Phytotecnia Limited

By Phytotecnia Limited

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NZ $946,496 pledged


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About

Phytotecnia Limited

If you believe in the potential of medicinal cannabis and value a down to earth business approach based in science and expertise, Phytotecnia might be of interest.

With our own resources and thanks to the huge support of family and friends, our project is well underway and has met all the milestones on time and budget. We are now about to start the first commercial production cycle and we would like to maximise our production capacity.


Letter from the founders

Medicinal cannabis came to us naturally three years ago looking for our expertise. Initially sceptical about the potential of cannabis as a medicine, we soon became completely convinced about its possibilities. At the same time we realised the enormous challenges that a business in this industry would face: lack of scientific knowledge in basic areas of cultivation and manufacturing; emerging markets with evolving demands; and fast developing and diverse regulatory frameworks. In this context, we believe that the only possible approach to succeed in the industry is a learner’s approach: understand and acknowledge the complexity of the medicinal cannabis industry and develop a business model based on expertise, hard work, and patience.

Our approach avoids speculation and misleading information and acknowledges the legacy of those that have been working with cannabis, frequently underground, for many years.

With our own resources and thanks to the huge support of family and friends, our project is well underway and has met all the milestones on time and budget. We are now about to start the first commercial production cycle and we would like to maximise our production capacity.

If you have the patience and interest to read our Information Memorandum, you’ll see that this is not just another medicinal cannabis company. We have a different approach that might not be extremely attractive for conventional investors looking for rapid profits based on purely speculative forecasts. We are convinced that our approach based on science and facts, on expertise, hard work and patience, is not incompatible with high profitability, on the contrary, we believe it is the only way to succeed in the long term.

We humbly believe that Phytotecnia will be really profitable for many people in many ways. Hopefully you will reach the same conclusion after reading this information memorandum and want to join us.


Our Team

Phytotecnia was founded by us, Irene López-Ubiria and Álvaro Vidiella-Salaberry, in 2019. We are agricultural engineers with a doctorate and a masters degree in horticulture, and more than 20 years of experience in applied research and production. Originally from Spain, our nine years in NZ have seen us working as part of the leadership teams of NZ Avocado, Riversun Nursery, and Hikurangi Cannabis Company (now RUA Bioscience). In our roles, we have successfully managed multidisciplinary teams of experts to achieve the goals of each company. We are used to working in highly competitive commercial environments with complex production systems and evolving market demands.


What have we done so far?

Phytotecnia obtained a licence to cultivate cannabis for research purposes in February 2020. We will start commercial production as soon as we are granted the corresponding licence which is just pending a location inspection in the coming weeks.

We have built a dual-purpose research and production glasshouse and two indoor growing chambers, designed to produce conservatively 30 kg of medicinal cannabis dried flower monthly all year round.

phytotechnica_premises_and_progress
Pictured: Phytotecnia founders Irene López-Ubiria and Álvaro Vidiella-Salaberry

The research programme is underway. We have established strategic relationships with research entities in New Zealand and internationally in the areas of breeding and cultivation. Seeds of selected varieties have already been obtained to form the core of our breeding programme. Different cultivation parameters are being studied. We have secured funding from Callaghan Innovation to carry out our research programme during 2020-2021. We are characterising and selecting the elite lines to become the first mother plants for our commercial production. We will start the commercial production as soon as we are granted the corresponding licence which is expected in the next weeks.


What's Next?

We will start producing dried flower, and once GMP certification is obtained, we will include extracts in our product portfolio. We will in parallel advance in our research programme optimising the production system, and in characterising and selecting our breeding lines so we can offer dried flower and extracts with different therapeutic properties produced from varieties adapted to commercial cultivation and manufacturing environments.


What are the risks/challenges our company faces?

In our Information Memorandum we have included a list of the main risks that Phytotecnia will face and how we mitigate them. We have focused on the risks inherent to a new company in the cannabis industry that can have a significant impact on its performance or viability.


A Note from PledgeMe

We have completed a Veda check on the company and its Directors, as well as Google checks. 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 7

New media coverage

12/01/2021 at 5:11 PM

 

Kia ora koutou,

We hope you had a very nice break and that the New Year will bring you good things.

Although this year Christmas did not come with holidays for us, we have enjoyed a quiet-work sort of break, and a bit of the feeling of the ant in The Ant and The Cicada fable. Do not get us wrong, we love the artist nature of the cicada and the fable's ambivalent meaning. 

Having the commercial licence, we have no restrictions related to the number of plants that we can cultivate and the number and type of varieties that we can import, and we are hands on working on the new seed import licences. We are also working on the equipment of the glasshouse and are waiting in anticipation the new growing lights and other technical equipment that will arrive soon.

Some local newspapers and other media have expressed their interest in updating their audiences on our progress. We are really happy to see that Phytotecnia is of interest to many people. Today we are very pleased to be featured by Brent Melville in BusinessDesk: Phytotecnia's big play into cannabis is baby steps.

Phytotecnia’s strategy to reach the people that might be interested in participating in our project has been based on an informative style of publicity rather than on advertisements disguised as news. This informative style of the treatment of Phytotecnia in the news has had an important impact on our PledgeMe campaign. The success in attracting investors of our low-key approach is very reassuring.

Phytotecnia’s new coverage in the press will give us the chance to access more people potentially interested in being part of our project, however, please do not forget to spread the word.

