Medical Kiwi for Wholesale Investors

By Medical Kiwi

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About

Medical Kiwi for Wholesale Investors

21 January 2022

Dear shareholder

 

Re:  Enforceable Undertakings given to the FMA

On 22 December, Medical Kiwi advised all shareholders about Enforceable Undertakings which the company has given to the Financial Markets Authority (FMA). These Undertakings recognise misstatements made during our crowdfunding programme in August 2020.

The Board apologises to Medical Kiwi shareholders for the misstatements and for the need to give these Undertakings, long after the crowdfunding programme. Medical Kiwi is, of course, a substantially more developed Company in 2022 with its Christchurch cannabis cultivation plant now in operation, a new sales agreement in place, an enlarged and experienced Board, and a broad base of local and international investors.

We write to you now as the Board’s next step for immediate fulfilment of the Undertakings.  

At this point, the Board provides you with a “Corrections of Statements” immediately below this letter with the full Enforceable Undertakings document contained in this link

Should any shareholder who invested in Medical Kiwi through the crowdfunding programme now wish to exit that investment, they may do so by taking up a refund offer from the Company. Any eligible shareholder will be paid back the $1 per share purchase price at their request.

The offer will close at 5pm on Friday 11 February.  The offer may be taken up through completion of the Refund Application Form contained in this link and emailing this to [email protected].

The Board welcomes any questions or comments on the Undertakings and/or the share refund offer. The Board welcomes any questions or comments on the Undertakings and/or the refund offer.  Please email [email protected].

Looking ahead, we remain confident in the future growth and success of the Medical Kiwi business.  This outlook will be unaffected by the Undertakings and share refund process.

 

Sincerely

Aldo Miccio
Executive Chair, on behalf of the Medical Kiwi Board

 

APPENDIX — CORRECTIONS OF STATEMENTS

Medical Kiwi made certain statements at the time of its crowdfunding offer on the PledgeMe website (August/September 2020) that have been the subject of inquiries by the Financial Markets Authority (FMA). The outcome of those inquiries is that that Medical Kiwi has admitted those statements were incorrect or misleading and therefore breached Part 2 of the Financial Markets Conduct Act 2013. Medical Kiwi and the FMA have agreed that Medical Kiwi gives enforceable undertakings in order to address those breaches. The enforceable undertakings are attached in full.

As part of the enforceable undertakings, Medical Kiwi has agreed to issue a correction of the statements in question. The statements and corrections are set out below.

Representation as to licences

In its Information Memorandum (IM) issued as part of the crowdfunding offer, Medical Kiwi made various disclosures in relation to medicinal cannabis licences held, or applied for including:

  • “Medical Kiwi is in a unique position as one of a few licensed New Zealand companies…”
  • “Since 2018 we have… been granted a licence to cultivate from the Ministry of Health with further licenses pending”
  • “Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis
    and CBD products for both the local and international markets once the licenses are granted.”
  • “In August 2019, just eight months after being established, we became the first South Island based medicinal cannabis company to be granted a licence to cultivate for research. We’re an applicant for licenses to cover the full range of our activities and anticipate these being granted very soon, now that the Medicinal Cannabis Scheme is operational.”

Medical Kiwi should have but did not qualify the above by noting that the licence that it held at the time: (i) was due to expire on 22 August 2020; (ii) could not be renewed or extended; (iii) was specifically associated with Medical Kiwi’s Brightwater Facility in Nelson and did not apply to operations at its Christchurch Facility; and (iv) was never active as it was conditional on a site inspection which was never completed.

At the time of the IM, Medical Kiwi planned to let the Brightwater licence lapse as that site was no longer part of Medical Kiwi’s immediate plans. Medical Kiwi was in the process of obtaining a new licence in order to retrofit a Christchurch facility. Medical Kiwi’s application was being assessed by the Ministry of Health, and it did not anticipate any issues based on the exchanges with the Ministry to date. The Ministry of Health granted the licence for the Christchurch facility on 3 December 2020.

Medical Kiwi should have made it clear in the IM that its current licence was not yet active and was about to expire, and that its plans were based on the Ministry of Health granting a licence for the Christchurch facility (which had not yet happened). The statement at (a) to (d) above ought to have been amended accordingly:

  • Medical Kiwi is in a unique position as one of a few licensed New Zealand companies…
  • “Since 2018 2019, we have held an active been granted a licence to cultivate (including a research component) from the Ministry of Health, but we have a further application for a licence in place and are awaiting Ministry approval with further licenses pending”.
  • “Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis and CBD products for both the local and international markets once the licenses are granted pending confirmation of a licence to cultivate from the Ministry of Health.
  • “In July-August 2019, just eight months after being established, we became the first South Island based medicinal cannabis company to be granted a licence to cultivate for research. That licence (associated with our Nelson facility) has never been active and we are intending to let that lapse given our plans have shifted away from operating in Nelson.  Instead, we are focused on our facility in Christchurch and have applied for a licence from the Ministry of Health for that facility, which we are hopeful will be granted soon We’re an applicant for licenses to cover the full range of our activities and anticipate these being granted very soon, now that the Medicinal Cannabis Scheme is operational.”

Representations regarding contractual arrangements

Medical Kiwi made statements in its IM about its supply arrangements including that it had “signed partnership agreements… including pre-selling our entire first two years production worth $90 million to Hektares, a global player in the cannabis industry”. Medical Kiwi repeated the statement about having presold the first two years production throughout the IM.

The arrangement that Medical Kiwi had in place with Hektares was a letter of intention to supply. It was able to be terminated by Hektares. Although Medical Kiwi did not anticipate this at the time of the IM, the parties ended up mutually withdrawing from this arrangement. Medical Kiwi accepts that it ought to have made that risk clearer. For example, rather than stating it had pre-sold production to Hektares, stating that:

“We have strong interest from a global player in the cannabis industry, Hektares, to pre-purchase approximately $90 million worth of product.  Hektares has signed a letter of intention to purchase, although we note that arrangement is not binding and may be terminated by Hektares”.

 

Q&A on PledgeMe Campaign Page

On 2 August 2020, Medical Kiwi was asked a question on the PledgeMe Campaign Page:

“Is your purchase agreement binding? I ask this question due to the fact PURO NZ claimed they had purchase agreements and when they came to sell, their agreements were non binding”.

Medical Kiwi responded:

“There’s always a risk that a client will not be able to perform their contractual obligations whether it’s a binding or nonbinding MOU, contract or agreement of any nature. Our team is confident that Hektares have the ability and resources as well as intent to fulfill [sic] their contractual obligations. … More the issue is that Medical Kiwi may not be able to satisfy the demand from Hektares, as reflected in the risk section of our IM. Our IM financials reflect what we believe we can satisfy while also diversifying with other clients to try and mitigate any risk from a single client.”

Medical Kiwi accepts that it should have clearly conveyed that the agreement with Hektares was a letter of intention to supply and was able to be terminated. The answer should have said, for example:

“The purchase agreement is a letter of intention to supply and may be terminated by Hektares.  Although we are not aware of anything to suggest that Hektares will not proceed with this order, it is possible that it may decide not to do so.”

 

Conclusion

Medical Kiwi unreservedly apologises for the misstatements outlined above.

