The Board of Directors has today decided to issue 2,250,000,000 shares (at a price of DKK 0.002 per share) and 1,125,000 000 TO3 series subscription warrants, free of charge, to several external investors ("Tranche 1"). The investors have subscribed for all shares and warrants in Tranche 1. Today, the Board of Directors will also convene an extraordinary general meeting to be held on 10 December 2024 (the "Extraordinary General Meeting") with proposals to decide on the directed issue of 200,000,000 shares (at a price of DKK 0.002 per share) and 100,000,000 subscription warrants of series TO3, free of charge, on the same terms as in Tranche 1, directed to members from the Board of Directors and management ("Tranche 2"). Subject to the Extraordinary General Meeting adopting the proposals to issue Tranche 2, Jeppe Krog Rasmussen, Carsten Trads, Jes Lunde and Christian Carlsen will participate in Tranche 2. Upon the execution of Tranche 1 and Tranche 2 (the "Directed Issues"), the Company will initially receive a maximum of approximately DKK 4.9 million before deduction of transaction costs. Upon full exercise of the warrants of series TO3, the Company will receive an additional maximum amount of approximately DKK 3.2 million before deduction of transaction costs. The notice of the Extraordinary General Meeting will be published through a separate press release.

Tranche 1, through which 2,250,000,000 shares and 1,125,000,000 warrants of series TO3 are issued, is carried out with the support of the authorization obtained from the extraordinary general meeting on 7 October 2024 and is directed to external investors. The subscription price has been determined through arm's length negotiations with the external investors and amounts to DKK 0.002 per share. The Board of Directors considers the subscription price to be market-based and reflective of the demand for the Company's shares.

At the initiation of discussions with investors regarding the Directed Issues in early November 2024, the Company's shares were trading at a price of 0.0033 per share, representing a discount of approximately 39 per cent.

 Tranche 1 is directed to and has been subscribed by:

Tranche 2, through which 200,000,000 shares and 100,000,000 warrants of series TO3 are issued, is intended to be carried out on the same terms as in Tranche 1 and is proposed to be directed to Jeppe Krog Rasmussen, Carsten Trads, Jes Lunde and Christian Carlsen. Tranche 2 is intended to be decided upon at the Extraordinary General Meeting. A separate notice of the Extraordinary General Meeting will be issued. Tranche 2 is material to the investors in Tranche 1, but execution of Tranche 1 is not conditional upon the execution of Tranche 2.

Tranche 2 is directed to:

Terms for warrants of series TO3

For every two shares subscribed for in the Directed Issues, one warrant is received free of charge. One warrant of series TO3 entitles the holder to subscribe for one new share in the Company. The subscription price per share shall correspond to DKK 0,0026. The subscription period takes place during the period from 12 January 2026 up to and including 1 February 2026. The warrants are issued free of charge and are not intended to be admitted to trading. A total of 1,225,000 warrants of series TO3 may be issued in connection with the Directed Issues. Other terms of the TO3 warrants are set out Schedule A to the articles of association attached to this press release.

The Board of Directors' considerations regarding Tranche 1 and Tranche 2

Prior to the Board of Directors' decision on the implementation of Tranche 1, the Company Board of Directors has conducted a comprehensive assessment and carefully considered the possibility of raising capital through a rights issue. However, the Board of Directors believes that an issue deviating from shareholders' preferential rights is a better option for the Company and its shareholders. The reasons for deviating from shareholders' preferential rights are;

1. the rights issue of shares and warrants resolved by the Board of Directors on 24 May 2024 and whose subscription period ended on 19 June 2024, was subscribed to a total of approximately 56.71 per cent, of which guarantors subscribed for approximately 18.87 per cent through debt set-off. Consequently, a significant part of the Company's capital requirement remains unmet from this transaction;
2. that the Company is still in an important development phase and has an need for financing, to secure the Company's long-term operations, and that a rights issue would require significantly more time and resources to carry out and also entail a higher risk of a negative effect on the share price, especially in light of today's volatile and challenging market conditions, as a rights issue, compared to a directed issue, would likely need to be carried out at a lower subscription price given the discounts that have been offered in recent rights issues on the market;
3. that the implementation of Tranche 1 can be done at a significantly lower cost and with less complexity than a rights issue;
4. that the implementation of Tranche 2 can be done at a significantly lower cost and with less complexity than a rights issue. The participation of the Board of Directors and management show their long-term interest in the Company, which, according to the Board of Directors, creates security and stability for both the Company and its shareholders.

Considering the above, the Board of Directors is of the overall opinion that a directed issue of shares and warrants deviating from shareholders' preferential rights is the most advantageous and quick option for both the Company and all its shareholders.