Kind regards

 

Irene and Álvaro

Christmas update

23/12/2020 at 2:37 PM

Kia ora koutou,

Since yesterday we can officially say that Phytotecnia is licensed to cultivate cannabis for commercial purposes. This is the culmination of a great effort and the result of the collaboration of many people. When we were already assuming that the licence document would be issued after the Christmas break, yesterday we received a text message from the officer that performed the site inspection: “I have a Christmas present for you. Please check your inbox”. What a special present!

The text message reflects very well why we are here in New Zealand, and why this is probably one of the best countries to be working at with medicinal cannabis (to be fair, we could have also left the sentence as "this is probably one of the best countries to be" considering the privileged situation of our country in the current state of the world). Although there is still work to do educating some people about medicinal cannabis and finetuning the implementation of the regulatory framework, the general attitude, particularly of the public administration, is very positive. While working in 2018 to obtain the first licence to cultivate cannabis in New Zealand (back then for research purposes), and while importing the first legal cannabis seeds in the country, the relationship with the Ministry of Health was impeccable as it has been during the recent process to obtain the commercial licence for Phytotecnia. The Medicinal Cannabis Agency has been collaborative and reasonably flexible to open the interpretation of the regulations, which couldn’t be any other way given the learning stage that we all are going through.

Work at Te Horo is progressing as planned. On Monday the much-expected water tanks arrived, which has been quite a mission because of the country-wide shortage of tanks due to the recent draughts. We are really lucky that the Te Horo site has access to plenty of water, although we are very conscious of the value of this scarce resource and will be collecting all the water coming from the roof of the glasshouse and implementing water saving irrigation technics. We are also progressing with the works related to the power supply.

The plants are looking healthy and strong and ready to be cloned. They seem to know that, with the licence ready, they can now move to the glasshouse and receive some natural light!

The crowdfunding is now slow as expected at this time of the year. Time to rest, recapitulate and focus on the new year.

We wish you a very nice Christmas.

Irene and Álvaro

Extension

15/12/2020 at 7:22 PM

Kia ora koutou,

This was supposed to be the last update regarding our PledgeMe campaign. We are really pleased with the response to Phytotecnia’s share offer, as we have already said, not only for the amount raised but for the quality of the investors. We are conscious that this has not been a conventional PledgeMe equity crowdfunding campaign and we feel extremely satisfied with what we have achieved.

We were going to write an enormous THANK YOU update and enter another dimension… but yesterday we were about to finish our day when our contact person in PledgeMe (by the way, the first person to invest through the campaign, which was the first of the series of very nice surprises that we have received along these weeks) offered us the possibility to extend the campaign… What a poisoned chalice…:)

These last hours we have been thinking on how to proceed. Phytotecnia is a slow cooking project rather than a takeaway product. When we introduce the company to new people, explaining the context, the opportunity and the idea requires time and patience. Many of the investors have carefully read all the information and understand the business model and style. Others know the project first-hand because they have been working with us. We decided to not to work with a public relations agency since, after trial and error, we observed that the message was being standardised and denaturalised. We have not certainly reached the masses, but we have written and transmitted our messages ourselves, sometimes better, sometimes worse, but with honesty. We believe that there might be people out there that could still be worth trying to reach. We have a steady flow of support and, we have concluded that we will keep the campaign open until mid-January, as much as it is tempting to finish it tomorrow and move on to another stage.

We would like to reassure you that this extension will not impact the timeline of the project, since we will keep on working during this period. We are planning another round of sowing imminently and we will also make clones of selected mother plants. We will continue to update you on the progress of the project.

We apologise for the last-minute change, particularly to those that have been rushing to meet the deadline.

With gratitude,
Irene and Álvaro

Note: For those of you that have already ivested, PledgeMe will not ask you to pay for your shares until the campaign is over in January. 

Last Sunday update

13/12/2020 at 5:09 PM

Kia ora koutou,

   Yesterday we reached 700k. This amount is of extraordinary significance.

   The capital raised allows Phytotecnia to meet its goals. We will need to be wise and creative but that has never been a problem for us. We couldn’t be in a better position. With our company’s mix of independence and leanness, and the support of the shareholders we can move with flexibility and fast. We feel confident. Phytotecnia’s business approach and the technical implementation of the project are very different compared to other medicinal cannabis companies in New Zealand, and having the support of the Ministry of Health and Callaghan Innovation among others, is extremely reassuring and rewarding.

   The above feels good, but yesterday we also realised again how important our project can be for many people. We welcomed to the company a woman, a mother with a powerful story, with a huge desire to support the legal production of medicinal cannabis. Her generosity and humbleness were overwhelming and made us feel absolutely honoured to have her as a shareholder (she really made our day). Her investment made us reach the 700k mark an this is why this number is so significant for us.

   We are close to the end of this crowdfunding journey. To be honest, we are looking forward to finish this chapter and focus completely on what really matters. On Friday, the people from Electra finished the works for the power lines and installed the super transformer, and now we have power! We have been using a generator and are very happy to enjoy the silence of the place again. Everything is getting aligned to start the commercial production and we cannot wait for that moment.

   We will not be bothering you with this request much more but please, if you know someone that could be interested in this project, let them know where they can find us. There is no time for procrastination and the opportunity is worth it.

