IPO - Elixinol Global Limited, page-68

In preparation for the listing of Elixinol Global (EXL) today at 11am it is worthwhile considering some of the key events since the deal was priced, road showed and now listing. In October and November we raised $20m for Elixinol Global to be used to fund the submission for licences, development and construction of a Medicinal Cannabis business in Australia, working capital for the existing Hemp Food and Elixinol US CBD Nutraceuticals business and listing costs. At the issue price the mkt Cap is $102m and the EV is approx. $85m. The founding shareholders and early investors are escrowed for 2years. Paul Benhaim the co-founder off the 3 businesses will own 53% of the company upon listing and his partner in the US business D&G Health will own 12%. The IPO was supported by a dozen domestic and offshore institutions as well as a number of high net worth individuals.


Since the  successful completion of the IPO there have been a number of significantly meaningful events relevant to Elixinol Global’s 3 businesses:


·On Nov the 12th Hemp Food was legalised in Australia expanding the opportunities for sales and marketing which has started and will continue to build.

·On DEC 13th the World Health organisation (WHO), the health agency of the United Nations, officially recommended that CBD not be internationally scheduled as a controlled substance. WHO research on CBD’s therapeutic use and side effects found that the cannabinoid was not a public danger.

·On Jan 4th 2018 The Health Minister of Australia Greg Hunt announced the Federal Government would allow manufactured cannabinoid medicines to be exported from Australia. Minister Hunt also expressed the view that he would like to see Australia as a global leader in the Medicinal Cannabis Industry. This announcement was a surprise in terms of its timing and addresses one of the main concerns investors had during the IPO roadshow in relation to how quickly the market for Medicinal Cannabis in Australia can grow due to the legislative framework in place.


Although there are no directly comparable listed companies to Elixinol Global when we were pricing the IPO we looked at CAN, MMJ, CPH, ZLD, AC8 and MXC as companies in the sector with some relevance to EXL. Since Oct 2017 the factors outlined above and the general improved understanding of the broader market has seen these stocks on average increase in value by approx. 150%.


Elixinol Global has more revenue than all of these companies combined. EXL has established business channels in the CBD Nutraceutical business in the US and Europe. In the Hemp Food Australia business they are operating their current manufacturing facility at 30% capacity and have planted their first major crop in Australia which will be ready for harvest in March 2018. In relation to Medical Cannabis the IP and infrastructure the group has built up over the last 4 years in the US and Paul’s long history in Australia with the regulators uniquely positions Elixinol to build a business and a brand in a very exciting time for the Medicinal Cannabis industry.


Please see attached link to an article from today’s Australian and the prospectus:


http://www.theaustralian.com.au/bus...l/news-story/b21955f0480b1fabce613728cacf5d9d