 

 

This campaign page is for wholesale investors (please find the definition below). If you're not a wholesale investor and arrived on this campaign page unintentionally please register your interest for future public equity crowdfunding rounds here

 

Definition of Wholesale Investor

A wholesale investor can be defined as people who meets any one of these 5 criterion:

  1.  are an investment business, in that their principal business involves investing in financial products, acting as an underwriter, providing financial advisory services, providing broking services or trading financial products;
  2. have, during the previous two year period, owned a portfolio of, or carried out transactions to acquire financial products of a value of at least $1 million;
  3. have, in the previous two years, materially participated in the investment decisions made by an investment business;
  4. have, or any entities controlled by them, have, as at the last day of the two most recently completed financial years, net assets or total consolidated turnover exceeding $5 million;
  5. are "eligible investors", and have certified that they have previous experience in acquiring or disposing of financial products that allows them to assess:
  • the merits of the transaction;
  • their own information needs in relation to the transaction;
  • the adequacy of the information provided, that they understand the consequences of so certifying, and the grounds for this certification; or
  • an authorised financial adviser, a chartered accountant, or a lawyer signs a written confirmation of the certification. 

 


We are focused on being part of the way the world delivers its healthcare by taking an innovative, science-based approach to developing and delivering cannabinoid products for those who need them the most.

 


From the Founder


More and more people are realising the benefits of plant-based remedies and alternative therapies. And their experiences are supported by a growing library of medical research which continues to identify the therapeutic benefits and pharmaceutical uses of medicinal cannabis and cannabidiol (CBD) for a range of ailments and conditions.

Like you, we’ve been watching with interest as countries around the world open up access to medicinal cannabis and CBD products. We’ve read the research, talked with start-up companies and listened to the amazing stories from those using these products about the positive impact it has had on their lives.

The potential of the medicinal cannabis and CBD wellness industry is shown in the rapid growth and scale achieved by businesses in countries to have already legalised the cultivation, production and use of these products. And as scientists learn more the demand is increasing. Globally, the medicinal cannabis industry is forecast to be worth USD $150 billion by 2025. (Grand View Research, 2018)

We believe that medicinal cannabis and CBD are part of a long-overdue health and wellbeing revolution that could replace so many other pharmaceuticals and benefit millions of people. We’re excited about the opportunity to bring these products to market in New Zealand.

Medical Kiwi is in a unique position as one of a few licenced New Zealand companies poised to create value and carve out a significant share of this emerging and exciting global industry.

We’re ready! Since 2018 we have:

• built a strong health-based, scientific and business savvy team

• developed a clear plan for product development, distribution, and research

• successfully raised our initial seed fund capital

• signed partnership agreements with global industry-leading companies, including pre-selling our entire first two years production worth $90 million to Hektares, a global player in the medicinal cannabis industry

• secured a greenfield site for our state-of-the-art facility in Nelson, and secured a 20-year lease for our initial factory in Christchurch

• been granted a licence to cultivate from the Ministry of Health with further licences pending

You’ll see throughout this document we talk a lot about providing certainty - certainty about our plans, about this investment opportunity and about the regulations that will govern the industry in New Zealand. We have chosen to take a conservative approach and wait until we have a complete picture of what New Zealand’s medicinal cannabis industry could look like before taking our investment opportunity to the market. We believe the timing is now right.

The future is exciting and you can be a part of it. We know that many Kiwis want to help Kiwis have greater access to safe, consistent, affordable, high-quality medicinal cannabis and CBD wellness products. The time to participate in the opportunity that Medical Kiwi represents is now.


Aldo Miccio

Co-Founder and Chairman

New Zealand is adding its name to the growing list of countries changing legislation to enable access to high-quality, affordable medicinal cannabis and CBD products and we think that’s exciting!

Until recently, cannabis has been a globally prohibited substance. Many people are unaware of the medicinal properties of cannabis and those who want to use it for medicinal purposes can face crippling costs and a severely restricted and unreliable supply. Scientists believe the bioactive constituents in cannabis can provide a range of physical and psychological health benefits. Medicinal cannabis products are in demand in countries that have already legalised the cultivation, production and use of full-spectrum medicinal cannabis products and CBD, and as scientists learn more about the therapeutic benefits and pharmaceutical uses, demand is increasing.

In December 2018 New Zealand’s Government passed legislation intended to improve access to medicinal cannabis and CBD products. The Medicinal Cannabis Scheme enables domestic cultivation and manufacture of medicinal cannabis products, and enables the setting of minimum quality standards for products and all stages of production. The regulations that govern the Scheme were announced by the Ministry of Health in December 2019. From 1 April 2020 New Zealand companies can now grow cannabis for the purposes of making medicine. They are also permitted to produce and distribute that medicine.

The products will still need to be prescribed by a doctor, and can only be bought directly from a medical practitioner or pharmacy. It’s encouraging that licences to cultivate, manufacture and supply medicinal cannabis products will be affordable which will help New Zealand businesses compete well with overseas providers.

Alongside the legislative change, New Zealand society’s attitudes towards medicinal cannabis are also evolving. A poll commissioned by the New Zealand Drug Foundation in 2018 found that 87% of New Zealanders support medicinal cannabis for the treatment of pain and 89% support the use of medicinal cannabis as terminal pain relief.

A major opportunity now exists for companies to leverage New Zealand’s provenance, reputation for innovation and areas of competitive advantage to cultivate, produce and sell medicinal cannabis and CBD products domestically and globally.

And Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis and CBD products for both the local and international markets once the licenses are granted.

 


Size of the market

250,000 New Zealand  casual cannabis users, 25,000 New Zealand  pallative care users, Globally $150 billion  by 2025

The global industry is poised to grow by USD $22.33bn during 2020-2024 at a compound annual growth rate of over 24%. The New Zealand Ministry for Business Innovation and Employment (MBIE) forecasts the domestic medicinal cannabis market to reach $320-$500m within 10 years, and $250m worth of exports. The broader cannabis health product segment could represent a $1b market opportunity per annum in New Zealand.

The New Zealand Ministry of Health estimates that more than 250,000 casual cannabis users use it for medicinal purposes. There are also approximately 25,000 New Zealanders that need or could benefit from the introduction of medicinal cannabis products for palliative care each year (Business Wire, 2018).

The global cannabis market is estimated to be valued at USD $150 billion by 2025 (Grand View Research, April 2018).

 


Our innovative plans to cultivate change 

New Zealand’s Medicinal Cannabis Scheme has been operational since 1 April 2020 which allows for the local cultivation and manufacturing of medicinal cannabis products that will potentially help ease the pain of thousands of people.

This sentiment is at the heart of our innovative plans to cultivate change. We have a clear philosophy to realise the local and global opportunities for high-quality, safe and consistent medicinal cannabis and CBD products to bring about real change in people’s lives and health outcomes.

Learn more about our innovative plans to cultivate change in our Information Memorandum:

 


Advancing the industry through research 

We’re committed to an ongoing programme of advanced research and technology to support the development of our unique, safe, high-quality Medical Kiwi medicinal cannabis products. We plan to adopt relevant global technological advancements and work with industry leaders in research and development which will allow us to be agile in our response to market needs with the goal of setting an elevated benchmark as innovators and leaders in the industry.

Our research schedule consists of:

• International collaboration into the effects of the bioactive components contained in cannabis

• Research into the effects of growing conditions, especially light, on cannabinoid and other active ingredient outcomes, in a replicable way

• Develop, or contribute to, certification of standardisation of the beneficial bioactive properties of cannabis extracts

• Establishing protectable intellectual property

 

 


Cultivating consistency and certainty 

We have an uncompromising commitment to consistency and certainty. We aim to achieve this by breeding and growing cannabis strains of the highest quality in our state-of-the-art facility with indoor production processes, and partnering with global industry-leading companies that have the same commitment.

