Company Overview - Akanda Corp. is an international medical cannabis company focused on improving access to high-quality and affordable products [6] - The company's portfolio includes CanMart, a UK-based licensed pharmaceutical importer and distributor, and partnerships with Cellen Life Sciences' Leva Clinic, a digital pain clinic in the UK [6] Offering Details - Akanda has closed its second registered direct offering, selling 2,491,381 common shares at a price of $0.1031 and 12,057,600 pre-funded warrants at $0.103 per share [2] - The gross proceeds from this offering were approximately $1,500,000, which will be used for capital expenditures, operating capacity, working capital, general corporate purposes, and refinancing existing debt [3] Regulatory Compliance - The securities were offered under an effective shelf registration statement on Form F-3, which was declared effective on January 29, 2024 [4] - The final prospectus supplement related to the offering was filed with the SEC on May 20, 2024, and is available on the SEC's website [4]

Core Points - Akanda Corp has successfully closed a registered direct offering, selling 2,491,381 common shares at $0.1031 each and 21,756,922 pre-funded warrants at $0.103 each, generating gross proceeds of approximately $2,500,000 [2][3]. Group 1: Offering Details - The offering included 2,491,381 common shares and 21,756,922 pre-funded warrants, with the warrants being immediately exercisable at $0.0001 per share [2][3]. - The offering was conducted under an effective shelf registration statement filed with the SEC, which was declared effective on January 29, 2024 [4]. Group 2: Use of Proceeds - Akanda intends to utilize the net proceeds for capital expenditures, enhancing operating capacity, working capital, general corporate purposes, and refinancing or repaying existing debt [3]. Group 3: Company Overview - Akanda is an international medical cannabis company focused on improving access to high-quality and affordable products, with a portfolio that includes CanMart, a licensed pharmaceutical importer and distributor in the UK [6]. - The company is also developing a Canadian farming property in British Columbia for THC and cannabinoid (CBD) production [6].

Core Viewpoint - Akanda Corp. has announced a registered direct offering to raise approximately $2.5 million through the sale of common shares and pre-funded warrants, aimed at general working capital and corporate expenses [2][3]. Group 1: Offering Details - The offering includes 2,491,381 common shares priced at $0.1031 each and 21,756,922 pre-funded warrants at $0.103 per share, with the warrants being immediately exercisable at $0.0001 [2]. - The gross proceeds from the offering are estimated to be around $2,500,000 before deducting fees and expenses [3]. - The offering is expected to close on or about May 17, 2024, pending customary closing conditions [3]. Group 2: Regulatory Information - The offering is conducted under an effective shelf registration statement on Form F-3, previously filed with the SEC and effective since January 29, 2024 [4]. - A final prospectus related to the offering will be filed with the SEC and will be available for free on the SEC's website [4]. Group 3: Company Overview - Akanda Corp. is an international medical cannabis company focused on improving access to high-quality and affordable products [6]. - The company's portfolio includes CanMart, a licensed pharmaceutical importer and distributor in the UK, and partnerships with Cellen Life Sciences' Leva Clinic [6]. - Akanda is also developing a Canadian farming property in British Columbia for THC and CBD facilities [6].

Akanda Corp (NASDAQ: AKAN) is in focus this morning after receiving a notice of non-compliance from Nasdaq. Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.Akanda fails to satisfy the Nasdaq listing requirementsCopy link to sectionThe deficiency notification was issued to the international medical cannabis company because it failed to meet the “minimum stockholders’ equity requirement as set forth in Nasdaq Listing Rule 5550(b)(1).  $AKAN failed to sa ...

Core Points - Akanda Corp. has received a deficiency notification from Nasdaq for non-compliance with the minimum stockholders' equity requirement of $2,500,000, as its reported stockholders' equity was ($3,828,892) for the fiscal year ended December 31, 2023 [2][3] - The company has 45 calendar days, until June 28, 2024, to submit a plan to regain compliance, with the possibility of an extension of up to 180 days if the plan is accepted [3] - Akanda is currently evaluating options to resolve the deficiency and intends to submit a comprehensive plan within the stipulated timeframe [3] - The company's common shares will continue to trade on the Nasdaq Capital Market under the symbol "AKAN" despite the notification [3] - Interim CEO Katie Field emphasized the company's commitment to addressing the compliance issue and appreciated investor support during this period [3] Company Overview - Akanda Corp. is an international medical cannabis and wellness platform company focused on improving access to high-quality and affordable products [4] - The company's portfolio includes CanMart, a UK-based licensed pharmaceutical importer and distributor, and partnerships with Cellen Life Sciences' Leva Clinic, a digital pain clinic in the UK [4] - Akanda has acquired rights to develop a Canadian farming property in British Columbia for THC and cannabinoid (CBD) facilities [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Shares AKAN The Nasdaq Capital Market FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE S ...

