The past months have been an exciting journey, where we managed to meet the majority of the remaining strategic objectives for 2021/2022[1]. In addition, we have advanced our strategic objective within our CANNASEN® Animal treatment line[2].

Despite a depressed stock market, we succeeded in obtaining our TO1 and TO2 Funding in August and September. Our T02 funding series was realized with a strike price of DKK 10.3, with a funding of DKK 2.6 million and TO1 with an exercise rate of 92% and a total funding of 9.9 million. With this funding, we have now paid off our previously obtained bridge loan of approximately DKK 6 million.

Reflections on 2021/2022 & Future considerations
During our first year as a listed company, we managed to consolidate and optimize CS MEDICA, and are now better equipped to handle the growth journey ahead of us. As a result, we have almost halved our burn rate and expect to be cash positive at the start of 2024.

We are first mover in a CBD market with annual sales of $1.9 billion[4] and an estimated CAGR[[[3]]] of 49 % until 2024[[[4]]]. Cannabis is claimed to have a market disrupting potential, which together with a large unmet market, across all treatment areas of CS MEDICA cannot be overlooked [[[5]]][.+[6]]. We intend to capitalize on our position as first mover in this market through a rapid global rollout.

Despite the already achieved gains in terms of burn rate and business optimizations, we must continue to raise new capital to ensure a rapid penetration in new continents and product categories. Our goal is to partially secure this capital through funding from new continental distributors. Besides the ensured capital, this strategy further assures that continental distributors having an increased interest in achieving success in their own market penetration as well as in the future operation of CS MEDICA.

We are engaged in dialogue and/or due diligence with several potential Chinese investors, as China and the rest of Asia are important markets for CS MEDICA. During our due diligence we will evaluate each partner, to secure the best possible investment match. 

From a long-term perspective, our board of directors approved on the 31st of August 2022 our plan to move CS MEDICA's share listing from the Spotlight Denmark Market to the Nasdaq Main Market. CS MEDICA's admission to trading on the Main Market is subject to an extensive application process, and the company must meet several objectives before the listing. In this process it is crucial for us that we have the funding secured before the market lift as well as we need the market cap to meet our long-term goal according to our funding strategies. Hence, we have started identifying and evaluating the right financial advisor to assist the company with the market lift and long-term plan.

Throughout this financial year, we have been challenged on several levels. COVID-19 and the war in Ukraine have delayed our clinical studies and thus several of our distribution agreement negotiations have become disproportionately long. In the last few months and the upcoming period, we will finally be able to see the result of our all-encompassing work.  We still expect to be able to close the current financial year within our revenue goal of around DKK 12 million (+277% vs. LY).  Looking forward, we have an all-encompassing focus on our potential distribution sales pipeline, currently amounting to DKK 638 million.

Our long-awaited breakthrough in the Danish pharmacy world supports revenue performance with the closure of agreements with two of Denmark's three leading pharmacy chains. With these agreements, we get access to 275 pharmacies in Denmark, with shelf space (voluntary assortment) and online availability for the full CANNASEN® CBD product line. In Sweden, we are listed in one of the big 5 pharmacy chains, covering 326 pharmacies. Equivalent to Denmark, we focus on closing listings at the rest of the pharmacy chains, resulting in full market access - totally 2.006 pharmacies[7]. This also creates an excellent case for launching into other countries' pharmacy channels.

Simultaneously, we continue to expand the availability of the CANNASEN® CBD product line through Amazon. The products are currently on Amazon in Sweden and Germany. Unfortunately, the performance has not had the uplift as expected. Hence, the roll-out to France and Italy has been on hold. Therefore, we are restructuring the set-up with Amazon. Our original Amazon strategy is reframed, and we have chosen a new Amazon service provider with knowledge of CBD products on Amazon.

I hope you enjoyed our CEO letter. We look forward to keeping you updated with our Company's industry and field of business in future CEO letters.  

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[1] We only have one strategic objective, which relates to Clinical trials - Psoriasis + supplements - versus placebo supplements.

[2] Previously, this strategic objective was set for H2 2022/2023.

[3] compound annual growth rate

[4] Globally sales during 2018 - BDSA (2021) BDS Analytics: The Global Cannabinoids Market, Will CBD Overtake THC.

[5] Cannabis market disruptor I" (2019) Cannabis Market Disruptor Handbook part I: An Introduction. Euromonitor International

[6] See notes for figure below the figure.

[7] Denmark 573 & Sweden 1.433 Pharmacies.