Our state-of-the-art indoor medicinal cannabis research, cultivation and processing facility will be based in Nelson. We have secured an eight-hectare greenfield site in Brightwater which is strategically located for operational logistics and product distribution. Plans for an 8,000-10,000 m2, two-story building have been developed. The facility will be built by a developer with Medical Kiwi leasing it at market rates. Due to Covid-19 delays, we now expect to start building this facility in the next 12-18 months.

Meanwhile, to become operational sooner, we have secured a lease on a building in Christchurch that is already fit for purpose and can comply with the strict New Zealand and international Medicinal Cannabis licensing conditions. We will operate solely from this facility until our Nelson site is ready.

Sustainability and environmental responsibilities were central to the development of our building plans which include extensive solar power, energy-efficient initiatives and sustainable considerations in all aspects of its ongoing operations, such as waste disposal. It is envisaged that early engineering will maximise energy efficiency so that the entire building and growing system’s electricity can be powered by a one-megawatt solar power energy system. The facility will also incorporate sophisticated security systems, world-class growing room-specific apparatus such as climate control, irrigation, lighting and extraction system.

When in full production, estimated to be early 2024, our Nelson facility is designed to produce 30,000 - 35,000 kg of dried product per annum, with a value today of $100 - $110 million. Our Christchurch facility will be equipped to produce 6,000 - 10,000 kg of dried product, valued today at $18 - $30 million per annum.

We believe our facilities and the products we create will have significant economic benefits for the Nelson Tasman and Christchurch regions, and for New Zealand, and we expect to employ 190 staff when in full production.

Learn more about our facilities in our Information Memorandum:

 


Manufacturing and distributing unique products 

With an emerging industry, it is important that advances are aligned with customer segments and demands. Our marketing insights will inform our cultivation, manufacturing and distribution decisions. We aim to create fit-for-purpose, verified and credible medicinal cannabis and wellbeing products utilising innovative science and technology. By partnering with Empirical Labs, a world leader in formulation and enhanced delivery methods, we believe we can get proven medicinal and wellness cannabis products to both the domestic and global market quicker.

Our exclusive distribution agreements with Vitality CBD and Liberty Herbal Technologies mean we’re well positioned to be one of the first to market with high-quality, innovative products. It also means we could establish distribution networks that we can use for our own unique Medical Kiwi produced products.

Learn more about our facilities in our Information Memorandum:

 


We’re a team committed to scientific, health-based success 

We have a strong health-based, scientific and business savvy team-leading Medical Kiwi’s exciting future. Our team of professionals in medicine, biochemistry, governance, investment and sales oversee Medical Kiwi’s operations.

We’re confident their specialist knowledge, skills and proven corporate governance put Medical Kiwi in a position to achieve our goals and begin generating revenue from early 2021.


Aldo Miccio
Director and Chairman

Aldo has had an extensive international career in senior management and governance as well being a past Mayor of Nelson. His broad experience, spanning 27 years, includes executive chairmanships and directorships in industries ranging from property, retail, agriculture and FMCG to public and state services. With an entrepreneurial spirit and strong commercial background, his expertise includes strategic planning, product management and design, and sales and marketing. The opportunity to enhance community wellbeing and enable changes in people’s lives and health outcomes was a key driver for him co-founding Medical Kiwi.


Peter Win
Director (Operations)

Peter has considerable breadth and depth of business experience, with a passion for pioneering new industries. He has worked in some of the most technically advanced industries, reaching senior levels of management in large-scale international energy projects and the marine engineering industry. Peter’s motivation for co-founding Medical Kiwi was a strong belief in the potential of medicinal cannabis to improve social wellbeing and provide health benefits for the wider community after experiencing how the industry had helped build better communities overseas.


Dr David Porter
MBChB, FRACP
Director (Medical)

David is a Consultant Rheumatologist with 27 years’ experience in the medical field. Porter Rheumatology, David’s practice in Nelson, provides specialist medical and nursing care to people with auto-immune and inflammatory disorders, as well as fibromyalgia patients. David is committed to finding more effective, accessible and affordable ways to manage his patients’ pain. David joined Medical Kiwi because he’s passionate about providing the highest quality medicinal cannabis products at the best possible price point.

“I’ve been prescribing CBD for my fibromyalgia patients since it became legal 2 years ago. Conventional pharmaceuticals tend to be ineffective at treating this condition and commonly cause debilitating side effects like drowsiness or mental fogginess. In stark contrast, CBD has proven to be head and shoulders above other treatments in terms of its lack of side effects, most importantly, but also the very considerable benefits to sleep, relaxation and pain relief. It is by far the most beneficial treatment I’ve used for these patients.”


Dr Michael Packer
PhD (Biochemistry, Cell Biology), MSc (Marine Science), BSc (Biochemistry)
Director (Science and Research)

Michael is a biochemist and natural products biotechnologist with a career spanning 28 years and an extensive track record of scientific research. Algae farming methods for carbon recycling/capture, biofuel production, bio-based materials and for healthy food ingredients, bioactives, nutraceuticals and cosmetic ingredients has formed the basis of his research and professional specialty. His work involves using custom-built bespoke photobioreactors which enable algal growth under controlled conditions. He is excited to bring his knowledge and expertise to Medical Kiwi to help guide rigorous evidence-based development of natural products to benefit human health.


Bruce Whall
CA, B.Comm (UNSW), FAICD
CFO

Bruce is an experienced senior finance and business executive with wide-ranging management experience and a clear understanding of the mechanics of business. With a career spanning 40 years, Bruce has extensive competency across strategic business planning, mergers and acquisitions, finance, accounting, taxation, working capital management, treasury and operations.


Nic Kidson
GM Sales & Marketing

Nic has a sales, marketing and business background that spans more than 20 years across a range of industries, including New Zealand’s niche seafood and wine industries. She brings a wealth of knowledge and diverse practical business application, as well as a passion for health, wellbeing and the environment. Nic is excited about what medical cannabis can do for people and wants to be a part of all the good that it can do for New Zealanders.


Learn more about our team and our partners in our Information Memorandum:

 


Share Offer 

Medical Kiwi is seeking to raise $3 million of investment capital in support of our business strategy.

Current shares on issue

In order to successfully market Medical Kiwi we have used an integrated channel network of trusted partners, including online platforms, private equity funding, and now crowdfunding specialists.

The company was formed with 30,000,000 shares. An additional 2,560,000 shares were issued in the seed funding round. There are now 3,000,000 shares on offer through our crowdfunding investor and wholesale investor raise which will bring the company to a total of 35,560,000 shares. Convertible notes have also been issued in receipt of loans, with the option of converting to shares within the next ten years. Should the option to convert be fully taken up, 3,257,700 shares would be issued.

There are two types of shares on offer: Class B Investor shares and Class A Ordinary shares (more detail below). Class A Ordinary shares shall have the same rights attaching to them as the existing shareholders in the company including the right to vote at shareholders meetings.

Class A Ordinary Shares shall have voting rights attaching to them enabling these shareholders to vote at shareholders meetings.

The minimum holding for Ordinary Shares has been set at 40,000 shares. Wholesale investors must submit a completed certificate confirming the applicant’s status as a wholesale investor as defined in clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013. A copy is available on request. Class A shares will be capped at no more than 50 shareholders.

Class B Investor Shares shall carry non-voting rights at a shareholders meeting. The maximum any one investor can invest via the crowdfunding campaign is $200,000.00 (equivalent to 10% of the maximum capital raising).