 Ngā mihi,
 Irene and Álvaro
 

This is our new super tranformer. It does not look very impressive, but it will feed the current glasshouse and the next one. Thank you very much Henk! We really appreciate the hard times you had to go through and your hard work.

Thursday update

10/12/2020 at 10:53 AM

Kia ora koutou,

Here comes the update that we were waiting for… Yesterday we passed nicely the MoH site inspection to get the commercial licence!

Following thorough planning, intense work and last-minute rushes we got there, and now we are just waiting for the bureaucratic process to receive the licence document. The successful result of almost three hours of detailed inspection of the implementation of our security plan and of our production processes confirm the solidness of Phytotecnia.

During the inspection, we had the feeling that we were backed by a numerous group of people that believe in this project, and this gave as an extra amount of confidence and reassurance. These are intangible things with a real effect. Thank you all.

With the licence around the corner, Phytotecnia is now stronger. It is more attractive and has definitely more value. We are now approaching the end of the crowdfunding campaign and the end of this very particular opportunity, let’s give it the last big push!

With kind regards,
Irene and Álvaro
 

Friday update

04/12/2020 at 5:44 PM

Kia ora koutou,

We are ending this week exhausted but very happy. After many days of hard work to get everything ready for the site inspection next week (the final step to get the commercial licence), yesterday was a wonderful day for us and for the people that believe in the potential of medicinal cannabis.

Yesterday, the United Nations (UN), following the recommendation from the World Health Organisation (WHO), removed cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs, a list of narcotics with very little or no therapeutic value like heroin. This means that the UN finally recognises the medicinal value of cannabis. Many more countries will now regulate the medicinal use of cannabis. Among other, all the European Union countries voted in favor of the removal except for Hungary. This is extremely good news for many people with different medical conditions that are desperately waiting for legal access to medicinal cannabis.

And… we reached the minimum threshold of NZD 500.000! We are enormously grateful for all the support that our project is receiving. Some of you have left very nice messages that feel like a caress in the midst of this intense journey. Phytotecnia now belongs to a very diverse group of shareholders that are adding an incredible value that goes far beyond the value of their shares. We feel the weight of the responsibility but also the strength that the new shareholders are transmitting.

We have passed the equator of the crowdfunding campaign and are getting closer to the end of this opportunity to participate in a very particular journey, spread the word!

Kind regards

Irene and Alvaro

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    Details

    Offer Details

    Current Valuation 6,000,000
    Raise Minimum 500,000
    Raise Maximum 2,000,000
    Share Price 1.00
    Maximum Shares Offered 2,000,000
    Explanation of valuation:

    To value our Company is something that makes us feel quite awkward. To make a valuation based on enterprise values of comparative players that do not have a record of performance, in an industry that is just starting, does not make much sense. Without a record of performance, these enterprise values are based on forecasts made by the companies themselves, estimating their own capability to perform. However, we understand that we need to value our Company to determine the price of the shares that we are offering.

    In November 2019, BDO estimated a post-money valuation for Phytotecnia between NZD 10 M and NZD 20 M, based on our business plan and on enterprise values of other New Zealand medicinal cannabis companies when raising capital. Back then we did not have the licence to grow cannabis for research purposes, the glasshouse that currently is finished was only a plan and the Medicinal Cannabis Scheme by the Ministry of Health was not approved yet.

    Considering the above and being true to our philosophy of avoiding speculation and being real and honest, we have concluded that a pre-money valuation of NZD 6 M is a fair value.

    Financial Summary

    Prev Year Current Year Est. FY 2022 Est. FY 2023
    Revenue NZ $25,775 NZ $1,394,000 NZ $4,717,500 NZ $5,610,000
    Operating Expenses NZ $530,404 NZ $1,079,095 NZ $1,415,217 NZ $2,361,800
    EBITDA -NZ $504,629 NZ $314,905 NZ $3,302,283 NZ $3,248,200
    Net Profit -NZ $513,548 NZ $222,454 NZ $3,176,526 NZ $2,885,197

    Company Details

    Company Name: Phytotecnia Limited

    Company Number: 7735017

    Company Documents

    CertIncorporation_Phytotecnia.pdf

    (application/pdf, 587 KB, uploaded 12 November 2020)

    CompanyyExtract_Phytotecnia.pdf

    (application/pdf, 745 KB, uploaded 12 November 2020)

    Phytotecnia_Limited_-_Profit_and_Loss_-_October_2020.pdf

    (application/pdf, 27.7 KB, uploaded 12 November 2020)

    Phytotecnia_Limited_-_Balance_Sheet_-_October_2020.pdf

    (application/pdf, 28 KB, uploaded 12 November 2020)

    Constitution_Phytotecnia.pdf

    (application/pdf, 209 KB, uploaded 12 November 2020)

    Shareholders_Agreement_Phytotecnia.pdf

    (application/pdf, 407 KB, uploaded 12 November 2020)

    Phytotecnia_IM_121120_final.pdf

    (application/pdf, 2.06 MB, uploaded 12 November 2020)

    Director Details

    Name Role Profile URL Invested?
    Irene Lopez-Ubiria Managing Director https://app.companiesoffice.govt.nz/companies/app/service/services/documents/53D37201A087210BF080A2E1B55BB5CA
    Alvaro Vidiella-Salaberry Managing Director https://app.companiesoffice.govt.nz/companies/app/service/services/documents/4CDBDA6B03F7A861331D93432E682CB4

    Questions 9

    Ask a Question (You must login to ask a question)


    How do shareholders track the share price, and how does the value of a share get determined if a shareholder wishes to sell?