Unaudited Condensed Interim Consolidated Statements of Financial Position The company's financial position shows a decrease in total assets and shareholders' equity, alongside an increase in total liabilities, reflecting changes in current and non-current components [Assets](index=1&type=section&id=Assets) Total assets declined to $36,507,556 by June 30, 2023, from $38,996,777, primarily due to reductions in non-current assets and specific current asset categories Total Assets Overview | Category | June 30, 2023 ($) | December 31, 2022 ($) | | :----------------------- | :------------ | :------------------ | | **Total Current Assets** | $3,245,108 | $3,821,021 | | **Total Non-Current Assets** | $33,262,448 | $35,175,756 | | **Total Assets** | $36,507,556 | $38,996,777 | - Cash increased from **$228,794** to **$443,338**, while cash held in trust decreased from **$27,009** to **$0**[2](index=2&type=chunk) - Trade and other receivables decreased significantly from **$1,235,619** to **$657,568**[2](index=2&type=chunk) - Biological assets decreased from **$809,180** to **$257,144**, and inventory increased from **$1,057,240** to **$1,280,073**[2](index=2&type=chunk) [Liabilities and Shareholders' Equity](index=1&type=section&id=Liabilities_and_Shareholders_Equity) Total liabilities increased to $14,858,513, while total shareholders' equity decreased to $21,649,043, driven by rising current liabilities and an accumulated deficit Total Liabilities and Shareholders' Equity Overview | Category | June 30, 2023 ($) | December 31, 2022 ($) | | :--------------------------- | :------------ | :------------------ | | **Total Current Liabilities** | $12,375,919 | $9,347,750 | | **Total Non-Current Liabilities** | $2,482,594 | $2,748,866 | | **Total Liabilities** | $14,858,513 | $12,096,616 | | **Total Shareholders' Equity** | $21,649,043 | $26,900,161 | - Trade and other payables increased from **$7,139,817** to **$8,460,194**[2](index=2&type=chunk) - Loans and borrowings significantly increased from **$936,793** to **$2,478,555** in current liabilities[2](index=2&type=chunk) - Accumulated deficit worsened from **$(21,087,962)** to **$(26,965,844)**[2](index=2&type=chunk) Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss Despite increased sales and gross profit, the company reported a widened net loss for H1 2023, primarily due to the absence of a significant gain recorded in the prior year [Financial Performance](index=2&type=section&id=Financial_Performance) For H1 2023, sales and gross profit increased, but a widened net loss of $(5,877,882) resulted from the absence of a prior year's bargain purchase gain Financial Performance Summary | Metric | Six months ended June 30, 2023 ($) | Six months ended June 30, 2022 ($) | | :------------------------------------------------- | :----------------------------- | :----------------------------- | | **Sales** | $1,397,443 | $73,096 | | **Gross Profit** | $935,407 | $93,304 | | **Operating loss** | $(5,821,187) | $(10,918,113) | | **Net loss** | $(5,877,882) | $(2,593,744) | | **Comprehensive loss** | $(6,004,877) | $(3,613,242) | | **Loss per share – basic and diluted** | $(1.46) | $(0.97) | - Sales increased significantly from **$73,096** in H1 2022 to **$1,397,443** in H1 2023[3](index=3&type=chunk) - Gross Profit increased from **$93,304** in H1 2022 to **$935,407** in H1 2023[3](index=3&type=chunk) - Operating loss improved from **$(10,918,113)** in H1 2022 to **$(5,821,187)** in H1 2023, but net loss worsened due to the absence of a **$12,760,356** 'Gain on bargain purchase' recorded in H1 2022[3](index=3&type=chunk) Unaudited Condensed Interim Consolidated Statements of Shareholders' Equity Total shareholders' equity decreased significantly, driven by a net loss and translation adjustments, partially mitigated by RSU issuances [Equity Changes](index=3&type=section&id=Equity_Changes) Total shareholders' equity decreased to $21,649,043 by June 30, 2023, primarily due to a net loss and translation adjustments, partially offset by RSU issuances Shareholders' Equity Summary | Metric | June 30, 2023 ($) | December 31, 2022 ($) | | :------------------------------------ | :------------ | :------------------ | | **Share capital** | $50,188,451 | $49,434,692 | | **Accumulated deficit** | $(26,965,844) | $(21,087,962) | | **Accumulated other comprehensive loss** | $(1,594,617) | $(1,467,622) | | **Total Shareholders' Equity** | $21,649,043 | $26,900,161 | - Net loss for the six months ended June 30, 2023, was **$(5,877,882)**, contributing to the accumulated deficit[4](index=4&type=chunk) - Fair value of RSUs issued at **$1.84** per share and **$1.11** per share contributed **$774,736** and **$179,037** to share capital, respectively[4](index=4&type=chunk) Unaudited Condensed Interim Consolidated Statements of Cash Flows Operating cash outflow significantly improved, while financing inflows decreased, resulting in a net increase in cash for the period [Cash Flow Activities](index=4&type=section&id=Cash_Flow_Activities) Operating cash outflow significantly improved to $(911,484), while financing inflows decreased, leading to a net increase in cash of $301,115 for the period Cash Flow Summary | Cash Flow Category | Six months ended June 30, 2023 ($) | Six months ended June 30, 2022 ($) | | :------------------------------------ | :----------------------------- | :----------------------------- | | **Cash flows used in operating activities** | $(911,484) | $(8,353,721) | | **Cash flows used in investing activities** | $(1,935) | $(4,231,938) | | **Cash flows provided by financing activities** | $1,214,534 | $14,642,326 | | **Net increase in cash and cash equivalents** | $301,115 | $2,056,667 | | **Cash and cash equivalents at the end of the period** | $443,338 | $4,403,214 | - Operating cash outflow improved significantly from **$(8,353,721)** in H1 2022 to **$(911,484)** in H1 2023, despite a higher net loss, due to adjustments for non-cash items and working capital changes[6](index=6&type=chunk) - Financing cash inflows decreased substantially from **$14,642,326** in H1 2022 (driven by IPO proceeds) to **$1,214,534** in H1 2023 (primarily from new loans received)[6](index=6&type=chunk) Notes to the Unaudited Condensed Interim Consolidated Financial Statements These notes provide detailed explanations of the company's accounting policies, financial instrument risks, and significant events affecting its interim financial statements [1. Nature of Operations and Going Concern](index=5&type=section&id=1._Nature_of_Operations_and_Going_Concern) Akanda Corp. operates in UK cannabis distribution and Portuguese cultivation, facing significant going concern uncertainties due to cash outflows and a working capital deficit - The Company's primary business activities include sales and distribution of cannabis-based products through Canmart Ltd. in the UK and production of EU GMP grade cannabis flower through Holigen Limited in Portugal[8](index=8&type=chunk)[10](index=10&type=chunk) - Bophelo Bio Science and Wellness (Pty) Ltd., a former subsidiary in Lesotho, was placed into insolvent liquidation on July 15, 2022, leading to the derecognition of its assets and liabilities and reclassification of its operating results as a discontinued operation[8](index=8&type=chunk) Going Concern Metrics | Metric | Value (as of June 30, 2023) ($) | | :-------------------------- | :-------------------------- | | **Net cash outflow from operating activities (six months)** | $(911,484) | | **Working capital deficit** | $(9,130,811) | | **Accumulated

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to OR ☐ SHELL COMPANY REPORT PURSUANT TO SECT ...