 


Financial projections

The financial projections for Medical Kiwi have been based on research from Canada, the United States and Australia while taking into account our local legislation and environment. Some of this information is a combination of data from companies that are currently producing medicinal cannabis products as well as anecdotal information.

Strong growth is expected as regulation takes hold, the industry becomes more established, new market segments emerge and facilities are expanded. Financials are based on a three-way cash- flow forecasting model, incorporating full profit and loss and balance sheet forecasts.

 

Read our financial assumptions and balance sheet in our Information Memorandum: 

 

 


Risks and Mitigation

A flooded market with increased competition
We believe our points of difference will set us apart from the competition. These include being one of the first companies to bring products to the market now that the Medicinal Cannabis Scheme is operational, and establish brand presence. Our operations will aim to cover the full process from cultivation to the production of rapidly evolving consumer products. We believe our seed-to-sale vertical integration approach will set us apart from other companies in New Zealand who might focus solely on cultivation or research.


Unforeseen circumstances delay the build of the facility, research and product development
We have consulted extensively with design experts in relation to the layout and design of our state-of-the-art facility. In the unlikely event of further delays, our planning ensures we can continue to operate out of our Christchurch factory while building work is being completed.


Our Christchurch factory is not ready on time
If the ontime completion of the Christchurch facility in October 2020 was delayed, it would affect the timing of the first cultivation cycle, and could affect sales revenue and license approval timing. Our team and processes will attempt to mitigate this risk.


Our Hektares deal falling through or not being delivered in full
We have spent significant time on this deal. We currently have an MOU and a supply agreement in place with Hektares, and once our facility is complete in Christchurch we will be formulating an order and delivery schedule from January onwards. As noted in the risk above, our timelines could be delayed. There is also a possibility that in Year 2 of our agreement we will not be able to fulfill the full order as noted in our financial assumptions, but we are evaluating different ways as our plans rollout of meeting their current demand (and that of other potential buyers).


Failure to raise capital
If we are unable to raise the minimum $500,000 sought, we will seek further funding from private investors.


Working Capital/Cashflow
Our financial forecasting shows that we have adequate working capital.


Market price of raw materials reduces
We will aim to produce value-adding high-grade medical cannabis products as a point of difference.


Failure of crops
Our crops will be grown indoors in a safe, controlled environment. We will rotate and segment our growing areas. Both of these approaches will minimise the risk of damage to crops.


Challenges with distribution of imported and our own products
We have successfully established distribution and uptake agreements with international companies with Memorandum of Understandings in place and additional agreements currently under discussion. Our strategy to import and distribute our partners’ products is designed to have a two-fold advantage: 1. It would create short-term and ongoing cash flow for the business. 2. It would establish distribution networks that could be utilised once Medical Kiwi production is established.

 

 

 


A Note from PledgeMe

We have completed a Veda check on the company and its Directors, as well as Google checks. One Director, Peter Win, had two bank defaults on his credit report from a previous relationship that he is disputing. There were no other adverse findings. The Directors have also all passed police vetting and responsible person's tests as part of the cannabis research license approval.

Updates

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Details

Offer Details

Current Valuation 32,560,000
Raise Minimum 5,000
Raise Maximum 1,000,000
Share Price 1.00
Minimum Pledge 500.00
Maximum Shares Offered 1,000,000
Explanation of valuation:

Our offer reflects a valuation undertaken by financial advisors and has been based on international market research from Canada, Australia and the United States of America.

This includes anecdotal information as well as data from companies currently producing medicinal cannabis products. It is important to acknowledge that, as this is a new and emerging industry both globally and in New Zealand, it is difficult to perform a comparative analysis.

We have valued Medical Kiwi and the company shares at a pre-raise valuation of $32,560,000.

The valuation we believe is conservative, with Medical Kiwi adopting lower profitability and revenue formulas than what is generally accepted in the industry. We have discounted valuation multipliers of net profit after tax to a factor of approximately 2.75 based on NPAT of $11,880,022 by the end of 2021, to give us our valuation of $32,560,000. This is of course backed against sales agreements in place and assumptions as outlined in earlier sections.

The valuation we have undertaken can be compared to other similar companies in the industry. The table in our Information Memorandum reflects three cannabis companies with a presence in New Zealand and Australia, and how their respective actual retained earnings (losses) compare with market capitalisation on their respective stock exchanges.

Financial Summary

Prev Year Current Year Est. FY 2025 Est. FY 2026
Revenue NZ $0 NZ $0 NZ $23,582,667 NZ $36,486,833
Operating Expenses NZ $575,247 NZ $484,573 NZ $4,710,601 NZ $6,774,931
EBITDA -NZ $575,247 -NZ $484,573 NZ $16,338,816 NZ $24,631,502
Net Profit -NZ $575,774 -NZ $584,922 NZ $11,880,022 NZ $17,537,783

Company Details

Company Name: Medical Kiwi Limited

Company Number: 7135337

Company Documents

Documents no longer available to download, as this campaign has closed

Director Details

Name Role Profile URL Invested?
Aldo Miccio Director and Chairman https://au.linkedin.com/in/aldomiccio
Peter Win Director (Operations) https://nz.linkedin.com/in/peter-win
Dr. David Porter Director (Medical) https://nz.linkedin.com/in/david-porter-nz
Dr. Michael Packer Director (Science and Research) https://nz.linkedin.com/in/mike-packer

Questions 2


What are the sales channels for the Hektares? they seem to be light on substance, and only seem to have a not very special deal with CDA clinics in Australia.

Posted on 04-09-2020 by Shane Le Brun

Hi Shane
Hektares sales channels are through medicinal cannabis manufacturers and wholesalers as well as some prescription clinics. These clients are a combination of entities that they have existing strategic relationships with, as well as clients of entities that they have the strategic relationships with, across North America, Europe and Asia. Aldo is arranging calls with potential wholesale investors, so would be happy to call you too? Please feel free to email me directly: [email protected]. Regards Nic

Answered on 07-09-2020 by Medical Kiwi


Hi, so I was told my address couldn't be verified so emailed 2 types of proof of address that was 2 days ago and I havent heard back. Can someone please tell me why.
Thanks Rachelle

Posted on 02-09-2020 by Rachelle&Chris Deeprose

Hi Rachelle, thanks for your question. We have had a lot of responses and we are working our way through the AML processing to verify investors. You should hear from the team within the next few days.
Much appreciated,
Claire (and PledgeMe team)

Answered on 02-09-2020 by Medical Kiwi

Pledgers 9

John H
22/10/2020 at 12:44pm
Nikki Braniff-Jones
16/09/2020 at 7:25pm
Rodney Nelmes
14/09/2020 at 4:31pm
Satend Chand
11/09/2020 at 9:41am

"I have pledged earlier as well for $2,000. Please combine that with this pledge."

Chris Eggers
29/08/2020 at 3:59pm
Jackie
28/08/2020 at 12:35pm
Stephen Zanetti
27/08/2020 at 12:13pm
John Davies
26/08/2020 at 4:42pm
Camia
17/08/2020 at 11:18am

"Thanks for making it possible to join your company. One concern, I would invest more if there were greater diversity/women on your team."

Followers 1

Followers of Medical Kiwi for Wholesale Investors

Medical Kiwi for Wholesale Investors

21 January 2022

Dear shareholder

 

Re:  Enforceable Undertakings given to the FMA

On 22 December, Medical Kiwi advised all shareholders about Enforceable Undertakings which the company has given to the Financial Markets Authority (FMA). These Undertakings recognise misstatements made during our crowdfunding programme in August 2020.