    Posted on 13-11-2020 by Alistair Ross

    Hi Alistair, thank you for your pledge!
    We are an unlisted company, so companies like us don’t have our share price visible on a public stock exchange. There is no pre-determined share price. If a shareholder was wanting to sell their shares, the conditions are detailed in the clause 16.2 of the shareholders agreement, which is in the documents attached to this campaign (under "Details"). Any further questions, please feel free to get back in touch.

    Answered on 13-11-2020 by Phytotecnia Limited


    Hi, What should I choose if I am not a new zealand citizen, but I live here in new zealand because and I do have a work visa?

    Posted on 15-11-2020 by Mary Grace Acuesta

    Hi Mary Grace,
    Sorry for not answering before, it has taken a while to find the answer to your question.
    You can pledge if you have a NZ visa. PledgeMe will ask you later for a copy of your overseas passport, and proof of your NZ address.
    Please contact us if you have further questions.

    :

    Answered on 16-11-2020 by Phytotecnia Limited


    Hi there, the process to sell shares seems quite complicated. Do you have any plans for public listing on NZX?
    Thanks Rosemary

    Posted on 20-11-2020 by Rosemary Mortimer

    Hi Rosemary, thank you very much for your question and your pledge.
    It is really difficult to know if we will list the company on NZX in the future. We can't rule out the possibility of public listing to raise funds but that is a decision that we will carefully make considering facts and information that, at the moment, we don't have.
    The sale of shares is regulated in our shareholders agreement (which is in the documents attached to this campaign, under "Details"). We believe that the Company has to facilitate the sale of shares and we are open to consider suitable mechanisms to do so.
    Any further questions, please feel free to get back in touch.

    Answered on 20-11-2020 by Phytotecnia Limited


    What is the minimum number of shares offered for an individual to invest?

    Posted on 20-11-2020 by Binil

    Hello,
    The minimum number of shares you can purchase is 500. The price of each share is NZD 1, so you can invest a minimum of NZD 500.
    Please contact us if you have further questions.

    Answered on 20-11-2020 by Phytotecnia Limited


    Hopefully this is ok to ask - How much funding did you manage to secure from Callaghan Innovation, and for what stage and purposes will it be used for specifically?

    Posted on 24-11-2020 by Edgar Angeles

    Hi Edgar, the question is perfectly fine.
    Phytotecnia was granted NZD 400.000 from Callaghan Innovation In October 2020. This amount is already being used to fund the activities of our research programme during this year and the first half of 2021.
    Callaghan Innovation made a thorough review of our research programme and financials before granting the loan. We are working with them on additional funding opportunities.
    Any further questions, please feel free to get back in touch.

    Answered on 24-11-2020 by Phytotecnia Limited


    Hi - Do you have any updates regarding the company's commercial production license? I believe (as stated) this was just pending location inspection (security)? It would also be good to know some details re the security of the property/location as I think this is an important consideration for people in making decisions to pledge. If this information cannot be shared, that's perfectly ok. Thank you. Cheers - Edgar

    Posted on 27-11-2020 by Edgar Angeles

    Hi Edgar,
    You are right, the commercial licence is just pending a location inspection. The Ministry of Health has scheduled the inspection for the beginning of December, we already have the date. The Medicinal Cannabis Agency will check that adequate security arrangements are in place.
    In the licence application, the applicant must include details of the security arrangements in place to minimise the risk of cannabis and cannabis products being diverted to illicit use. The applicant must describe in detail the arrangements for physical measures and operational procedures relating to security at the location.
    The Agency has completed the desktop assessment of our security arrangements and during the onsite inspection they will verify that appropriate security arrangements are in place and operational.
    For obvious reasons we cannot make public the details of our security plan but if you would like to learn more about the security requirements, you could visit
    https://www.health.govt.nz/our-work/regulation-health-and-disability-system/medicinal-cannabis-agency
    Thanks again for your question.

    Answered on 27-11-2020 by Phytotecnia Limited


    Who owns the results of the research, know-how,licences and income from royalties etc.? Are these included as part of the Phytotecnia share offer?

    Posted on 28-11-2020 by Charlie Strivens

    Hi Charlie, thank you for your question.

    As we stated in our Information Memorandum, there are many variables that influence the yield and quality of raw flower and also the yield and quality of dried flower and extracts. These variables have been very little studied and scientific applied research is needed to understand the influence of each variable and their interactions. Moreover, since the production process, particularly the cultivation stage, is heavily affected by local factors, the research has to include those local parameters. Therefore, we understand that the only way to optimise production is through systematic and on site research. This research could result in intellectual property in the form of know-how, licences, etc. When Phytotecnia partners with other research institutions, the ownership of the results of the research is negotiated and could be shared. When Phytotecnia carries out research without partnerships, the results of this research belong exclusively to Phytotecnia. The same is valid for the royalties that could come from new varieties.

    The funding obtained from Callaghan Innovation is completely free from any obligation of Phytotecnia to share any intellectual property derived from research.

    We would like to make it very clear that there is no intermediate legal structure or entity that will own any research results. Phytotecnia is completely transparent and our legal structure doesn’t include nominee companies or any other intermediate entities. The reason to not include possible revenue coming from research activities in the financials is the difficulty to make a meaningful and not misleading estimation, but research can be a medium- long-term source of significant revenue.

