MGC Pharmaceuticals November 2015
Company Overview MGC Pharmaceuticals (MGC) , is a medical and cosmetic cannabis company with licenses to grow, extract and sell Cannabis Sativa in Slovenia, inside MGC Pharmaceuticals the EU. Capitalising on “Israeli Medical Cannabis IP” – world leaders in MGC holds unique genetics consisting of an the production and delivery of exclusive strain of “Cannabis Sativa” which comprises medical cannabis products of very low Tetrahydrocannabinol (THC) at below 0.3% and a very high Cannabidiol (CBD) content of above 10%. $2.7 million initial capital raising completed MGC is currently developing its own product range of cosmetic and over-the-counter (OTC) medical products in partnership with its JV partner, Dr. M. Burstein. 2
MGC Pharma- Key Points Of Difference • Positioned in the rapidly growing medical cannabis market (worth US$2.7bn globally) and cosmetic market (estimated at US$270bn globally in 2014) • Focused strategy to enter the Australian market following the favourable regulatory shift by the Federal Government • Unique genetics from exclusive strain of Cannabis Sativa comprising very low THC levels (<0.32) and high CBD levels (>10%) - yielding higher amounts of CBD by 4x against existing hemp crops • Fully Licensed Operation established in Slovenia to Grow, Extract and Import/Export into EU markets • Highly experienced team with commercial success in the medical cannabis industry in Israel - a world leader in the industry • Multiple revenue streams, with significant uplift from full production capacity to be realised in 2017 • $60m off take agreement for MGC’s initial CBD production starting mid 2016 • MGC cosmetic and OTC medical products – first sales and revenues end 2015 Sources: Credit Suisse – Market Research, ArcView Group, 3
MC Industry Leaders- Expertise and Experience Nativ Segev Roby Zomer Dr. Ross Walker Brett Mitchell Co-Founder and Co-Founder, President & Non-Executive Director and Executive Chairman Managing Director CTO Head of Advisory Board Joins upon completion of Previously CEO of Israel’s Mr Mitchell is a corporate Wealth of industrial Cannabis transaction second largest licensed Sativa (Hemp) managing and finance executive with over 20 A prominent practising Medical Cannabis company, years of experience in the extraction experience, he cardiologist and host of weekly Cann Pharmaceuticals. Mr. finance and resources shares Mr. Segev’s vision of radio 2UE program: Healthy Segev led the company to fully industries. Mr Mitchell has building a large scale Living. He has his own medical commercialize from startup been involved in the founding, European extraction facility practice and specialises in all position. Founded MGC and has the necessary skills to financing and management of aspects of echocardiography. Pharmaceuticals to expand both private and publicly-listed establish and run a successful Other area of expertise is in the into the huge European growing operation and companies and holds field of preventative cardiology. market for cannabinoids in the executive and non-executive extraction facility. He has He has published six books on cosmetic industry. extensive commercial directorship roles. preventative cardiology and business contacts in the regularly lectures both European industry. nationally and internationally. 4
Business Model MGC has a business model which closes the supply chain – demand exists for the end products and MGC is now working towards establishing the supply of the raw material. • Development of Cannabis Strains in Slovenian Laboratory Cultivation • Plantation and harvesting of crops in outdoor facility in Slovenia Multiple revenue streams – from CBD off-take • Crops to be processed on site at agreements and cosmetic Slovenian facility and CBD extracted and OTC medical • Targeting 60% purity CBD resin Extraction products sales. • MGC has the capability to process other crops on site Opportunity to leverage growing and extraction • Sell CBD Extract into: expertise in the Australian Distribution • Wholesale markets – other off-takes in pipeline Market. & Sales • Off-take with Natura JV to utilise in cosmetic products. 5
Medical Cannabis could be legally available in Australia as early as 2016 6
MGC Australian Strategy MGC to be first in line to exploit scalable commercial opportunities in Australia for CBD based expertise and products Appointment of Dr. Ross Walker as Non-Executive Director and Head of Strategic Advisory Board. Complete Collaboration with University of Sydney Business School on research and commercial opportunities in Australia. Leverage Dr. Ross Walker’s significant contacts in Australia and potential for access to distribution channels for MGC’s CBD products. Next Steps Take advantage of tax incentives from new Federal Government innovation and research push. 7
Global Market Opportunity – Medical Cannabis • Cannabinoids are legal in 23 U.S states and the medical cannabis market is estimated to be worth USD$2.7 billion globally in 2014 and US$10 billion by 2019 • In Canada the market for medical cannabis is expected to grow significantly, from $144m in 2014 • Common diseases for which Cannabinoids have shown high levels of efficacy have combined sales of +US$300 million to date Sources: ArcView Group, The HIA, Statista 8
Cannabidiol (CBD) – Global Potential Scientific and clinical studies indicate that CBD could be effective in easing symptoms of a wide range of difficult-to-control conditions, including: Tumors Multiple and Anxiety and Nausea Sclerosis Cancerous Depression Cells 1 Inflammatory Rheumatoid Schizophrenia Disorders arthritis Skin Conditions: Chronic Epilepsy Diabetes Psoriasis Pain 2 and Acne 1. CBD has demonstrated neuro-protective effects, and its anti-cancer potential is currently being explored at several academic research centers in the U.S. and other countries. 2. Impacts pathways in the body, which control pain and support the immune system, thereby delivering significant medicinal benefits in the treatment of chronic pain 9
Capital Structure Ordinary Performance Unlisted Cash Shares Shares Options Current issued capital 507,586,552 Nil 53,500,000 $2.0m Shares to be issued to consultants 3,846,700 Nil Nil Nil and prospectus shares Nil Nil 20,000,000 Nil Underwriting Options to be issued MGC vendor consideration 200,000,000 100,000,000 1 Nil Nil securities 711,433,252 100,000,000 1 73,500,000 ~$2.0m Total 1. 100,000,000 Performance Shares upon MGC securing an off-take agreement to sell commercial quantities of CBD resin that contains a minimum purity of 50%, and achieving first revenues of at least 1m Euro within three years, as detailed in ASX announcement dated 18 May 2015. Note- On completion of acquisition, MGC vendor securities will be escrowed pursuant to Ch 1&2 of the ASX Listing Rules 10
2015 Weekly Share Price Movement Share price movement 30 day moving average 60 day moving average 11
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