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
July 31, 2028 with an option to renew for an additional 10-year period
|
|
DUOMELOC
|
April 18, 2018
|
Superintendency of Industry and Commerce
|
592108 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
April 23, 2028
|
|
DUOPLUS
|
April 18, 2018
|
Superintendency of Industry and Commerce
|
592107 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
April 23, 2028
|
|
ENDOVIT
|
March 31, 2014
|
Superintendency of Industry and Commerce
|
595743 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
March 31, 2024
|
|
ENERBIOVIT
|
March 31, 2014
|
Superintendency of Industry and Commerce
|
490055 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
June 22, 2027
|
|
FILOX36
|
May 24, 2018
|
Superintendency of Industry and Commerce
|
594262 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
June 22, 2027
|
|
FLAXERD
|
July 31, 2013
|
Superintendency of Industry and Commerce
|
594262 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
July 31, 2023
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
FLUMIEL
|
September 29, 2010
|
Superintendency of Industry and Commerce
|
411562 of 2010 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
September 29, 2030 with an option to renew for an additional 10-year period
|
|
IMPROTOP
|
August 14, 2013
|
Superintendency of Industry and Commerce
|
477148 of 2013 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 14, 2023
|
|
INFEMOX
|
August 14, 2013
|
Superintendency of Industry and Commerce
|
477148 of 2013 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 14, 2023
|
|
INFEMOX PPS
|
October 16, 2020
|
INVIMA
|
2013M-0014385
|
Colombia
|
October 16,2025
|
|
INFLAGEL
|
November 28, 2012
|
Superintendency of Industry and Commerce
|
486607 of 2012 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
November 28, 2022
|
|
INFLAGEL
|
April 3, 2013
|
INVIMA
|
2013M-0014090
|
Colombia
|
In the Renewal Process
|
|
INFLEDOL
|
August 11, 2014
|
Superintendency of Industry and Commerce
|
498918 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 11, 2024
|
|
LESFLIS
|
April 27, 2018
|
Superintendency of Industry and Commerce
|
546101 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
December 14, 2026
|
|
MAXERIL
|
June 14, 2014
|
Superintendency of Industry and Commerce
|
494916 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
June 10, 2024
|
|
MAXERIL
|
November 15, 2018
|
INVIMA
|
2013M-0014545
|
Colombia
|
November 15, 2023
|
|
MUCOCISTEIN
|
August 01, 2018
|
Superintendency of Industry and Commerce
|
54921 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 01, 2028
|
|
MUCOTAPP
|
August 17, 2018
|
Superintendency of Industry and Commerce
|
59595 of 2018 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
August 17, 2028
|
|
NASORYL
|
May 28, 2014
|
Superintendency of Industry and Commerce
|
494091 of 2014 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
May 28, 2024
|
|
SOLKREM ULTRA
|
November 21, 2012
|
Superintendency of Industry and Commerce
|
464794 of 2012 on Nice Class 5 (Pharmaceutical Products)
|
Colombia
|
November 21, 2022
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
Brands
|
||||||
STARDOG LOUNGEWEAR
|
June 9, 2020
|
October 29, 2020
|
Superintendency of Industry and Commerce
|
69482 of 2020 on Nice Class 25 (clothing)
|
Colombia
|
October 29, 2030, with an option to renew for an additional 10-year period
|
Application Date
|
Date of Approval
|
Approved By
|
Certificate Number
|
Country
|
Validity Period (with an Option to Renew)
|
|
Brands
|
||||||
MAMBE
|
March 28, 2016
|
Superintendency of Industry and Commerce
|
545034 of 2016 on Nice Class 32 (fruit-based drinks)
|
Colombia
|
March 28, 2026
|
|
ALMOST VIRGIN MAMBA WATER
|
December 23, 2015
|
Superintendency of Industry and Commerce
|
5321148 of 2015 on Nice Class 32 (fruit-based drinks)
|
Colombia
|
December 23, 2025
|
|
ALMOST VIRGIN
|
April 02, 2020
|
Superintendency of Industry and Commerce
|
Nice Class Nice Class 11 (Cosmetic Products)
|
Colombia
|
||
ALMOST VIRGIN SX
|
October 10, 2020
|
INVIMA
|
NSOC02063-20CO
|
Colombia
|
October 10, 2027
|
|
MAMBE SABIDURIA
|
July 17, 2020
|
Superintendency of Industry and Commerce
|
Nice Class Nice Class 30 (Chocolate bar)
|
Colombia
|
||
Certificates
|
||||||
ALMOST VIRGIN SX (CBD Oil)
|
August 18, 2020
|
INVIMA
|
NSOC00887-20CO
|
Colombia
|
August 18, 2027
|
|
ALMOST VIRGIN (Spray)
|
August 28, 2020
|
INVIMA
|
NSOC01116-20CO
|
Colombia
|