Unaudited Condensed Consolidated Statements of Financial Position Total assets significantly increased to $43.48 million, with shareholders' equity turning positive to $34.64 million ASSETS | ASSETS | June 30, 2022 | December 31, 2021 | |:-----------------------------------------------|:--------------|:------------------| | **Current Assets** | | | | Cash | $ 3,930,702 | $ 3,495,390 | | Cash held in trust | 472,512 | — | | Trade and other receivables | 726,865 | 242,357 | | Prepayments | 380,837 | 107,759 | | Biological assets | 198,631 | — | | Inventory | 895,774 | — | | Financial asset measured at FVTPL | 337,145 | — | | **Total Current Assets** | **6,942,466** | **3,845,506** | | **Non-Current Assets** | | | | Property, plant and equipment | 12,608,287 | 1,897,748 | | Intangible assets | 23,446,256 | 259,102 | | Loan Receivable | 485,272 | 134,770 | | Right-of-use assets | — | 1,908,877 | | **Total Non-Current assets** | **36,539,815**| **4,200,497** | | **Total Assets** | **$ 43,482,281**| **$ 8,046,003** | | **LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)**| | | | **Current Liabilities** | | | | Trade and other payables | $ 4,491,284 | $ 680,328 | | Lease liability | — | 439,709 | | Loans and borrowings | 1,262,785 | 432,201 | | Secured convertible debenture | — | 6,716,190 | | Holdback payable | 400,000 | — | | Due to related party | 117,625 | — | | **Total Current Liabilities** | **6,271,694** | **8,268,428** | | **Non-Current Liabilities** | | | | Lease liability | — | 1,978,997 | | Loans and borrowings | 2,570,127 | — | | **Total Non-Current Liabilities** | **2,570,127** | **1,978,997** | | **Total liabilities** | **8,841,821** | **10,247,425** | | **Shareholders' Equity (Deficit)** | | | | Share capital | 47,101,209 | 7,255,695 | | Contributed surplus | 576,340 | — | | Other reserves | 21,051 | 3,618,670 | | Accumulated deficit | (12,024,032) | (13,293,889) | | Accumulated other comprehensive income | (1,034,108) | 218,102 | | **Total Shareholders' Equity (Deficit)** | **34,640,460**| **(2,201,422)** | | **Total Liabilities and Shareholders' Deficit**| **$ 43,482,281**| **$ 8,046,003** | - Total Assets increased significantly from **$8.05 million** at December 31, 2021, to **$43.48 million** at June 30, 2022, primarily driven by increases in property, plant and equipment and intangible assets[3](index=3&type=chunk) - Shareholders' Equity (Deficit) improved substantially from a deficit of **$2.20 million** at December 31, 2021, to a positive equity of **$34.64 million** at June 30, 2022, mainly due to a large increase in share capital[3](index=3&type=chunk) [Unaudited Condensed Consolidated Statements of Loss and Comprehensive Loss](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) Net income from continuing operations was $1.15 million, but a $2.59 million net loss resulted from discontinued operations Item | Item | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:------------------------------------------------------------------|:-------------------------------|:-------------------------------| | Sales | $ 73,096 | $ 3,935 | | Cost of sales | 12,870 | 5,849 | | Gross Profit (Loss) | 93,304 | (1,914) | | Operating expenses | 11,011,417 | 143,589 | | Operating loss | (10,918,113) | (145,503) | | Other (expense) income: | | | | Gain on bargain purchase | 12,760,356 | — | | Net income (loss) from continuing operations | 1,153,290 | (146,417) | | Loss from discontinued operations | (3,747,034) | (1,525,935) | | Net loss | $ (2,593,744) | $ (1,672,352) | | Comprehensive loss | $ (3,613,242) | $ (1,856,844) | | Earnings (loss) per share from continuing operations – basic and diluted | $ 0.04 | $ (0.01) | | Loss per share - basic and diluted | $ (0.10) | $ (0.13) | | Weighted average common shares outstanding | 26,835,444 | 13,129,212 | - The company reported a net income from continuing operations of **$1.15 million** for the six months ended June 30, 2022, a significant improvement from a loss of **$146.42 thousand** in the prior year, largely due to a **$12.76 million** gain on bargain purchase[5](index=5&type=chunk) - Despite the gain from continuing operations, the company recorded a net loss of **$2.59 million** for the six months ended June 30, 2022, primarily due to a substantial loss of **$3.75 million** from discontinued operations[5](index=5&type=chunk) [Unaudited Condensed Consolidated Statements of Shareholders' Equity (Deficit)](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Deficit%29) Shareholders' equity transitioned from a deficit to a positive $34.64 million, driven by significant share issuances Item | Item | Balance, December 31, 2020 | Balance, June 30, 2021 | Issuance of shares for Holigen Acquisition | Issuance of shares to ASDT | Issuance of shares from private placement | Issuance of shares from IPO | Issuance of shares upon conversion of note | Loss of control of Bophelo Bio | Stock-based compensation | Net loss | Translation adjustment | Balance, June 30, 2022 | |:---------------------------------------|:---------------------------|:-----------------------|:-------------------------------------------|:---------------------------|:------------------------------------------|:----------------------------|:-------------------------------------------|:-------------------------------|:-------------------------|:---------|:-----------------------|:-----------------------| | Share capital | $ 159 | $ 159 | 16,131,000 | 2,174,908 | 298,684 | 14,682,078 | 6,559,000 | (156) | — | — | — | $ 47,101,209 | | Contributed surplus | — | — | — | — | — | — | — | — | 576,340 | — | — | $ 576,340 | | Other reserves | 21,053 | 21,053 | — | — | — | — | — | (3,597,619) | — | — | — | $ 21,051 | | Accumulated deficit | (5,162,692) | (6,835,044) | — | — | — | — | — | 3,863,601 | — | (2,593,744)| — | $ (12,024,032) | | Accumulated Other comprehensive loss | 108,060 | (76,432) | — | — | — | — | — | (232,712) | — | — | (1,019,498) | $ (1034,108) | | **Total** | **$ (5,033,420)** | **$ (6,890,264)** | **16,131,000** | **2,174,908** | **298,684** | **14,682,078** | **6,559,000** | **33,114** | **576,340** | **(2,593,744)**| **(1,019,498)** | **$ 34,640,460** | - Share