    In short, the results of research are definitively included as part of Phytotecnia’s share offer.

    Please contact us if you have further questions.

    Answered on 28-11-2020 by Phytotecnia Limited


    Hello Irene and Alvaro

    Firstly, thanks for offering up this exciting venture. I’m interested in investing and have some queries.

    • Do either of you have pre-exisiting non-compete contracts from your recent work in this field?

    • Can you clarify repayment schedules for both the Callahan (400K) and Govt (13.6K) loans and how are these factored into your financial projections?

    • At what stage are your discussions with pharmaceutical manufacturers / wholesale buyers: are there any concrete opportunities to sell the product that you're forecasting to commercialise this year?

    • Can you offer further clarification on the composition of the Board relating to the following concerns:

    While I’m hopeful that you raise the full 2 Million, assuming the Pledgeme campaign raises 1 Million or less it seems Pledgeme investors would not have the collective equity (15% as per the shareholder agreement) to appoint a representative to a Board that would consist of yourselves and your family and friends.

    Unless I’ve missed it within the documentation there's no stipulation that there must be a Pledgeme investor representative on the Board?

    My concern with this is how such a Board would adequately protect the equity of Pledgeme investors - of specific concern are Shareholder Agreement clauses 14.2.1 and 14.2.2 which would seem to provide the Board with means to issue up to 20% shares every 12 months to directors, friends and family etc. Which could, theoretically, dilute the Pledgeme investor’s shareholdings?

    Should there not be a mandatory inclusion of Pledgeme investor representative on the Board? It would also seem necessary to include a provision requiring the substitution of any Pledgeme investor Board representative who might benefit from any share issue, either personally or indirectly via a family trust or some other entity with which they’re peripherally involved in. Or perhaps there is a simpler solution that would adequately protect the Pledgeme Shareholder’s equity?

    Apologies in advance if I’ve missed answers to these concerns within the documentation and look forward to your comments.

    Thanks and Best,
    Summer

    Posted on 07-01-2021 by Summer

    Hello Summer,

    Thank you very much for your interest. We will try to answer your questions as clearly as we can so you can make an informed decision about investing in Phytotecnia.

    To start from the beginning, we don’t have any restraint of trade, in fact, we have an excellent relationship with our previous employers and have been congratulated publicly for our progress by co-founder (and chair of the New Zealand Medical Cannabis Council) Manu Caddie. It couldn’t be any other way since we share their original values.

    The repayment of the Callaghan loan is included in the line “Current and term liabilities” in pages 21 and 22 of the Information Memorandum. The repayment of the Government loan will happen during Q2 2021 to not to incur into interest costs. So, yes, these loans have been factored into the financial projections.

    We welcome very much your question about the stage we are at regarding the commercialisation of our first products. This gives us the opportunity to explain Phytotecnia’s position in relation to this matter. Currently there are no NZ cultivated and produced finished medicinal cannabis products on the market. The compliance requirements to place a finished product on the market are very restrictive and it will take some time to have them available. It is not easy to estimate with enough accuracy the specifications, the price, the quantity, and the time when these products will be available. In these circumstances no serious buyer would sign a binding sale and purchase agreement. Some companies sign memorandums of understanding with potential buyers, which are non-binding contracts that too many times are done for other interests (like raising capital) rather than genuinely for selling the product. We are quite reluctant to enter this game and, instead, are in active conversations with potential buyers that understand the current status of the industry and are looking for raw flower for research or for developing their GMP certification for finished products. As soon as we can answer with certainty the questions regarding specifications, pricing, quantity, and timing, we will be in the position to sign the corresponding contracts. We are very pleased that you have used the term “concrete opportunities to sell the product” instead of “memorandums of understanding” or “contracts” to understand at what stage we are regarding the commercialisation of our first products because we can answer yes, we have concrete opportunities.

    The governance of Phytotecnia is another crucial matter that differentiates us from other competitors. Phytotecnia is governed by science, expertise, common sense, and by the commitment to its purpose and to its shareholders, currently through us (Irene and Álvaro) with the collaboration of a range of experts in different fields. Again, we are not keen to participate in the game of putting together a board of names with no real added value other than to make certain projects with questionable substance more attractive to investors. We believe that the best way to protect the interests of the shareholders is to maximise the return on their investment. We are natural collaborators and are absolutely open to include new directors in the board, provided the Company is managed as lean and agile as is now, and they bring real added value. We have no doubt that this will happen in the relatively near future. Besides, consider that the minimum 15% of shareholding gives the indisputable right to appoint a director but it is not a condition to appoint a Director.

    Phytotecnia is treating PledgeMe investors the same way as is treating existing investors. When we started the crowdfunding process we decided not to create a nominee company to group the PledgeMe shareholders. We believe that all shareholders should have shares directly in Phytotecnia rather than in a nominee company. Although there is an investment threshold over which voting rights are attached to the shares, this is purely for management purposes. We see many advantages in the cooperative type business models and are very keen to listen to all of our shareholders independent of their voting rights or the amount invested. We have not divided PledgeMe shareholders in different categories (bronze, silver, gold; seedling, clone, flower, harvest, etc), in correspondence with the amount invested, since we believe that the value of the shareholders is not restricted to the amount invested. As we have already mentioned in our updates, PledgeMe investors conform a varied group of people with different interests and motivations to invest in Phytotecnia. Their common interest is to maximise the return on their investment, which is the same interest of the current investors, including the directors. For your peace of mind, we have many friends (old and new) among the PledgeMe investors, and even family (our son bought 600 shares!).