The Board apologises to Medical Kiwi shareholders for the misstatements and for the need to give these Undertakings, long after the crowdfunding programme. Medical Kiwi is, of course, a substantially more developed Company in 2022 with its Christchurch cannabis cultivation plant now in operation, a new sales agreement in place, an enlarged and experienced Board, and a broad base of local and international investors.

We write to you now as the Board’s next step for immediate fulfilment of the Undertakings.  

At this point, the Board provides you with a “Corrections of Statements” immediately below this letter with the full Enforceable Undertakings document contained in this link

Should any shareholder who invested in Medical Kiwi through the crowdfunding programme now wish to exit that investment, they may do so by taking up a refund offer from the Company. Any eligible shareholder will be paid back the $1 per share purchase price at their request.

The offer will close at 5pm on Friday 11 February.  The offer may be taken up through completion of the Refund Application Form contained in this link and emailing this to [email protected].

The Board welcomes any questions or comments on the Undertakings and/or the share refund offer. The Board welcomes any questions or comments on the Undertakings and/or the refund offer.  Please email [email protected].

Looking ahead, we remain confident in the future growth and success of the Medical Kiwi business.  This outlook will be unaffected by the Undertakings and share refund process.

 

Sincerely

Aldo Miccio
Executive Chair, on behalf of the Medical Kiwi Board

 

APPENDIX — CORRECTIONS OF STATEMENTS

Medical Kiwi made certain statements at the time of its crowdfunding offer on the PledgeMe website (August/September 2020) that have been the subject of inquiries by the Financial Markets Authority (FMA). The outcome of those inquiries is that that Medical Kiwi has admitted those statements were incorrect or misleading and therefore breached Part 2 of the Financial Markets Conduct Act 2013. Medical Kiwi and the FMA have agreed that Medical Kiwi gives enforceable undertakings in order to address those breaches. The enforceable undertakings are attached in full.

As part of the enforceable undertakings, Medical Kiwi has agreed to issue a correction of the statements in question. The statements and corrections are set out below.

Representation as to licences

In its Information Memorandum (IM) issued as part of the crowdfunding offer, Medical Kiwi made various disclosures in relation to medicinal cannabis licences held, or applied for including:

  • “Medical Kiwi is in a unique position as one of a few licensed New Zealand companies…”
  • “Since 2018 we have… been granted a licence to cultivate from the Ministry of Health with further licenses pending”
  • “Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis
    and CBD products for both the local and international markets once the licenses are granted.”
  • “In August 2019, just eight months after being established, we became the first South Island based medicinal cannabis company to be granted a licence to cultivate for research. We’re an applicant for licenses to cover the full range of our activities and anticipate these being granted very soon, now that the Medicinal Cannabis Scheme is operational.”

Medical Kiwi should have but did not qualify the above by noting that the licence that it held at the time: (i) was due to expire on 22 August 2020; (ii) could not be renewed or extended; (iii) was specifically associated with Medical Kiwi’s Brightwater Facility in Nelson and did not apply to operations at its Christchurch Facility; and (iv) was never active as it was conditional on a site inspection which was never completed.

At the time of the IM, Medical Kiwi planned to let the Brightwater licence lapse as that site was no longer part of Medical Kiwi’s immediate plans. Medical Kiwi was in the process of obtaining a new licence in order to retrofit a Christchurch facility. Medical Kiwi’s application was being assessed by the Ministry of Health, and it did not anticipate any issues based on the exchanges with the Ministry to date. The Ministry of Health granted the licence for the Christchurch facility on 3 December 2020.

Medical Kiwi should have made it clear in the IM that its current licence was not yet active and was about to expire, and that its plans were based on the Ministry of Health granting a licence for the Christchurch facility (which had not yet happened). The statement at (a) to (d) above ought to have been amended accordingly:

  • Medical Kiwi is in a unique position as one of a few licensed New Zealand companies…
  • “Since 2018 2019, we have held an active been granted a licence to cultivate (including a research component) from the Ministry of Health, but we have a further application for a licence in place and are awaiting Ministry approval with further licenses pending”.
  • “Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis and CBD products for both the local and international markets once the licenses are granted pending confirmation of a licence to cultivate from the Ministry of Health.
  • “In July-August 2019, just eight months after being established, we became the first South Island based medicinal cannabis company to be granted a licence to cultivate for research. That licence (associated with our Nelson facility) has never been active and we are intending to let that lapse given our plans have shifted away from operating in Nelson.  Instead, we are focused on our facility in Christchurch and have applied for a licence from the Ministry of Health for that facility, which we are hopeful will be granted soon We’re an applicant for licenses to cover the full range of our activities and anticipate these being granted very soon, now that the Medicinal Cannabis Scheme is operational.”

Representations regarding contractual arrangements

Medical Kiwi made statements in its IM about its supply arrangements including that it had “signed partnership agreements… including pre-selling our entire first two years production worth $90 million to Hektares, a global player in the cannabis industry”. Medical Kiwi repeated the statement about having presold the first two years production throughout the IM.

The arrangement that Medical Kiwi had in place with Hektares was a letter of intention to supply. It was able to be terminated by Hektares. Although Medical Kiwi did not anticipate this at the time of the IM, the parties ended up mutually withdrawing from this arrangement. Medical Kiwi accepts that it ought to have made that risk clearer. For example, rather than stating it had pre-sold production to Hektares, stating that:

“We have strong interest from a global player in the cannabis industry, Hektares, to pre-purchase approximately $90 million worth of product.  Hektares has signed a letter of intention to purchase, although we note that arrangement is not binding and may be terminated by Hektares”.

 

Q&A on PledgeMe Campaign Page

On 2 August 2020, Medical Kiwi was asked a question on the PledgeMe Campaign Page:

“Is your purchase agreement binding? I ask this question due to the fact PURO NZ claimed they had purchase agreements and when they came to sell, their agreements were non binding”.

Medical Kiwi responded:

“There’s always a risk that a client will not be able to perform their contractual obligations whether it’s a binding or nonbinding MOU, contract or agreement of any nature. Our team is confident that Hektares have the ability and resources as well as intent to fulfill [sic] their contractual obligations. … More the issue is that Medical Kiwi may not be able to satisfy the demand from Hektares, as reflected in the risk section of our IM. Our IM financials reflect what we believe we can satisfy while also diversifying with other clients to try and mitigate any risk from a single client.”

Medical Kiwi accepts that it should have clearly conveyed that the agreement with Hektares was a letter of intention to supply and was able to be terminated. The answer should have said, for example:

“The purchase agreement is a letter of intention to supply and may be terminated by Hektares.  Although we are not aware of anything to suggest that Hektares will not proceed with this order, it is possible that it may decide not to do so.”

 

Conclusion

Medical Kiwi unreservedly apologises for the misstatements outlined above.

 

 

This campaign page is for wholesale investors (please find the definition below). If you're not a wholesale investor and arrived on this campaign page unintentionally please register your interest for future public equity crowdfunding rounds here

 

Definition of Wholesale Investor

A wholesale investor can be defined as people who meets any one of these 5 criterion:

  1.  are an investment business, in that their principal business involves investing in financial products, acting as an underwriter, providing financial advisory services, providing broking services or trading financial products;
  2. have, during the previous two year period, owned a portfolio of, or carried out transactions to acquire financial products of a value of at least $1 million;
  3. have, in the previous two years, materially participated in the investment decisions made by an investment business;
  4. have, or any entities controlled by them, have, as at the last day of the two most recently completed financial years, net assets or total consolidated turnover exceeding $5 million;
  5. are "eligible investors", and have certified that they have previous experience in acquiring or disposing of financial products that allows them to assess:
  • the merits of the transaction;
  • their own information needs in relation to the transaction;
  • the adequacy of the information provided, that they understand the consequences of so certifying, and the grounds for this certification; or
  • an authorised financial adviser, a chartered accountant, or a lawyer signs a written confirmation of the certification. 