capital significantly increased from **$159** at December 31, 2020, to **$47.10 million** at June 30, 2022, primarily due to share issuances for the Holigen acquisition (**$16.13 million**), IPO (**$14.68 million**), and conversion of a note (**$6.56 million**)[10](index=10&type=chunk) - The company's total shareholders' equity transitioned from a deficit of **$6.89 million** at June 30, 2021, to a positive equity of **$34.64 million** at June 30, 2022, reflecting substantial capital raises and acquisitions, despite a net loss[9](index=9&type=chunk)[10](index=10&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities had an $8.35 million cash outflow, largely offset by $14.64 million from financing activities Cash Flow Activity | Cash Flow Activity | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:------------------------------------------------------------------|:-------------------------------|:-------------------------------| | Net income (loss) | $ (2,593,744) | $ (1,672,352) | | Cash flows used in operating activities | (8,353,721) | (1,021,118) | | Cash flows used in investing activities | (4,231,938) | (545,870) | | Cash flows provided by financing activities | 14,642,326 | 3,495,899 | | Net increase in cash and cash equivalents | 2,056,667 | 1,928,909 | | Cash and cash equivalents at the beginning of the period | 3,495,460 | 13,504 | | Cash and cash equivalents at the end of the period | $ 4,403,214 | $ 1,967,335 | - The company experienced a significant net cash outflow from operating activities of **$8.35 million** for the six months ended June 30, 2022, an increase from **$1.02 million** in the prior year[13](index=13&type=chunk) - Cash flows from financing activities provided **$14.64 million** in the first half of 2022, primarily from IPO proceeds (**$14.65 million**) and private placement (**$0.28 million**), which offset the cash used in operating and investing activities[13](index=13&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Nature of Operations and Going Concern](index=5&type=section&id=1.%20Nature%20of%20Operations%20and%20Going%20Concern) Akanda Corp. was incorporated on July 16, 2021, and is involved in cultivating and manufacturing cannabis biomass and medical cannabis products, primarily through its UK subsidiary Canmart Ltd. The company lost control of its Lesotho-based subsidiary, Bophelo Bio Science and Wellness (Pty) Ltd., due to an insolvent liquidation order on July 15, 2022, leading to its derecognition as a discontinued operation. The company's ability to continue as a going concern is dependent on raising further funding and generating cash profits from its investments, as it incurred a significant net cash outflow from operating activities - Akanda Corp. was incorporated on July 16, 2021, and operates in the cultivation, manufacturing, sales, and distribution of cannabis-based products for medical use, primarily through its UK subsidiary Canmart Ltd[16](index=16&type=chunk)[17](index=17&type=chunk) - The company lost control of its indirectly held subsidiary, Bophelo Bio Science and Wellness (Pty) Ltd., on June 30, 2022, due to an insolvent liquidation order, resulting in the derecognition of its assets and liabilities and a recorded loss of **$2.34 million**[17](index=17&type=chunk) - The company's going concern is dependent on its ability to raise further cash funding and generate cash profits, as it incurred a net cash outflow of **$8.35 million** from operating activities for the six months ended June 30, 2022[19](index=19&type=chunk)[20](index=20&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) These condensed consolidated financial statements are prepared in accordance with IFRS and IAS 34, using the accrual basis and historical cost, with certain financial assets and liabilities valued at fair value. The acquisition of Cannahealth and its subsidiaries was accounted for as a common control transaction using the 'pooling of interests method,' with retrospective adjustments to share and per share information. The reporting currency is United States Dollars, and management makes estimates and judgments, particularly regarding functional currencies [2.a Statement of compliance](index=6&type=section&id=2.a%20Statement%20of%20compliance) The condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB and interpretations by IFRIC, specifically IAS 34 Interim Financial Reporting - The financial statements comply with IFRS as issued by the IASB and IAS 34 Interim Financial Reporting[22](index=22&type=chunk)[23](index=23&type=chunk) [2.b Basis of preparation](index=6&type=section&id=2.b%20Basis%20of%20preparation) The statements are prepared on an accrual basis, using historical cost, with certain financial assets and liabilities measured at fair value. The acquisition of Cannahealth and its subsidiaries was treated as a common control transaction using the 'pooling of interests method,' with retrospective adjustments to share and per share information - Financial statements are prepared on an accrual basis, using historical cost, with fair value adjustments for certain financial assets and liabilities[24](index=24&type=chunk) - The acquisition of Cannahealth and its subsidiaries was accounted for as a common control transaction using the 'pooling of interests method,' combining entities at book value from the earliest reporting date[25](index=25&type=chunk)[26](index=26&type=chunk) - All share and per share information has been retrospectively adjusted to reflect the reorganization and share issuance as if it occurred on January 1, 2019[27](index=27&type=chunk) [2.c Functional and presentation currency](index=6&type=section&id=2.c%20Functional%20and%20presentation%20currency) The condensed consolidated financial statements are prepared and presented in United States Dollars (USD), which is the Company's reporting currency - The financial statements are presented in United States Dollars (USD), the Company's reporting currency[28](index=28&type=chunk) [2.d Use of estimates and judgments](index=6&type=section&id=2.d%20Use%20of%20estimates%20and%20judgments) The preparation of financial statements requires management to make estimates, judgments, and assumptions that impact reported amounts, with critical judgments including the determination of functional currencies - Management makes estimates, judgments, and assumptions in preparing financial statements, with critical judgments including the determination of functional currencies[29](index=29&type=chunk)[30](index=30&type=chunk) [3. New standards issued, not yet adopted](index=8&type=section&id=3.