    Regarding clauses 14.2.1 and 14.2.2 of the Shareholders Agreement which provide the board with means to issue up to 20% of shares every 12 months waving the pre-emptive rights, they are only for the benefit of the Company, to make the decision process pragmatic and agile in case the share issue is required. For us, to interpret these clauses as a potential mechanism for the appropriation of the Company by directors, friends and family is completely out of place. As in any other context, a contract, in this case the Shareholders Agreement, can be interpreted and used in many different ways no matter how many provisions are included. At the end of the day, the use of a contract will depend on the honesty and values of the people interpreting it. We have valued the Company way below what other companies have done in worse circumstances (and way below the valuation made by BDO, see page 23 of the IM); we are offering 25% of the Company, which is a considerably bigger proportion compared to current practice; and we have not put any structure in place to deviate the benefits from research and intellectual property to other companies. These practices are some examples that illustrate our style, ultimately it is the potential investors’ role to judge and decide if they feel comfortable participating in a project like this.

    Please contact us if you have further questions.

    Kind regards,
    Irene and Álvaro

    Answered on 09-01-2021 by Phytotecnia Limited


    How and when would shareholder dividends be paid, once Phytotechnia is making a profit?

    Posted on 24-01-2021 by Michelle Meads

    Hello Michelle,

    Thank you for your question, for your pledge and for your nice message :)

    In case you still have not had the chance to see it, you can find the information that you ask for in page 25 of our Information Memorandum:
    "Once the Company is profitable, you could receive an annual payment based on the Company’s profit. We expect to reinvest in the business any potential profit for the first years to consolidate the Company. Once the Company is consolidated, part of the profit will be distributed to all shareholders as dividends, as determined by the Company’s board of directors".

    Please let us know if you have any further questions.

    Kind regards
    Irene and Álvaro

    Answered on 25-01-2021 by Phytotecnia Limited

    Pledgers 245

    Lee
    2020-12-15 12:23:02 +1300

    "🌱💚"

    Cheryl Hallett
    2020-12-15 12:21:05 +1300
    Tina
    2020-12-15 12:15:59 +1300
    Chris Hooker
    2020-12-15 12:12:12 +1300
    Diana Walker
    2020-12-15 12:08:16 +1300
    Nicole Hibbert
    2020-12-15 10:22:26 +1300

    "What goes around comes around. This pledge is made on behalf of my children, we believe in Phytotecnia, making our world as it once was."

    Matthew Ineson
    2020-12-14 22:17:06 +1300
    Michelle Vui
    2020-12-14 20:24:16 +1300
    Stephen Cohn
    2020-12-14 14:15:07 +1300
    Sofia Zerboni West
    2020-12-14 12:50:50 +1300
    Pip Dean
    2020-12-14 10:58:33 +1300

    "For every human illness, there exists a plant which is the cure - Rudolf Steiner"

    Sylvia Allison McHugo
    2020-12-14 08:19:38 +1300
    Trax Rentals Ltd
    2020-12-13 21:57:19 +1300
    Sam Moyle
    2020-12-13 21:11:17 +1300
    Soraya
    2020-12-13 20:45:48 +1300
    Amber
    2020-12-13 20:34:49 +1300
    Wendy Fraser
    2020-12-13 19:46:15 +1300
    sumesh pokhrel
    2020-12-13 12:28:41 +1300

    "All the best ..."

    AlexR
    2020-12-12 21:22:13 +1300
    Nicole Hibbert
    2020-12-12 09:57:05 +1300

    "Everything in life happens as and when it should. We exist for the benefit of others, not ourselves. Phytotecnia Ltd's ethos means just that"

    Dyllan Huss
    2020-12-12 09:41:58 +1300
    Erin Cheng
    2020-12-11 19:03:37 +1300
    michal
    2020-12-11 18:16:26 +1300
    Lynne Killick
    2020-12-11 17:22:53 +1300
    Daniel Ebbett
    2020-12-11 14:52:45 +1300
    Alastair & Chris Bridge
    2020-12-11 13:25:36 +1300
    Justine Pritchard
    2020-12-11 10:42:22 +1300
    Nigel A Pritchard
    2020-12-11 10:31:39 +1300
    James McIntyre
    2020-12-11 05:29:00 +1300

    "Congrats!"

    Fraser Imrie
    2020-12-10 23:32:08 +1300

    Phytotecnia Limited

    If you believe in the potential of medicinal cannabis and value a down to earth business approach based in science and expertise, Phytotecnia might be of interest.

    With our own resources and thanks to the huge support of family and friends, our project is well underway and has met all the milestones on time and budget. We are now about to start the first commercial production cycle and we would like to maximise our production capacity.


    Letter from the founders

    Medicinal cannabis came to us naturally three years ago looking for our expertise. Initially sceptical about the potential of cannabis as a medicine, we soon became completely convinced about its possibilities. At the same time we realised the enormous challenges that a business in this industry would face: lack of scientific knowledge in basic areas of cultivation and manufacturing; emerging markets with evolving demands; and fast developing and diverse regulatory frameworks. In this context, we believe that the only possible approach to succeed in the industry is a learner’s approach: understand and acknowledge the complexity of the medicinal cannabis industry and develop a business model based on expertise, hard work, and patience.