 


We are focused on being part of the way the world delivers its healthcare by taking an innovative, science-based approach to developing and delivering cannabinoid products for those who need them the most.

 


From the Founder


More and more people are realising the benefits of plant-based remedies and alternative therapies. And their experiences are supported by a growing library of medical research which continues to identify the therapeutic benefits and pharmaceutical uses of medicinal cannabis and cannabidiol (CBD) for a range of ailments and conditions.

Like you, we’ve been watching with interest as countries around the world open up access to medicinal cannabis and CBD products. We’ve read the research, talked with start-up companies and listened to the amazing stories from those using these products about the positive impact it has had on their lives.

The potential of the medicinal cannabis and CBD wellness industry is shown in the rapid growth and scale achieved by businesses in countries to have already legalised the cultivation, production and use of these products. And as scientists learn more the demand is increasing. Globally, the medicinal cannabis industry is forecast to be worth USD $150 billion by 2025. (Grand View Research, 2018)

We believe that medicinal cannabis and CBD are part of a long-overdue health and wellbeing revolution that could replace so many other pharmaceuticals and benefit millions of people. We’re excited about the opportunity to bring these products to market in New Zealand.

Medical Kiwi is in a unique position as one of a few licenced New Zealand companies poised to create value and carve out a significant share of this emerging and exciting global industry.

We’re ready! Since 2018 we have:

• built a strong health-based, scientific and business savvy team

• developed a clear plan for product development, distribution, and research

• successfully raised our initial seed fund capital

• signed partnership agreements with global industry-leading companies, including pre-selling our entire first two years production worth $90 million to Hektares, a global player in the medicinal cannabis industry

• secured a greenfield site for our state-of-the-art facility in Nelson, and secured a 20-year lease for our initial factory in Christchurch

• been granted a licence to cultivate from the Ministry of Health with further licences pending

You’ll see throughout this document we talk a lot about providing certainty - certainty about our plans, about this investment opportunity and about the regulations that will govern the industry in New Zealand. We have chosen to take a conservative approach and wait until we have a complete picture of what New Zealand’s medicinal cannabis industry could look like before taking our investment opportunity to the market. We believe the timing is now right.

The future is exciting and you can be a part of it. We know that many Kiwis want to help Kiwis have greater access to safe, consistent, affordable, high-quality medicinal cannabis and CBD wellness products. The time to participate in the opportunity that Medical Kiwi represents is now.


Aldo Miccio

Co-Founder and Chairman

New Zealand is adding its name to the growing list of countries changing legislation to enable access to high-quality, affordable medicinal cannabis and CBD products and we think that’s exciting!

Until recently, cannabis has been a globally prohibited substance. Many people are unaware of the medicinal properties of cannabis and those who want to use it for medicinal purposes can face crippling costs and a severely restricted and unreliable supply. Scientists believe the bioactive constituents in cannabis can provide a range of physical and psychological health benefits. Medicinal cannabis products are in demand in countries that have already legalised the cultivation, production and use of full-spectrum medicinal cannabis products and CBD, and as scientists learn more about the therapeutic benefits and pharmaceutical uses, demand is increasing.

In December 2018 New Zealand’s Government passed legislation intended to improve access to medicinal cannabis and CBD products. The Medicinal Cannabis Scheme enables domestic cultivation and manufacture of medicinal cannabis products, and enables the setting of minimum quality standards for products and all stages of production. The regulations that govern the Scheme were announced by the Ministry of Health in December 2019. From 1 April 2020 New Zealand companies can now grow cannabis for the purposes of making medicine. They are also permitted to produce and distribute that medicine.

The products will still need to be prescribed by a doctor, and can only be bought directly from a medical practitioner or pharmacy. It’s encouraging that licences to cultivate, manufacture and supply medicinal cannabis products will be affordable which will help New Zealand businesses compete well with overseas providers.

Alongside the legislative change, New Zealand society’s attitudes towards medicinal cannabis are also evolving. A poll commissioned by the New Zealand Drug Foundation in 2018 found that 87% of New Zealanders support medicinal cannabis for the treatment of pain and 89% support the use of medicinal cannabis as terminal pain relief.

A major opportunity now exists for companies to leverage New Zealand’s provenance, reputation for innovation and areas of competitive advantage to cultivate, produce and sell medicinal cannabis and CBD products domestically and globally.

And Medical Kiwi is positioning itself to manufacture and supply high-quality medicinal cannabis and CBD products for both the local and international markets once the licenses are granted.

 


Size of the market

250,000 New Zealand  casual cannabis users, 25,000 New Zealand  pallative care users, Globally $150 billion  by 2025

The global industry is poised to grow by USD $22.33bn during 2020-2024 at a compound annual growth rate of over 24%. The New Zealand Ministry for Business Innovation and Employment (MBIE) forecasts the domestic medicinal cannabis market to reach $320-$500m within 10 years, and $250m worth of exports. The broader cannabis health product segment could represent a $1b market opportunity per annum in New Zealand.

The New Zealand Ministry of Health estimates that more than 250,000 casual cannabis users use it for medicinal purposes. There are also approximately 25,000 New Zealanders that need or could benefit from the introduction of medicinal cannabis products for palliative care each year (Business Wire, 2018).

The global cannabis market is estimated to be valued at USD $150 billion by 2025 (Grand View Research, April 2018).

 


Our innovative plans to cultivate change 

New Zealand’s Medicinal Cannabis Scheme has been operational since 1 April 2020 which allows for the local cultivation and manufacturing of medicinal cannabis products that will potentially help ease the pain of thousands of people.

This sentiment is at the heart of our innovative plans to cultivate change. We have a clear philosophy to realise the local and global opportunities for high-quality, safe and consistent medicinal cannabis and CBD products to bring about real change in people’s lives and health outcomes.

Learn more about our innovative plans to cultivate change in our Information Memorandum:

 


Advancing the industry through research 

We’re committed to an ongoing programme of advanced research and technology to support the development of our unique, safe, high-quality Medical Kiwi medicinal cannabis products. We plan to adopt relevant global technological advancements and work with industry leaders in research and development which will allow us to be agile in our response to market needs with the goal of setting an elevated benchmark as innovators and leaders in the industry.

Our research schedule consists of:

• International collaboration into the effects of the bioactive components contained in cannabis

• Research into the effects of growing conditions, especially light, on cannabinoid and other active ingredient outcomes, in a replicable way

• Develop, or contribute to, certification of standardisation of the beneficial bioactive properties of cannabis extracts

• Establishing protectable intellectual property

 

 


Cultivating consistency and certainty 

We have an uncompromising commitment to consistency and certainty. We aim to achieve this by breeding and growing cannabis strains of the highest quality in our state-of-the-art facility with indoor production processes, and partnering with global industry-leading companies that have the same commitment.

Our state-of-the-art indoor medicinal cannabis research, cultivation and processing facility will be based in Nelson. We have secured an eight-hectare greenfield site in Brightwater which is strategically located for operational logistics and product distribution. Plans for an 8,000-10,000 m2, two-story building have been developed. The facility will be built by a developer with Medical Kiwi leasing it at market rates. Due to Covid-19 delays, we now expect to start building this facility in the next 12-18 months.