Prior to the Board of Directors' decision on the implementation of Tranche 1, the Board of Directors has also placed great emphasis on ensuring the market-based nature of the subscription price in relation to the prevailing share price. The subscription price has been determined through arm's length negotiations with the external investors and amounts to DKK 0.002 per share. Given that the subscription price has been determined through arm's length negotiations with the external investors, the Board of Directors' assessment is that the subscription price reflects the prevailing market conditions and demand and is thus market-based.

At the initiation of discussions with investors regarding the Directed Issues in early November 2024, the Company's shares were trading at a price of 0.0033 per share, representing a discount of approximately 39 per cent.

As the subscription price in the Tranche 2 corresponds to the subscription price in the Tranche 1 determined through arm's length negotiations with the external investors, it is the Board of Directors' assessment that the subscription price reflects the prevailing market conditions and demand and is thus market-based.

Use of issue proceeds

The Company reached significant milestones during the first half of 2024, following a strategic business review. Positive EBITDA were reached during the second quarter, marking a key step in the long-term financial plan. Additionally, quarterly revenues reached an all-time high of 3.86 MDKK in the same quarter, contributing to an overall revenue increase of 57 per cent year-over-year in H1 2024. The Company also became debt-free, establishing a strengthened financial position without liabilities.

Sales performance was strong, with approximately 9,700 packages of medicine sold in H1 2024, reflecting a 40 per cent increase year-over-year. Furthermore, the Company made additional submissions to the Danish Medicines Agency, with specific pending submissions including EXT02, FLS04, and FLS05, as part of its ongoing regulatory strategy.  

In light of these developments and keep the momentum DanCann Pharma is currently experiencing, the Company is proceeding with the Directed Issues of shares and warrants. The Directed Issues is expected to generate initial gross proceeds of approximately DKK 4.9 million before transaction costs.

The net proceeds are intended to be allocated as follows:

• Investments in product dossiers for submission under the Pilot Programme with medicinal cannabis under the Danish Medicines Agency
• Investments in the new over-the-counter (OTC) medicine strategy
• Working capital for DanCann Pharma's long-term operations

Costs

The Company's total costs in connection with the Directed Issues are estimated at DKK 0.8 million.

Shares, share capital, and dilution

Assuming that the Extraordinary General Meeting resolves to approve Tranche 2, the Directed Issues will result in the number of outstanding shares in the Company increasing by 2,450,000,000, from 1,541,101,234 to 3,991,101,234, and the share capital increasing by nominally 2,450,000 DKK, from nominally DKK 1,541,101.234 to nominally DKK 3,991,101.234, resulting in a dilution effect of approximately 61.4 per cent.

In the event that all warrants of series TO3 are exercised, the number of outstanding shares will increase by an additional 1,225,000,000, and the share capital will increase by additionally nominally DKK 1,225,000. Based on the existing share capital of DKK 1,541,101,234, this will result in an additional dilution effect of approximately 23.5 per cent and a total dilution effect of approximately 70.5 per cent.

Extraordinary General Meeting

The directed issues in Tranche 2 are subject to the so-called Leo rules by the Spotlight Stock Market rules. Accordingly, a resolution of the Extraordinary General Meeting is only valid if it has been supported by shareholders representing at least nine-tenths (9/10) of both the votes cast and the shares represented at the Extraordinary General Meeting. The notice of the Extraordinary General Meeting will be published through a separate press release.

Advisors

Eminova Partners Corporate Finance AB act as financial advisor, and Nordic Issuing AB and Euronext Securities Copenhagen have been appointed as issuing agents, in connection with the Directed Issue. Mazanti-Andersen is legal advisor to DanCann Pharma in connection with the Directed Issue.

For further information regarding the Rights Issue, please contact:

Jeppe Krog Rasmussen, CEO

E-mail: jkr@dancann.com

About DanCann Pharma A/S

DanCann Pharma A/S (SS: DANCAN) was founded in 2018 and is a Danish biopharmaceutical Company powered by cannabinoids.

DanCann Pharma A/S (SS: DANCAN) is listed on the Spotlight Stock Market in Copenhagen/Stockholm.

For more information, visit: www.dancann.com

Forward-looking-statement:

Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events, or developments that the Company believes, expects, or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology.

Forward-looking statements are subject to several risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company, to obtain sufficient financing to execute the Company's business plan; competition; regulation and anticipated and unanticipated costs and delays, the success of the Company's research strategies, the applicability of the discoveries made therein, the successful and timely completion and uncertainties related to the regulatory process, the timing and outcomes of regulatory or intellectual property decisions and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities.

Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. The forward-looking statements included in this presentation are made as of the date of this presentation and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

This disclosure contains information that DanCann Pharma 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 25-11-2024.