Greencare Capital - 2022 Interim Results

28 July 2022

Greencare Capital PLC

("Greencare" or the "Company")

Unaudited Interim Results for the six months ended 30 April 2022

Greencare (AQSE: GRE), the investment company focused on investing in medicinal cannabis, CBD and related wellness areas, today announces its unaudited interim results for the six months ended 30 April 2022.

Chairman's Strategic and Financial Review

Greencare is an investment company quoted on the Access Segment of the Aquis Stock Exchange ("AQSE") Growth Market, the successor to the NEX Exchange Growth Market ("NEX"). The Company was incorporated on 1 October 2019 and its shares were admitted to trading on NEX on 30 December 2019.

The Company's investment strategy is to focus on investments in the cannabis sectors within countries whose jurisdictions have well-developed and reputable laws and regulations for its production, research and distribution, together with the CBD and hemp sectors. The laws and regulations governing the cannabis sector are, however, continually evolving and the Company's investments, where applicable, will only focus on businesses and organisations with activities that are entirely lawful under the jurisdiction in which they operate and are either already lawful or are capable of being lawful in the UK. The Directors therefore believe that such activities are unlikely to be an offence under the POCA2002 in the UK and will seek appropriate legal advice prior to any investment.

The Company will invest directly or indirectly in public or private companies, in supply and distribution chains, or other business associated with the sector. Investments may take the form of debt or equity and it is expected that such investments will ordinarily seek capital growth in the medium term in preference to income.

Greencare plans to identify investment opportunities in the cannabis sector predominantly in Europe. Although there has been some volatility in the cannabis sector over recent months, the Directors believe that there continue to be investment opportunities within the cannabis sector as well as in the wider wellness industries and the fast-growing production, distribution, and other associated business sectors. The Company will not invest in the recreational cannabis sector, or in entities or activities supported by it, nor any other related activities which would be deemed illegal under UK legislation.

In 2021 the Company made 2 investments. The first was a £100,000 investment in Clearly Supplements Ltd. ("Clearly") a UK based company offering CBD products direct to customers. The investment is by way of a convertible loan note ("CLN") with a 5 per cent. coupon and a 12-month duration. The CLN is expected to convert at the time of a public listing at a 30 per cent. discount to the placing price at that time, subject to a maximum price of £157.50.

Clearly is planning to seek its own stock market listing in the UK and their application has progressed with the FCA and passed eligibility. They are now in a pre-IPO fund raising phase. We are in discussions with the management of Clearly regarding the conversion of the investment.

The second was an equity investment of £100,000 in Voyager Life Limited, subsequently re-named to Voyager Life plc ("Voyager") following its IPO on the Access segment of the Aquis Stock Exchange Growth Market in 2021. Voyager is a health and wellness business focused on CBD and hemp seed oil, that has developed a range of products under the Voyager and Voyager Life brands, including oils, gummies, bath and skincare products.

Voyager has grown considerably since our investment last year with over 50 formulated CBD and hemp products across the Voyager and Ascend Skincare brands, 3 of its own stores in Scotland and a distribution network that is now UK-wide.  More recently, the company has begun manufacturing its own topical and skincare products, both for its own brands and also white label and private label customers.  Voyager is expected to announce its own results in the coming weeks with its last trading update indicating revenues of £178,000 to 31 March 2022.  Importantly, the company's balance sheet is strong with approximately £0.6 million cash at bank at the date of this report and £140,000 of inventory.

During the period, the Company has looked closely at a number of investment and acquisition opportunities, in particular in South Africa and North Macedonia, for which due diligence and negotiation processes were almost completed. However, after careful consideration it was decided not to pursue these further.  This resulted in higher costs compared to the previous financial period. The Company continues to review other investment opportunities in the medicinal cannabis and wellness sectors.

Since publication of the Company's 2021 Final Results in April of this year, Richard Tonthat and Guy Winterflood have both stepped down from the board to focus on their other business interests. Both departed the Company with the Board's thanks. I was appointed to the board on 28 April 2022 as Non-executive Chairman and Martin Walton was appointed an independent Non-executive Director. Martin has many years' experience at Board level of companies within the life sciences, biotech and medtech sectors/industries and within investment and commercial banking. Our colleague Monica Formenti joined the board as a Non-Executive Director in September 2021. Monica qualified as a Lawyer in 2009 in Milan, Italy, and has practiced corporate and commercial law for a number of multi-national organisations. 

Outlook

The market outlook for medicinal cannabis still remains positive.  The Directors are of the opinion that there are exciting investment opportunities in those market sectors which the Company is focused upon. The regulatory landscape continues to evolve, and the Company is well placed to deploy funds to take advantage of these changes. The Board is constantly assessing potential transactions in cannabis, health, wellness and plant-based medicines and looks forward to updating the market further in the near future.

Dominic White

Non-executive Chairman

27 July 2022