%20New%20standards%20issued%2C%20not%20yet%20adopted) An amendment to IAS 1, effective January 1, 2023, clarifies the classification of liabilities as non-current based on the substantive right to defer settlement for at least 12 months. The Company does not anticipate a significant impact on its financial statements upon adoption - An amendment to IAS 1 clarifies that liabilities are classified as non-current if the entity has a substantive right to defer settlement for at least **12** months[31](index=31&type=chunk) - The amendment defines 'settlement' as extinguishment with cash, other economic resources, or equity instruments, with an exception for certain convertible instruments[32](index=32&type=chunk) - The Company does not expect a significant impact on its condensed consolidated financial statements from the adoption of the IAS 1 amendment, effective January 1, 2023[32](index=32&type=chunk) [4. Business combination](index=8&type=section&id=4.%20Business%20combination) On April 29, 2022, Akanda acquired 100% of Holigen Limited and its subsidiary RPK Biopharma, a producer of EU GMP grade cannabis flower in Portugal, for $3.0 million cash and 1,900,000 common shares. This acquisition provides immediate EU GMP production capability and market access in the EMEA region. The transaction resulted in a bargain purchase gain of $12,760,563, as the fair value of net assets acquired ($31,891,563) exceeded the consideration transferred ($19,131,000). Holigen contributed a net loss of $814,896 from the acquisition date - On April 29, 2022, Akanda acquired **100%** of Holigen Limited and its subsidiary RPK Biopharma, a producer of EU GMP grade indoor grown cannabis flower in Portugal[33](index=33&type=chunk)[34](index=34&type=chunk) Holigen Acquisition Consideration | Item | Amount | |:---------------------------------------------|:--------------| | Cash | $ 2,600,000 | | Holdback payable | 400,000 | | Fair value of 1,900,000 common shares | 16,131,000 | | **Total consideration transferred** | **$ 19,131,000**| - The acquisition resulted in a bargain purchase gain of **$12.76 million**, as the fair value of net assets acquired (**$31.89 million**) exceeded the total consideration transferred (**$19.13 million**)[37](index=37&type=chunk) - From the acquisition date, Holigen's operations contributed a net loss of **$814.90 thousand**, primarily because it was in a pre-revenue stage[38](index=38&type=chunk) [5. Loss of control of Bophelo Bio Science and Wellness (Pty) Ltd.](index=9&type=section&id=5.%20Loss%20of%20control%20of%20Bophelo%20Bio%20Science%20and%20Wellness%20%28Pty%29%20Ltd.) Akanda Corp. lost control of its subsidiary Bophelo Bio Science and Wellness (Pty) Ltd. on June 30, 2022, following an insolvent liquidation order by the Lesotho Court on July 15, 2022. This resulted in the derecognition of all Bophelo's assets and liabilities and a recorded loss of $2,338,342. Bophelo's operating results have been reclassified as a discontinued operation for both the six months ended June 30, 2022, and 2021 - Akanda Corp. lost control of Bophelo Bio Science and Wellness (Pty) Ltd. on June 30, 2022, due to an insolvent liquidation order signed by the Lesotho Court on July 15, 2022[39](index=39&type=chunk) - The loss of control led to the derecognition of all Bophelo's assets and liabilities and a recorded loss of **$2.34 million**, including **$800.79 thousand** of cash held by Bophelo[39](index=39&type=chunk) Financial Performance of Discontinued Operation (Bophelo Bio Science and Wellness) | Item | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:--------------------------------------|:-------------------------------|:-------------------------------| | Revenue | $ 32,802 | $ — | | Operating expenses | (1,311,825) | (1,385,676) | | Other (expense) income | (129,669) | (140,259) | | Loss on loss of control of subsidiary | (2,338,342) | — | | **Loss on discontinued operation** | **$ (3,747,034)** | **$ (1,525,935)** | [6. Accounts Receivable](index=10&type=section&id=6.%20Accounts%20Receivable) The Company's total accounts receivable increased from $242,357 at December 31, 2021, to $726,865 at June 30, 2022, primarily driven by a significant rise in trade accounts receivable. A substantial portion (87%) of trade accounts receivable at June 30, 2022, was concentrated in two customers Accounts Receivable Breakdown | Item | June 30, 2022 | December 31, 2021 | |:--------------------------|:--------------|:------------------| | Trade accounts receivable | $ 538,988 | $ 29,457 | | Sales taxes receivable | 38,667 | 212,900 | | Other receivables | 149,210 | — | | **Total** | **$ 726,865** | **$ 242,357** | - Trade accounts receivable increased significantly from **$29,457** at December 31, 2021, to **$538,988** at June 30, 2022[42](index=42&type=chunk) - At June 30, 2022, two customers accounted for **87%** of the Company's trade accounts receivable, indicating a concentration risk[42](index=42&type=chunk) [7. Inventory](index=11&type=section&id=7.%20Inventory) The Company's inventory, primarily consisting of consumer packaging and dried cannabis flower finished product at RPK in Portugal, had a carrying amount of $895,773.67 at June 30, 2022, compared to $0 at December 31, 2021. Cost of sales for inventories was $34,704 for the six months ended June 30, 2022 - Inventory, primarily consumer packaging and dried cannabis flower at RPK in Portugal, had a carrying amount of **$895,773.67** at June 30, 2022 (December 31, 2021 - **$0**)[43](index=43&type=chunk) - Cost of sales for inventories amounted to **$34,704** for the six months ended June 30, 2022, compared to **$5,849** in the prior year[43](index=43&type=chunk) [8. Financial asset measured at FVTPL](index=11&type=section&id=8.