    Our approach avoids speculation and misleading information and acknowledges the legacy of those that have been working with cannabis, frequently underground, for many years.

    With our own resources and thanks to the huge support of family and friends, our project is well underway and has met all the milestones on time and budget. We are now about to start the first commercial production cycle and we would like to maximise our production capacity.

    If you have the patience and interest to read our Information Memorandum, you’ll see that this is not just another medicinal cannabis company. We have a different approach that might not be extremely attractive for conventional investors looking for rapid profits based on purely speculative forecasts. We are convinced that our approach based on science and facts, on expertise, hard work and patience, is not incompatible with high profitability, on the contrary, we believe it is the only way to succeed in the long term.

    We humbly believe that Phytotecnia will be really profitable for many people in many ways. Hopefully you will reach the same conclusion after reading this information memorandum and want to join us.


    Our Team

    Phytotecnia was founded by us, Irene López-Ubiria and Álvaro Vidiella-Salaberry, in 2019. We are agricultural engineers with a doctorate and a masters degree in horticulture, and more than 20 years of experience in applied research and production. Originally from Spain, our nine years in NZ have seen us working as part of the leadership teams of NZ Avocado, Riversun Nursery, and Hikurangi Cannabis Company (now RUA Bioscience). In our roles, we have successfully managed multidisciplinary teams of experts to achieve the goals of each company. We are used to working in highly competitive commercial environments with complex production systems and evolving market demands.


    What have we done so far?

    Phytotecnia obtained a licence to cultivate cannabis for research purposes in February 2020. We will start commercial production as soon as we are granted the corresponding licence which is just pending a location inspection in the coming weeks.

    We have built a dual-purpose research and production glasshouse and two indoor growing chambers, designed to produce conservatively 30 kg of medicinal cannabis dried flower monthly all year round.

    phytotechnica_premises_and_progress
    Pictured: Phytotecnia founders Irene López-Ubiria and Álvaro Vidiella-Salaberry

    The research programme is underway. We have established strategic relationships with research entities in New Zealand and internationally in the areas of breeding and cultivation. Seeds of selected varieties have already been obtained to form the core of our breeding programme. Different cultivation parameters are being studied. We have secured funding from Callaghan Innovation to carry out our research programme during 2020-2021. We are characterising and selecting the elite lines to become the first mother plants for our commercial production. We will start the commercial production as soon as we are granted the corresponding licence which is expected in the next weeks.


    What's Next?

    We will start producing dried flower, and once GMP certification is obtained, we will include extracts in our product portfolio. We will in parallel advance in our research programme optimising the production system, and in characterising and selecting our breeding lines so we can offer dried flower and extracts with different therapeutic properties produced from varieties adapted to commercial cultivation and manufacturing environments.


    What are the risks/challenges our company faces?

    In our Information Memorandum we have included a list of the main risks that Phytotecnia will face and how we mitigate them. We have focused on the risks inherent to a new company in the cannabis industry that can have a significant impact on its performance or viability.


    A Note from PledgeMe

    We have completed a Veda check on the company and its Directors, as well as Google checks. 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.

     

    New media coverage

    12/01/2021 at 5:11 PM

     

    Kia ora koutou,

    We hope you had a very nice break and that the New Year will bring you good things.

    Although this year Christmas did not come with holidays for us, we have enjoyed a quiet-work sort of break, and a bit of the feeling of the ant in The Ant and The Cicada fable. Do not get us wrong, we love the artist nature of the cicada and the fable's ambivalent meaning. 

    Having the commercial licence, we have no restrictions related to the number of plants that we can cultivate and the number and type of varieties that we can import, and we are hands on working on the new seed import licences. We are also working on the equipment of the glasshouse and are waiting in anticipation the new growing lights and other technical equipment that will arrive soon.

    Some local newspapers and other media have expressed their interest in updating their audiences on our progress. We are really happy to see that Phytotecnia is of interest to many people. Today we are very pleased to be featured by Brent Melville in BusinessDesk: Phytotecnia's big play into cannabis is baby steps.

    Phytotecnia’s strategy to reach the people that might be interested in participating in our project has been based on an informative style of publicity rather than on advertisements disguised as news. This informative style of the treatment of Phytotecnia in the news has had an important impact on our PledgeMe campaign. The success in attracting investors of our low-key approach is very reassuring.

    Phytotecnia’s new coverage in the press will give us the chance to access more people potentially interested in being part of our project, however, please do not forget to spread the word.

    Kind regards

     

    Irene and Álvaro

    Christmas update

    23/12/2020 at 2:37 PM

    Kia ora koutou,

    Since yesterday we can officially say that Phytotecnia is licensed to cultivate cannabis for commercial purposes. This is the culmination of a great effort and the result of the collaboration of many people. When we were already assuming that the licence document would be issued after the Christmas break, yesterday we received a text message from the officer that performed the site inspection: “I have a Christmas present for you. Please check your inbox”. What a special present!