Meanwhile, to become operational sooner, we have secured a lease on a building in Christchurch that is already fit for purpose and can comply with the strict New Zealand and international Medicinal Cannabis licensing conditions. We will operate solely from this facility until our Nelson site is ready.

Sustainability and environmental responsibilities were central to the development of our building plans which include extensive solar power, energy-efficient initiatives and sustainable considerations in all aspects of its ongoing operations, such as waste disposal. It is envisaged that early engineering will maximise energy efficiency so that the entire building and growing system’s electricity can be powered by a one-megawatt solar power energy system. The facility will also incorporate sophisticated security systems, world-class growing room-specific apparatus such as climate control, irrigation, lighting and extraction system.

When in full production, estimated to be early 2024, our Nelson facility is designed to produce 30,000 - 35,000 kg of dried product per annum, with a value today of $100 - $110 million. Our Christchurch facility will be equipped to produce 6,000 - 10,000 kg of dried product, valued today at $18 - $30 million per annum.

We believe our facilities and the products we create will have significant economic benefits for the Nelson Tasman and Christchurch regions, and for New Zealand, and we expect to employ 190 staff when in full production.

Learn more about our facilities in our Information Memorandum:

 


Manufacturing and distributing unique products 

With an emerging industry, it is important that advances are aligned with customer segments and demands. Our marketing insights will inform our cultivation, manufacturing and distribution decisions. We aim to create fit-for-purpose, verified and credible medicinal cannabis and wellbeing products utilising innovative science and technology. By partnering with Empirical Labs, a world leader in formulation and enhanced delivery methods, we believe we can get proven medicinal and wellness cannabis products to both the domestic and global market quicker.

Our exclusive distribution agreements with Vitality CBD and Liberty Herbal Technologies mean we’re well positioned to be one of the first to market with high-quality, innovative products. It also means we could establish distribution networks that we can use for our own unique Medical Kiwi produced products.

Learn more about our facilities in our Information Memorandum:

 


We’re a team committed to scientific, health-based success 

We have a strong health-based, scientific and business savvy team-leading Medical Kiwi’s exciting future. Our team of professionals in medicine, biochemistry, governance, investment and sales oversee Medical Kiwi’s operations.

We’re confident their specialist knowledge, skills and proven corporate governance put Medical Kiwi in a position to achieve our goals and begin generating revenue from early 2021.


Aldo Miccio
Director and Chairman

Aldo has had an extensive international career in senior management and governance as well being a past Mayor of Nelson. His broad experience, spanning 27 years, includes executive chairmanships and directorships in industries ranging from property, retail, agriculture and FMCG to public and state services. With an entrepreneurial spirit and strong commercial background, his expertise includes strategic planning, product management and design, and sales and marketing. The opportunity to enhance community wellbeing and enable changes in people’s lives and health outcomes was a key driver for him co-founding Medical Kiwi.


Peter Win
Director (Operations)

Peter has considerable breadth and depth of business experience, with a passion for pioneering new industries. He has worked in some of the most technically advanced industries, reaching senior levels of management in large-scale international energy projects and the marine engineering industry. Peter’s motivation for co-founding Medical Kiwi was a strong belief in the potential of medicinal cannabis to improve social wellbeing and provide health benefits for the wider community after experiencing how the industry had helped build better communities overseas.


Dr David Porter
MBChB, FRACP
Director (Medical)

David is a Consultant Rheumatologist with 27 years’ experience in the medical field. Porter Rheumatology, David’s practice in Nelson, provides specialist medical and nursing care to people with auto-immune and inflammatory disorders, as well as fibromyalgia patients. David is committed to finding more effective, accessible and affordable ways to manage his patients’ pain. David joined Medical Kiwi because he’s passionate about providing the highest quality medicinal cannabis products at the best possible price point.

“I’ve been prescribing CBD for my fibromyalgia patients since it became legal 2 years ago. Conventional pharmaceuticals tend to be ineffective at treating this condition and commonly cause debilitating side effects like drowsiness or mental fogginess. In stark contrast, CBD has proven to be head and shoulders above other treatments in terms of its lack of side effects, most importantly, but also the very considerable benefits to sleep, relaxation and pain relief. It is by far the most beneficial treatment I’ve used for these patients.”


Dr Michael Packer
PhD (Biochemistry, Cell Biology), MSc (Marine Science), BSc (Biochemistry)
Director (Science and Research)

Michael is a biochemist and natural products biotechnologist with a career spanning 28 years and an extensive track record of scientific research. Algae farming methods for carbon recycling/capture, biofuel production, bio-based materials and for healthy food ingredients, bioactives, nutraceuticals and cosmetic ingredients has formed the basis of his research and professional specialty. His work involves using custom-built bespoke photobioreactors which enable algal growth under controlled conditions. He is excited to bring his knowledge and expertise to Medical Kiwi to help guide rigorous evidence-based development of natural products to benefit human health.


Bruce Whall
CA, B.Comm (UNSW), FAICD
CFO

Bruce is an experienced senior finance and business executive with wide-ranging management experience and a clear understanding of the mechanics of business. With a career spanning 40 years, Bruce has extensive competency across strategic business planning, mergers and acquisitions, finance, accounting, taxation, working capital management, treasury and operations.


Nic Kidson
GM Sales & Marketing

Nic has a sales, marketing and business background that spans more than 20 years across a range of industries, including New Zealand’s niche seafood and wine industries. She brings a wealth of knowledge and diverse practical business application, as well as a passion for health, wellbeing and the environment. Nic is excited about what medical cannabis can do for people and wants to be a part of all the good that it can do for New Zealanders.


Learn more about our team and our partners in our Information Memorandum:

 


Share Offer 

Medical Kiwi is seeking to raise $3 million of investment capital in support of our business strategy.

Current shares on issue

In order to successfully market Medical Kiwi we have used an integrated channel network of trusted partners, including online platforms, private equity funding, and now crowdfunding specialists.

The company was formed with 30,000,000 shares. An additional 2,560,000 shares were issued in the seed funding round. There are now 3,000,000 shares on offer through our crowdfunding investor and wholesale investor raise which will bring the company to a total of 35,560,000 shares. Convertible notes have also been issued in receipt of loans, with the option of converting to shares within the next ten years. Should the option to convert be fully taken up, 3,257,700 shares would be issued.

There are two types of shares on offer: Class B Investor shares and Class A Ordinary shares (more detail below). Class A Ordinary shares shall have the same rights attaching to them as the existing shareholders in the company including the right to vote at shareholders meetings.

Class A Ordinary Shares shall have voting rights attaching to them enabling these shareholders to vote at shareholders meetings.

The minimum holding for Ordinary Shares has been set at 40,000 shares. Wholesale investors must submit a completed certificate confirming the applicant’s status as a wholesale investor as defined in clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013. A copy is available on request. Class A shares will be capped at no more than 50 shareholders.

Class B Investor Shares shall carry non-voting rights at a shareholders meeting. The maximum any one investor can invest via the crowdfunding campaign is $200,000.00 (equivalent to 10% of the maximum capital raising).

 


Financial projections

The financial projections for Medical Kiwi have been based on research from Canada, the United States and Australia while taking into account our local legislation and environment. Some of this information is a combination of data from companies that are currently producing medicinal cannabis products as well as anecdotal information.

Strong growth is expected as regulation takes hold, the industry becomes more established, new market segments emerge and facilities are expanded. Financials are based on a three-way cash- flow forecasting model, incorporating full profit and loss and balance sheet forecasts.