%20Financial%20asset%20measured%20at%20FVTPL) During the six months ended June 30, 2022, the Company purchased 14,285,714 ordinary shares of The Flowr Corporation for approximately $801,160 as a requirement of the Holigen acquisition. The investment's fair value decreased by $472,311, resulting in a balance of $337,145 at June 30, 2022 - The Company purchased **14,285,714** ordinary shares of The Flowr Corporation for approximately **$801.16 thousand** as a closing deliverable for the Holigen acquisition[44](index=44&type=chunk) Movement of Financial Asset at FVTPL | Item | Amount | |:---------------------------|:------------| | Balance, December 31, 2021 | $ — | | Purchase of investment | 801,160 | | Change in fair value | (472,311) | | Movement in exchange rate | 8,296 | | **Balance, June 30, 2022** | **$ 337,145** | - The investment experienced a change in fair value of **$(472,311)** during the period, resulting in a balance of **$337,145** at June 30, 2022[45](index=45&type=chunk) [9. Property and Equipment](index=11&type=section&id=9.%20Property%20and%20Equipment) The net book value of property, plant and equipment significantly increased from $1,897,748 at December 31, 2021, to $12,608,287 at June 30, 2022, primarily due to acquisitions (Holigen) totaling $12,936,374. However, the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. led to the derecognition of $2,233,028 in net book value of PPE. Depreciation expense for the six months ended June 30, 2022, was $372,723 Property and Equipment Net Book Value | Item | December 31, 2021 | June 30, 2022 | |:-------------------------|:------------------|:--------------| | Land | $ — | $ 864,391 | | Plant and equipment | 415,157 | 11,510,800 | | Leasehold Improvements | 981,071 | — | | Motor Vehicles | 24,118 | 81,594 | | Computers | 8,918 | 29,903 | | Furniture and fixtures | 4,231 | 121,599 | | Capital work-in-progress | 464,253 | — | | **Total** | **$ 1,897,748** | **$ 12,608,287**| - Acquisitions, primarily Holigen, added **$12.94 million** to property, plant and equipment during the six months ended June 30, 2022[46](index=46&type=chunk) - The Company derecognized property, plant and equipment with a net book value of **$2.23 million** due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd[46](index=46&type=chunk) - Depreciation expense for the six months ended June 30, 2022, was **$372,723**, with **$115,890** related to discontinued operations[48](index=48&type=chunk) [10. Right-of-use Assets](index=12&type=section&id=10.%20Right-of-use%20Assets) The Company's right-of-use assets, primarily related to a land lease, were fully derecognized at June 30, 2022, with a net book value of $1,888,715, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. Amortization expense for the six months ended June 30, 2022, was $58,010, recorded within discontinued operations Right-of-use Assets Movement | Item | Land lease | |:-------------------------------------------------------------------|:-----------| | Balance, December 31, 2021 | $ 1,908,877| | Amortization | (58,010) | | Impact of loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. | (1,888,715)| | Movement in exchange rates | 37,848 | | **Balance, June 30, 2022** | **$ —** | - Right-of-use assets with a net book value of **$1.89 million** were derecognized at June 30, 2022, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd[49](index=49&type=chunk) - Amortization on right-of-use assets for the six months ended June 30, 2022, was **$58,010**, recorded within discontinued operations[49](index=49&type=chunk) [11. Intangible Assets](index=12&type=section&id=11.%20Intangible%20Assets) The net book value of intangible assets significantly increased from $259,102 at December 31, 2021, to $23,446,256 at June 30, 2022, primarily due to acquisitions totaling $24,665,773, including a cannabis API manufacturing and GMP license valued at $23,415,814. The loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. resulted in the derecognition of a cannabis operator's license with a net book value of $227,704. The Company's cannabis distribution license is classified as an indefinite-life intangible asset Intangible Assets Net Book Value | Item | December 31, 2021 | June 30, 2022 | |:-------------------------|:------------------|:--------------| | Software | $ — | $ 15,124 | | Licenses | 259,102 | 23,431,132 | | **Total** | **$ 259,102** | **$ 23,446,256**| - Acquisitions contributed **$24.67 million** to intangible assets, including a cannabis API manufacturing and GMP license with a carrying value of **$23.42 million** at June 30, 2022[50](index=50&type=chunk) - A cannabis operator's license with a net book value of **$227,704** was derecognized due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd[50](index=50&type=chunk) - The Company's cannabis distribution license is classified as an indefinite-life intangible asset, with a remaining useful life of approximately **9.5** years for finite-life intangible assets[51](index=51&type=chunk) [12. Loan Receivable](index=13&type=section&id=12.%20Loan%20Receivable) The loan receivable from Cellen Life Sciences Limited increased from $134,770 at December 31, 2021, to $485,272 at June 30, 2022. This loan was subject to a restructuring arrangement after the reporting period, as detailed in Note 18 Loan Receivable from Cellen Life Sciences Limited | Item | June 30, 2022 | December 31, 2021 | |:-----------------------------------|:--------------|:------------------| | Loan to Cellen Life Sciences Limited | $ 485,272 | $ 134,770 | - The loan receivable from Cellen Life Sciences Limited increased from **$134,770** to **$485,272** during the six months ended June 30, 2022[52](index=52&type=chunk) - This loan was subject to a restructuring arrangement subsequent to June 30, 2022, as further described in Note **18**[52](index=52&type=chunk) [13. Lease Liability](index=13&type=section&id=13.