August 28, 2027
|
|
JUNGLE BOOST; COCONUT WATER; CUCUMBER SOUL; CAMU; PASSIFLORAS; MR. BERRY
|
July 04, 2017
|
INVIMA
|
RSA-003797-2017
|
Colombia
|
July 21, 2022
|
|
ALBA; FARO; SANTO; PURE DELIGHT; SUPER TONIC; JUST BLOSSUM; GUAPI DREAM; ORANGE BLISS; PASSIFLORA
|
July 04, 2017
|
INVIMA
|
RSA-003797-2017
|
Colombia
|
||
MAMBA, MAMBA RAW
|
July 4, 2017
|
February 20, 2018
|
INVIMA
|
Colombia
|
•
|
The federal physician self-referral law, commonly known as the Stark Law, that generally prohibits physicians from referring Medicare or
Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership
interest or a compensation arrangement) with the entity, and prohibit the entity from billing Medicare or Medicaid for such designated health services.
|
•
|
The federal Anti-Kickback Statute that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in
return for ordering, leasing, purchasing or recommending or arranging for, or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare
program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim
including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
|
•
|
The criminal healthcare fraud provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act
(“HITECH”), and their implementing regulations (collectively, “HIPAA”), and related rules which prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or
covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a
person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.
|
•
|
The federal False Claims Act, which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or
cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits.
|
•
|
Reassignment of payment rules which prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs.
|
•
|
Similar state law provisions pertaining to anti-kickback, self-referral and false claims issues.
|
•
|
State laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions, or engaging in certain practices such as splitting fees with
physicians.
|
•
|
Laws that regulate debt collection practices as applied to our debt collection practices.
|
•
|
Certain provisions of the Social Security Act that impose criminal penalties on healthcare providers who fail to disclose, or refund known overpayments.
|
•
|
Federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately
documented, and billed using codes that accurately reflect the type and level of services rendered.
|
•
|
Federal and state laws and policies that require healthcare providers to maintain licensure, certification or accreditation to enroll and participate in the Medicare and Medicaid programs, and to report
certain changes in their operations to the agencies that administer these programs.
|
Regulation:
|
Regulates:
|
|
Law 1787 of 2016
|
Legalizes the use of Cannabis for medical and scientific purposes
|
|
Decree 613 of 2017 modifies Decree 780 of 2016
|
Regulates law 1787 establishing a licensing system and process, defines psychoactive and non-psychoactive cannabis and the quota system for psychoactive
cannabis in accordance with Single Convention of Narcotics of 1961 and amendments
|
|
Resolution 577 of 2017 from the Ministry of Justice
|
Regulates the evaluation and control of the following licenses:
a. Seed Use
b. Cultivation of psychoactive plants (High-THC cultivation licence)
c. Cultivation of non-psychoactive plants (Low-THC cultivation licence)
Creates requirement for security protocol
|
|
Resolution 578 of 2017 from the Ministry of Justice
|
Regulates the cost of the following licences:
a. Seed Use
b. Cultivation of psychoactive plants (High-THC cultivation licence)
c. Cultivation of non-psychoactive plants (Low-THC cultivation licence)
|
|
Resolution 579 of 2017 from the Ministry of Justice
|
Establishes that growers that cultivate on a half a hectare area (5,000 square meters) or less are considered small and medium growers and, therefore, may
access technical advice, priority allocation of quotas and purchase of their production by the processor and requires that 10 percent of the total production of the processor must come from a small and medium producers.
|
|
Resolution 2892 of 2017 from the Ministry of Health
|
Regulates the evaluation and control of the Fabrication of Cannabis derivatives (High-THC Production Licence) Provides guidelines for appropriate security
protocols for manufacturing cannabis derivatives including physical security, monitoring, detection, and incident reporting to authorities.
