MDH Mendell Helium Plc

8 April 2024

Voyager Life plc

("Voyager" or the "Company") 

Termination of proposed merger with Northern Leaf

Trading update

Voyager, the health and wellness group formulating, manufacturing and supplying high-quality Cannabidiol (CBD), hemp seed oil and hemp-related products, announces that it has terminated discussions with Northern Leaf plc ("Northern Leaf") for a proposed merger of the two companies (the "Proposed Merger") which was announced on 13 March 2024.  The Company also provides a trading update.

Termination of the Proposed Merger

The principal reason for the termination was that the fundraising to support the Proposed Merger could not be completed in line with Northern Leaf's requirements for financing its business plan.

Background

Voyager commenced discussions with Northern Leaf towards the end of 2023 at a time when Northern Leaf's business was severely cash constrained.  Northern Leaf subsequently raised £1.75 million in a rights issue from shareholders in December 2023 and, in January 2024, supplied Voyager with its forecasts for 2024 and beyond.  The parties agreed terms for the Proposed Merger on the basis of these forecasts which included a plan to undertake a fundraising to provide working capital for the enlarged group.  As Northern Leaf was likely to need financing by April 2024, the parties agreed to work towards this timetable for completion.

Voyager considered that the Proposed Merger represented a valuable opportunity for the Company by creating the first vertically integrated cannabis company in the British Isles with both pharmaceutical and health & wellness operations.  Furthermore, in the opinion of the Directors, the scale of Northern Leaf's facility in Jersey (Channel Islands), which has to date had around £33 million spent on it, offset the near term funding requirements given that the initial consideration for the Proposed Merger was approximately £1 million (based on the Voyager share price at the time).

Following announcement of the Proposed Merger on 13 March 2024, the two companies commenced the planned fundraising. This was well received with a number of confirmed orders from new and existing investors by the first week of April 2024 and a larger number of investors who had indicatively expressed interest in participating, including members of the two companies' management teams.  However, in spite of best efforts by both parties, a combination of the Easter holiday period and slower investor response times made it clear that the fundraising was unlikely to complete within the targeted timeframe (noting that issuing shares pursuant to the fundraising was always subject to Voyager shareholder approval).  Voyager consequently had no option but to terminate the Proposed Merger.

Trading update

Voyager has for some time believed that consolidation in the cannabis sector was likely and that its listing on Aquis would be a particular benefit for privately held companies in the sector.  Its acquisition of Amphora Health Limited ("Amphora") announced on 30 January 2024 is an example of that strategy.  Whilst the Proposed Merger represented one of the more promising opportunities in the sector, Voyager has also been contacted by other prospective partners and so will now continue to explore those.  It is, however, important to emphasise that it was always the Company's intention to enter into any combination from a position of strength and, in that regard, Voyager is pleased to provide the following updates:

(i)    Since the summer of 2023, Voyager has been manufacturing topical products for one of the best known cannabis brands in the UK.  Initially three products were supplied but a fourth was added shortly thereafter and, at the start of 2024, Voyager undertook a research and development programme for this customer with the outcome being that further products will be added in the coming months.  This customer sells through some of the best known retailers in the UK and has reordered regularly since receiving its first delivery.

(ii)   Contract manufacturing has become a core part of Voyager's business through its VoyagerCann division.  UK customers make up the majority of orders but VoyagerCann has also dealt with customers from Europe, Australia and the US.  Although it positions itself as a specialist in CBD and hemp, the Company also offers a manufacturing service across the wider plant based health & wellness market and recently employed a qualified cosmetic chemist to strengthen its new product development and formulation offerings.

(iii)  Petcare remains a core part of the Voyager brand and the Company successfully pitched to Pets at Home last year with four products now available on Pets at Home's website since November 2023.  Initial take up has been successful with six re-orders since and the next step would be for the products to go in-store.  Voyager is in discussions with Pets at Home in this regard.  With 457 pet care centres and 339 grooming salons, this remains a significant opportunity for the Company.

(iv) Following both its online and in-store success with its petcare range, in March 2024 Voyager contracted with Unified Retail to manage sales of its pet range on Amazon.  Potential volumes at the UK's biggest online retailer could be significant and, as petcare volumes rise across all of its sales outlets, Voyager continues to generate savings through economies of scale - primarily packaging and ingredients.