%20Lease%20Liability) The Company derecognized its lease liability, which had a net book value of $2,570,939, at June 30, 2022, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. Prior to derecognition, the total lease liability was $2,418,706 at December 31, 2021 Lease Liability | Item | June 30, 2022 | December 31, 2021 | |:------------|:--------------|:------------------| | Current | $ — | $ 439,709 | | Non-current | — | 1,978,997 | | **Total** | **$ —** | **$ 2,418,706** | - The Company derecognized its lease liability with a net book value of **$2.57 million** at June 30, 2022, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd[53](index=53&type=chunk) Undiscounted Minimum Lease Payments (Bophelo Bio Science and Wellness (Pty) Ltd) | Year ended December 31: | Amount | |:------------------------|:--------------| | 2022 remaining | $ 110,689 | | 2023 | 265,654 | | 2024 | 265,654 | | 2025 | 265,654 | | 2026 | 265,654 | | Thereafter | 3,254,264 | | **Total** | **$ 4,427,569** | [14. Loans Payable](index=13&type=section&id=14.%20Loans%20Payable) The Company's loans payable include both Louisa Mojela loans and bank loans. All Louisa Mojela short-term loans were derecognized at June 30, 2022, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. New bank loans from Caixa, totaling $1,262,785 (short-term) and $2,570,127 (long-term) at June 30, 2022, were granted to Holigen Ltd. and its subsidiaries for capital and operational needs, secured by mortgage of building and equipment [14.a Louisa Mojela loans](index=13&type=section&id=14.a%20Louisa%20Mojela%20loans) Three short-term loans from Louisa Mojela, totaling approximately $584,570 in capital value, were granted to Bophelo Bio Science and Wellness (Pty) Ltd. to fund working capital and operating costs. All these loans were derecognized at June 30, 2022, due to the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. following its liquidation - Three short-term loans from Louisa Mojela, totaling approximately **$584,570**, were provided to Bophelo Bio Science and Wellness (Pty) Ltd. for working capital and operating costs[57](index=57&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - All Louisa Mojela loans were derecognized at June 30, 2022, as a result of the loss of control of Bophelo Bio Science and Wellness (Pty) Ltd. due to its insolvent liquidation[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [14.b Bank loans](index=14&type=section&id=14.b%20Bank%20loans) Holigen Ltd. and its subsidiaries received bank loans from Caixa, totaling $1,262,785 (short-term) and $2,570,127 (long-term) at June 30, 2022. These loans, for building construction and equipment purchase, bear interest at 3.00% and are secured by mortgage, with repayment dates in February and June 2026 - Holigen Ltd. and its subsidiaries have short-term bank loans from Caixa totaling **$1.26 million** at June 30, 2022, for building construction and equipment[61](index=61&type=chunk) - Long-term bank loans from Caixa for Holigen totaled **$2.57 million** at June 30, 2022, also for building construction and equipment[62](index=62&type=chunk) - Both short-term and long-term Caixa loans bear interest at **3.00%**, are secured by mortgage of building and equipment, and have repayment dates in February and June **2026**[61](index=61&type=chunk)[62](index=62&type=chunk) [15. Share Capital](index=14&type=section&id=15.%20Share%20Capital) The Company has an unlimited authorized share capital of common shares with no par value. As of June 30, 2022, 30,809,026 common shares were issued and outstanding, with a capital value of $47,053,521, reflecting significant issuances from the Holigen acquisition, IPO, private placements, and convertible note conversions. The weighted average common shares outstanding for EPS calculations was 26,835,444. The Company also granted 2,480,532 restricted stock units (RSUs) to directors, officers, and employees, incurring $576,340 in share-based payment expenses [15.a Authorized](index=14&type=section&id=15.a%20Authorized) The Company has an authorized share capital of an unlimited amount of common shares with no par value - The Company's authorized share capital consists of an unlimited amount of common shares with no par value[63](index=63&type=chunk) [15.b Shares issued and outstanding](index=15&type=section&id=15.b%20Shares%20issued%20and%20outstanding) As of June 30, 2022, 30,809,026 common shares were issued and outstanding, with a capital value of $47,053,521. Key issuances during the period included 1,900,000 shares for the Holigen acquisition, 4,000,000 shares from the IPO, and 1,645,745 shares upon conversion of a note Shares Issued and Outstanding | Item | Number of shares | Capital | |:---------------------------------------------|:-----------------|:--------------| | Balance, December 31, 2021 | 22,231,318 | $ 7,255,695 | | Issuance of shares in Holigen acquisition | 1,900,000 | 16,131,000 | | Issuance of shares to ASDT | 869,963 | 2,174,908 | | Issuance of shares from private placement | 162,000 | 278,481 | | Issuance of shares from IPO | 4,000,000 | 14,654,593 | | Issuance of shares upon conversion of note | 1,645,745 | 6,559,000 | | Loss of control of Bophelo Bio | — | (156) | | **Balance, June 30, 2022** | **30,809,026** | **$ 47,053,521**| - The Company issued **1,900,000** common shares at a fair value of **$8.49** per share as part of the consideration for the Holigen acquisition[65](index=65&type=chunk) - The Company issued **4,000,000** common shares in its IPO for gross proceeds of **$16.00 million** and net proceeds of **$14.68 million**[65](index=65&type=chunk) - **1,645,745** common shares were issued to Halo Collective, Inc. at **$4** each to settle a convertible debenture of **$6.58 million**[65](index=65&type=chunk) [15.c Earnings per share](index=15&type=section&id=15.c%20Earnings%20per%20share) The weighted average number of common shares outstanding for basic and diluted earnings per share for the six months ended June 30, 2022, was 26,835,444, an increase from 13,129,212 in the prior year. The Company had no potential dilution during these periods - The weighted average common shares outstanding for basic and diluted EPS was **26,835,444** for the six months ended June 30, 2022, compared to **13,129,212** in **2021**[66](index=66&type=chunk) - The Company reported earnings per share from continuing operations of **$0.04** for the six months ended June 30, 2022, and a total loss per share of **$(0.10)**[5](index=5&type=chunk) [15.d Restricted stock units](index=16&type=section&id=15.d%20Restricted%20stock%20units) On April 22, 2022, the Company granted 2,480,532 restricted stock units (RSUs) to directors, officers, and employees under its Employee Share Ownership Plan (ESOP). A service cost of $576,340 related to these RSUs was recognized in general and administrative expenses for the six months ended June 30, 2022 - The Company granted **2,480,532** restricted stock units (RSUs) to directors, officers, and employees on April 22, 2022, under its ESOP[67](index=67&type=chunk) - A service cost of **$576,340** related to these RSUs was included in general and administrative expenses for the six months ended June 30, 2022[67](index=67&type=chunk) [16. Related Party Transactions](index=16&type=section&id=16.