Cronos Australia (ASX:CAU) has used its wholly-owned subsidiary to acquire 51 per cent of Cannadoc with two of its founders, Dr David Feng and Kevin Brabazon.
Cannadoc currently operates a medical practice in Melbourne from which a range of cannabinoid-based and other treatments are provided to patients. The medical practice has been in operation for approximately one year.
Cronos said it will work with the founders to expand the Cannadoc business. This includes engaging additional medical practitioners and opening further clinics.
The founders have collectively been paid a purchase price of $300,000 in cash. "They may also be entitled to receive two further earn out payments on the first and second anniversaries of completion," said the company in a statement.
"In addition to the above payments, the Founders have received a total of one million Performance Rights over ordinary shares in Cronos Australia, with each Founder having been issued half of the total Performance Rights," it added.
Cronos said it will also make available a secured loan facility of up to $1 million to Cannadoc on commercial terms. This can be used for working capital purposes and to further expand the business.
“We are excited about the opportunity to bring Cannadoc into the Cronos Australia group,” said Cronos CEO Rodney Cocks. “We also look forward to working closely with David and Kevin to expand the Cannadoc business”, he added.
Cannadoc founder David Feng said, “We are pleased to join forces with Cronos Australia and to continue to build our vision for an innovative approach to delivering significantly improved patient outcomes through cannabinoid-based therapies and other treatments.”