(v)  In line with competitors on the high street, Voyager's retail stores had a difficult second half to the 2023 calendar year and the Company has reduced staffing and revised its product mix to address this challenge.  Two particular initiatives stand out.  The creation of a treatment room in the Edinburgh store has both generated revenue for use of the room as well as additional footfall.  In Dundee, the store is now operated as an "outlet" selling, in addition to the regular range, Voyager and other third-party products with damaged packaging, shorter shelf lives or discontinued lines.  This has been a particular success and Voyager has since offered this service to others in the CBD industry as a way of clearing their excess stock on the basis that sales proceeds are shared with Voyager.

(vi) The acquisition of Amphora provides two important additions for Voyager's business. The Company now has 23 products validated on the FSA's novel foods list, thereby further opening up the UK market for ingestible CBD products.  Perhaps more significantly, it enables Voyager to enter the potentially lucrative non-disposable vape market. In this regard, the VoyagerCann team have been making preparations to commence manufacturing the Amphora formulations.  Improvements including better cartridges and higher CBD content are being developed but the team is already confident that VoyagerCann will be able to produce a range that is significantly differentiated from the competition but at a competitive price.

The fundraising that was undertaken as part of the Proposed Merger also had a minority element that was anticipated to be utilised within Voyager's existing business.  As well as general working capital purposes, to enable Voyager to more efficiently handle the opportunities described above and elsewhere within its business, there is an intention to acquire some additional equipment for its manufacturing division, VoyagerCann.  Specifically, management believe that more automation on filling and labelling will significantly increase the Company's production capacity.  It will be necessary for the Company to raise funds in the near term for this and general working capital purposes.  In addition to issuing new equity, management are also exploring other avenues which could include grants and other government support for small businesses. The Company continues to manage its working capital position.

Nick Tulloch, Chief Executive Officer and Founder of Voyager, said: "Needless to say, it is hugely disappointing to bring our proposed merger with Northern Leaf to an end.  As we look back over the past few months, a transaction well received by the industry and investors has been prevented by circumstances outside of our control.

"Our interest in expanding in the cannabis sector through M&A is undiminished and we continue to see numerous opportunities.  Many companies in this space are now cash-constrained due to development costs outpacing market growth and, whilst this does create excellent value propositions, as a management team we go in fully aware that work is needed to reinvigorate or accelerate sales.

"The proposed merger with Northern Leaf was always about bringing together two businesses that could be leaders in their respective halves of the cannabis industry.  Although that transaction cannot now proceed, it does not change the pace of developments that Voyager already has in place.  Through contract manufacturing and petcare, we have built a strong position in two significant markets and we expect to continue to make progress in 2024.  This year we will also enter the CBD non-disposable vape market through our acquisition of Amphora and, with one of the largest product ranges in the UK, supported by in-house development and manufacturing, we are well placed to take advantage of opportunities in the market."

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

ENDS

Enquiries:

Notes to Editors:

About Voyager

Voyager was founded in 2020 and is based in Perth, Scotland.  The Company's primary objective is the formulation, manufacture and supply of high quality CBD and hemp seed oil products although it also produces several other complementary products, the majority of which are manufactured from the hemp plant.  Its product categories include a pet range which has rapidly developed into one of the Company's best sellers.   The Company sells online, through third party stores and in its own stores which are located in St Andrews, Edinburgh and Dundee.  The Company has three principal retail brands: Voyager, focused on health & wellness and petcare; Ascend Skincare, its beauty range; and Amphora, with 23 products validated on the FSA's novel foods list and a range of vapes.  Voyager products are currently available from Cornwall to Shetland in online and brick-and-mortar outlets.

The Company's philosophy of plant-based health and wellness is embodied in its mission statement and hashtag of "Choose you". With an experienced team and a product line created in line with the UK's regulatory regime, Voyager aims to become the trusted brand in this increasingly popular health and wellness space.

Through Voyager's bespoke skincare product creation and development division, voyagerCann, the Company also offers a full turnkey service to other CBD, skincare and cosmetics brands assisting them in developing and launching new products with a manufacturing and distribution facility in Scotland.

Website and social media links:

Voyager:

https://voyagercbd.com/

https://www.instagram.com/voyagercbd/

https://twitter.com/voyagercbd

https://www.linkedin.com/company/voyager-cbd/

https://www.facebook.com/voyagercbd/

voyagerCann:

https://voyagercann.com/

https://www.instagram.com/voyagercann/

https://twitter.com/voyagercann/

https://www.linkedin.com/company/voyagercann/

https://www.facebook.com/voyagercann/

Amphora:

https://www.infusedamphora.com/

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.