|
|
Resolution 2891 of 2017 from the Ministry of Health
|
Regulates the cost of the High-THC production Licence
|
|
Resolution 1478 of 2006 from the Ministry of Health modified by Resolution 315 of 2020.
|
Regulation of the control, monitoring and surveillance of the import, export, processing, synthesis, manufacture, distribution, dispensing, purchase, sale,
destruction and use of controlled substances, medicines or products containing them and on those which are State Monopoly
|
|
Decree 2200 of 2005 from the Ministry of Health
|
Regulates pharmaceutical services including the Magistral Preparations
|
|
Guidelines for the GEP certification for Magistral Preparations with Cannabis issued the 25 of October 2019 by INVIMA
|
Establishes the requirements for labs to obtain the GEP certification for the fabrication of Magistral Preparations with Cannabis derivatives
|
Name
|
Position
|
Age
|
||||||
Executive Officers:
|
||||||||
Luis Merchan
|
President and Chief Executive Officer
|
39
|
||||||
Deborah Battiston
|
Chief Financial Officer
|
63
|
||||||
Orlando Bustos
|
VP Strategic Finance and FP&A
|
33
|
||||||
James Williams
|
VP Corporate Development |
31
|
||||||
Javier Franco
|
VP Agriculture
|
53
|
||||||
Damian Lopez
|
VP Strategy and Legal
|
38
|
||||||
Evan Veryard
|
VP Investor Relations
|
26
|
||||||
Aaron Atin
|
Corporate Secretary
|
37 | ||||||
Directors:
|
||||||||
Dr. Bernard Wilson
|
Executive Chairman
|
77
|
||||||
Luis Merchan
|
Director
|
39
|
||||||
Dr. Beverley Richardson
|
Director
|
60
|
||||||
Juan Carlos Gomez Roa
|
Director
|
58
|
||||||
Stan Bharti
|
Director
|
68
|
•
|
Been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
•
|
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he
or she was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
|
•
|
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state
authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or
to be associated with persons engaged in any such activity;
|
•
|
been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or
state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
•
|
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended
or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
•
|
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in
Section 3(a)(26) of the Securities Exchange Act of 1934, as amended (the Exchange Act)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons associated with a member.
|
•
|
appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;
|
•
|
discussing with our independent registered public accounting firm their independence from management;
|
•
|
reviewing, with our independent registered public accounting firm, the scope and results of their audit;
|
•
|
approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
|
•
|
overseeing the financial reporting process and discussing with management and our independent registered public accounting firm any financial statements that
we file with the SEC;
|
•
|
overseeing our financial and accounting controls and compliance with legal and regulatory requirements;
|
•
|
reviewing our policies on risk assessment and risk management;
|
•
|
reviewing related person transactions; and
|
•
|
establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
|
•
|
identifying individuals qualified to become members of our Board of Directors, consistent with criteria approved by our Board of Directors;
|
•
|
overseeing succession planning for our executive officers;
|
•
|
periodically reviewing our Board of Directors’ leadership structure and recommending any proposed changes to our Board of Directors;
|
•
|
overseeing an annual evaluation of the effectiveness of our Board of Directors and its committees; and
|
•
|
developing and recommending to our Board of Directors a set of corporate governance guidelines.
|
•
|
reviewing and approving the corporate goals and objectives, evaluating the performance and reviewing and approving the compensation of our executive officers;
|
•
|
reviewing and approving or making recommendations to our Board of Directors regarding our incentive compensation and equity-based plans, policies and programs;
|
•
|
reviewing and approving all employment agreement and severance arrangements for our executive officers;
|
•
|
making recommendations to our Board of Directors regarding the compensation of our directors; and
|
•
|
retaining and overseeing any compensation consultants.
|
Name
|
Fees earned or paid in cash
($) |
Stock awards
($) |
Option awards(1)
($) |
Non-equity incentive plan compensation
($) |
Change in pension value and nonqualified deferred compensation earnings
|
All other compensation
($) |
Total
($) |
|||||||||||||||||||||
Executive Officers:
|
||||||||||||||||||||||||||||
Damian Lopez
|
$
|
$435,745
|
-
|
|
$
|
-
|