%20Related%20Party%20Transactions) The Company settled a secured convertible debenture with Halo Collective Inc. for $6,582,980 by issuing 1,645,745 common shares on March 15, 2022, triggered by its IPO. Key management personnel remuneration, including stock-based compensation, totaled $1,567,209 for the six months ended June 30, 2022. Balances payable to related parties decreased significantly from $9,601,708 at December 31, 2021, to $743,188 at June 30, 2022, primarily due to the settlement of the convertible debenture and derecognition of loans to Louisa Mojela - On March 15, 2022, the Company settled a secured convertible debenture with Halo Collective Inc. for **$6.58 million** by issuing **1,645,745** common shares, triggered by its IPO[68](index=68&type=chunk) Key Management Remuneration | Item | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:-------------------------------|:-------------------------------|:-------------------------------| | Key Management Remuneration | 1,079,324 | 114,235 | | Stock-based compensation | 487,885 | — | | Short term accommodation expense | — | 35,924 | | **Total** | **$ 1,567,209** | **$ 150,158** | - Balances payable to related parties decreased from **$9.60 million** at December 31, 2021, to **$743,188** at June 30, 2022, reflecting the settlement of the convertible debenture and derecognition of Louisa Mojela loans[69](index=69&type=chunk) [17. Segmented Information](index=17&type=section&id=17.%20Segmented%20Information) The Company operates in three reportable segments: Cultivation (medical cannabis cultivation in Portugal and formerly Lesotho), Distribution (medical cannabis distribution in the UK), and Corporate (head office and general corporate expenses). The Cultivation segment's assets significantly increased to $37,990,837 at June 30, 2022, primarily due to the Holigen acquisition, while the Distribution segment generated the majority of external revenues ($15,580) for continuing operations. The Cultivation segment reported a profit of $5,744,346, largely influenced by the bargain purchase gain, while the Distribution and Corporate segments reported losses - The Company has three reportable segments: Cultivation (RPK/Holigen in Portugal), Distribution (Canmart Ltd in the UK), and Corporate (head office costs)[74](index=74&type=chunk) Reportable Segment Assets and Liabilities | Item | June 30, 2022 | December 31, 2021 | |:-----------------------------------|:--------------|:------------------| | **Segment Assets:** | | | | Cultivation | $ 37,990,837 | $ 4,127,138 | | Distribution | 4,297,366 | 3,716,771 | | Corporate | 1,194,078 | 205,797 | | **Total Segment Assets** | **$ 43,482,281**| **$ 8,043,909** | | **Segment Liabilities:** | | | | Cultivation | 6,494,334 | 3,020,730 | | Distribution | 379,982 | 323,129 | | Corporate | 1,967,505 | 6,899,644 | | **Total Segment Liabilities** | **$ 8,841,821** | **$ 10,243,143** | Reportable Segment Revenues and Income (Loss) (Six months ended June 30, 2022) | Item | Cultivation | Distribution | Corporate | Total | |:-----------------------------------|:------------|:-------------|:------------|:--------------| | Revenues from external customers | $ 57,516 | $ 15,580 | $ — | $ 73,096 | | Other income (expense) | 12,760,356 | (6,600) | (646,494) | 12,107,262 | | Discontinued operations | (3,747,034) | — | — | (3,747,034) | | **Reportable segment income (loss)** | **$ 5,744,346** | **$ (6,867,849)**| **$ (1,470,241)**| **$ (2,593,744)**| [18. Subsequent Events](index=20&type=section&id=18.%20Subsequent%20Events) Subsequent to June 30, 2022, the High Court of Lesotho formally placed Bophelo Bio Science and Wellness (Pty) Ltd. in liquidation, an action contested by Akanda. The Company received a Nasdaq notification for non-compliance with the minimum bid price rule. Akanda granted 4,503,514 RSUs and entered into several consulting agreements, with most consultants settled via RSU grants. A loan restructuring agreement was finalized with Cellen Life Sciences Limited, extending the repayment term to November 2026 and deferring interest. The Company also terminated its President and entered into a supply agreement with Cansativa GmbH for at least 1,000 kg of dried cannabis flower - On July 26, 2022, the High Court of Lesotho placed Bophelo Bio Science and Wellness (Pty) Ltd. in liquidation, an action Akanda intends to contest and investigate[80](index=80&type=chunk) - On September 27, 2022, Nasdaq notified the Company of non-compliance with the minimum bid price requirement (**$1.00** per share for **30** consecutive business days), granting **180** calendar days to regain compliance[81](index=81&type=chunk) - Subsequent to June 30, 2022, the Company granted **4,503,514** Restricted Share Units (RSUs) to directors and consultants and entered into consulting agreements totaling over **$2 million** in cash and RSU payments[82](index=82&type=chunk)[83](index=83&type=chunk) - A Loan Restructuring Agreement with Cellen Life Sciences Limited on November 10, 2022, extended the **$0.5 million** loan repayment to November **2026**, with interest deferred until November **2024**[83](index=83&type=chunk) - On August 8, 2022, the Company's subsidiary RPK entered into a supply agreement with Cansativa GmbH to deliver at least **1,000 kilograms** of dried cannabis flower over the first **12-month** term[84](index=84&type=chunk)