 

Read our financial assumptions and balance sheet in our Information Memorandum: 

 

 


Risks and Mitigation

A flooded market with increased competition
We believe our points of difference will set us apart from the competition. These include being one of the first companies to bring products to the market now that the Medicinal Cannabis Scheme is operational, and establish brand presence. Our operations will aim to cover the full process from cultivation to the production of rapidly evolving consumer products. We believe our seed-to-sale vertical integration approach will set us apart from other companies in New Zealand who might focus solely on cultivation or research.


Unforeseen circumstances delay the build of the facility, research and product development
We have consulted extensively with design experts in relation to the layout and design of our state-of-the-art facility. In the unlikely event of further delays, our planning ensures we can continue to operate out of our Christchurch factory while building work is being completed.


Our Christchurch factory is not ready on time
If the ontime completion of the Christchurch facility in October 2020 was delayed, it would affect the timing of the first cultivation cycle, and could affect sales revenue and license approval timing. Our team and processes will attempt to mitigate this risk.


Our Hektares deal falling through or not being delivered in full
We have spent significant time on this deal. We currently have an MOU and a supply agreement in place with Hektares, and once our facility is complete in Christchurch we will be formulating an order and delivery schedule from January onwards. As noted in the risk above, our timelines could be delayed. There is also a possibility that in Year 2 of our agreement we will not be able to fulfill the full order as noted in our financial assumptions, but we are evaluating different ways as our plans rollout of meeting their current demand (and that of other potential buyers).


Failure to raise capital
If we are unable to raise the minimum $500,000 sought, we will seek further funding from private investors.


Working Capital/Cashflow
Our financial forecasting shows that we have adequate working capital.


Market price of raw materials reduces
We will aim to produce value-adding high-grade medical cannabis products as a point of difference.


Failure of crops
Our crops will be grown indoors in a safe, controlled environment. We will rotate and segment our growing areas. Both of these approaches will minimise the risk of damage to crops.


Challenges with distribution of imported and our own products
We have successfully established distribution and uptake agreements with international companies with Memorandum of Understandings in place and additional agreements currently under discussion. Our strategy to import and distribute our partners’ products is designed to have a two-fold advantage: 1. It would create short-term and ongoing cash flow for the business. 2. It would establish distribution networks that could be utilised once Medical Kiwi production is established.

 

 

 


A Note from PledgeMe

We have completed a Veda check on the company and its Directors, as well as Google checks. One Director, Peter Win, had two bank defaults on his credit report from a previous relationship that he is disputing. There were no other adverse findings. The Directors have also all passed police vetting and responsible person's tests as part of the cannabis research license approval.

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Offer Details

Current Valuation 32,560,000
Raise Minimum 5,000
Raise Maximum 1,000,000
Share Price 1.00
Minimum Pledge 500.00
Maximum Shares Offered 1,000,000
Explanation of valuation:

Our offer reflects a valuation undertaken by financial advisors and has been based on international market research from Canada, Australia and the United States of America.

This includes anecdotal information as well as data from companies currently producing medicinal cannabis products. It is important to acknowledge that, as this is a new and emerging industry both globally and in New Zealand, it is difficult to perform a comparative analysis.

We have valued Medical Kiwi and the company shares at a pre-raise valuation of $32,560,000.

The valuation we believe is conservative, with Medical Kiwi adopting lower profitability and revenue formulas than what is generally accepted in the industry. We have discounted valuation multipliers of net profit after tax to a factor of approximately 2.75 based on NPAT of $11,880,022 by the end of 2021, to give us our valuation of $32,560,000. This is of course backed against sales agreements in place and assumptions as outlined in earlier sections.

The valuation we have undertaken can be compared to other similar companies in the industry. The table in our Information Memorandum reflects three cannabis companies with a presence in New Zealand and Australia, and how their respective actual retained earnings (losses) compare with market capitalisation on their respective stock exchanges.

Financial Summary

Prev Year Current Year Est. FY 2025 Est. FY 2026
Revenue NZ $0 NZ $0 NZ $23,582,667 NZ $36,486,833
Operating Expenses NZ $575,247 NZ $484,573 NZ $4,710,601 NZ $6,774,931
EBITDA -NZ $575,247 -NZ $484,573 NZ $16,338,816 NZ $24,631,502
Net Profit -NZ $575,774 -NZ $584,922 NZ $11,880,022 NZ $17,537,783

Company Details

Company Name: Medical Kiwi Limited

Company Number: 7135337

Company Documents

Documents no longer available to download, as this campaign has closed

Director Details

Name Role Profile URL Invested?
Aldo Miccio Director and Chairman https://au.linkedin.com/in/aldomiccio
Peter Win Director (Operations) https://nz.linkedin.com/in/peter-win
Dr. David Porter Director (Medical) https://nz.linkedin.com/in/david-porter-nz
Dr. Michael Packer Director (Science and Research) https://nz.linkedin.com/in/mike-packer

What are the sales channels for the Hektares? they seem to be light on substance, and only seem to have a not very special deal with CDA clinics in Australia.

Posted on 04-09-2020 by Shane Le Brun

Hi Shane
Hektares sales channels are through medicinal cannabis manufacturers and wholesalers as well as some prescription clinics. These clients are a combination of entities that they have existing strategic relationships with, as well as clients of entities that they have the strategic relationships with, across North America, Europe and Asia. Aldo is arranging calls with potential wholesale investors, so would be happy to call you too? Please feel free to email me directly: [email protected]. Regards Nic

Answered on 07-09-2020 by Medical Kiwi


Hi, so I was told my address couldn't be verified so emailed 2 types of proof of address that was 2 days ago and I havent heard back. Can someone please tell me why.
Thanks Rachelle

Posted on 02-09-2020 by Rachelle&Chris Deeprose

Hi Rachelle, thanks for your question. We have had a lot of responses and we are working our way through the AML processing to verify investors. You should hear from the team within the next few days.
Much appreciated,
Claire (and PledgeMe team)

Answered on 02-09-2020 by Medical Kiwi

Followers of Medical Kiwi for Wholesale Investors

John H
22/10/2020 at 12:44pm
Nikki Braniff-Jones
16/09/2020 at 7:25pm
Rodney Nelmes
14/09/2020 at 4:31pm
Satend Chand
11/09/2020 at 9:41am

"I have pledged earlier as well for $2,000. Please combine that with this pledge."

Chris Eggers
29/08/2020 at 3:59pm
Jackie
28/08/2020 at 12:35pm
Stephen Zanetti
27/08/2020 at 12:13pm
John Davies
26/08/2020 at 4:42pm
Camia
17/08/2020 at 11:18am

"Thanks for making it possible to join your company. One concern, I would invest more if there were greater diversity/women on your team."

This campaign was successful and got its funding on 17/09/2020 at 8:00 PM.

This campaign has closed, but this company may choose to do more equity raises on PledgeMe in the future. If you're interested in investing in Medical Kiwi for Wholesale Investors, you can sign up to be notified when a new equity campaign from this company is published.

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Investor Perks

BUDDING INVESTOR

NZ $5,000.00+

B Class Investor Shares. Invite to our Annual General Meeting, hosted by our Directors and wider team, with refreshments provided. Option to have your name displayed at our facility. A private tour of our facility.

FLOWERING INVESTOR

NZ $40,000.00+

A Class Ordinary Shares. Invite to our Annual General Meeting, hosted by our Directors and wider team, with refreshments provided. Option to have your name displayed at our facility. A private tour of our facility. Voting rights.

Warning statement about equity crowdfunding

Equity crowdfunding is risky.

Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.