    The text message reflects very well why we are here in New Zealand, and why this is probably one of the best countries to be working at with medicinal cannabis (to be fair, we could have also left the sentence as "this is probably one of the best countries to be" considering the privileged situation of our country in the current state of the world). Although there is still work to do educating some people about medicinal cannabis and finetuning the implementation of the regulatory framework, the general attitude, particularly of the public administration, is very positive. While working in 2018 to obtain the first licence to cultivate cannabis in New Zealand (back then for research purposes), and while importing the first legal cannabis seeds in the country, the relationship with the Ministry of Health was impeccable as it has been during the recent process to obtain the commercial licence for Phytotecnia. The Medicinal Cannabis Agency has been collaborative and reasonably flexible to open the interpretation of the regulations, which couldn’t be any other way given the learning stage that we all are going through.

    Work at Te Horo is progressing as planned. On Monday the much-expected water tanks arrived, which has been quite a mission because of the country-wide shortage of tanks due to the recent draughts. We are really lucky that the Te Horo site has access to plenty of water, although we are very conscious of the value of this scarce resource and will be collecting all the water coming from the roof of the glasshouse and implementing water saving irrigation technics. We are also progressing with the works related to the power supply.

    The plants are looking healthy and strong and ready to be cloned. They seem to know that, with the licence ready, they can now move to the glasshouse and receive some natural light!

    The crowdfunding is now slow as expected at this time of the year. Time to rest, recapitulate and focus on the new year.

    We wish you a very nice Christmas.

    Irene and Álvaro

    Extension

    15/12/2020 at 7:22 PM

    Kia ora koutou,

    This was supposed to be the last update regarding our PledgeMe campaign. We are really pleased with the response to Phytotecnia’s share offer, as we have already said, not only for the amount raised but for the quality of the investors. We are conscious that this has not been a conventional PledgeMe equity crowdfunding campaign and we feel extremely satisfied with what we have achieved.

    We were going to write an enormous THANK YOU update and enter another dimension… but yesterday we were about to finish our day when our contact person in PledgeMe (by the way, the first person to invest through the campaign, which was the first of the series of very nice surprises that we have received along these weeks) offered us the possibility to extend the campaign… What a poisoned chalice…:)

    These last hours we have been thinking on how to proceed. Phytotecnia is a slow cooking project rather than a takeaway product. When we introduce the company to new people, explaining the context, the opportunity and the idea requires time and patience. Many of the investors have carefully read all the information and understand the business model and style. Others know the project first-hand because they have been working with us. We decided to not to work with a public relations agency since, after trial and error, we observed that the message was being standardised and denaturalised. We have not certainly reached the masses, but we have written and transmitted our messages ourselves, sometimes better, sometimes worse, but with honesty. We believe that there might be people out there that could still be worth trying to reach. We have a steady flow of support and, we have concluded that we will keep the campaign open until mid-January, as much as it is tempting to finish it tomorrow and move on to another stage.

    We would like to reassure you that this extension will not impact the timeline of the project, since we will keep on working during this period. We are planning another round of sowing imminently and we will also make clones of selected mother plants. We will continue to update you on the progress of the project.

    We apologise for the last-minute change, particularly to those that have been rushing to meet the deadline.

    With gratitude,
    Irene and Álvaro

    Note: For those of you that have already ivested, PledgeMe will not ask you to pay for your shares until the campaign is over in January. 

    Last Sunday update

    13/12/2020 at 5:09 PM

    Kia ora koutou,

       Yesterday we reached 700k. This amount is of extraordinary significance.

       The capital raised allows Phytotecnia to meet its goals. We will need to be wise and creative but that has never been a problem for us. We couldn’t be in a better position. With our company’s mix of independence and leanness, and the support of the shareholders we can move with flexibility and fast. We feel confident. Phytotecnia’s business approach and the technical implementation of the project are very different compared to other medicinal cannabis companies in New Zealand, and having the support of the Ministry of Health and Callaghan Innovation among others, is extremely reassuring and rewarding.

       The above feels good, but yesterday we also realised again how important our project can be for many people. We welcomed to the company a woman, a mother with a powerful story, with a huge desire to support the legal production of medicinal cannabis. Her generosity and humbleness were overwhelming and made us feel absolutely honoured to have her as a shareholder (she really made our day). Her investment made us reach the 700k mark an this is why this number is so significant for us.

       We are close to the end of this crowdfunding journey. To be honest, we are looking forward to finish this chapter and focus completely on what really matters. On Friday, the people from Electra finished the works for the power lines and installed the super transformer, and now we have power! We have been using a generator and are very happy to enjoy the silence of the place again. Everything is getting aligned to start the commercial production and we cannot wait for that moment.

       We will not be bothering you with this request much more but please, if you know someone that could be interested in this project, let them know where they can find us. There is no time for procrastination and the opportunity is worth it.

     Ngā mihi,
     Irene and Álvaro
     

    This is our new super tranformer. It does not look very impressive, but it will feed the current glasshouse and the next one. Thank you very much Henk! We really appreciate the hard times you had to go through and your hard work.

    Thursday update

    10/12/2020 at 10:53 AM

    Kia ora koutou,

    Here comes the update that we were waiting for… Yesterday we passed nicely the MoH site inspection to get the commercial licence!

    Following thorough planning, intense work and last-minute rushes we got there, and now we are just waiting for the bureaucratic process to receive the licence document. The successful result of almost three hours of detailed inspection of the implementation of our security plan and of our production processes confirm the solidness of Phytotecnia.

    During the inspection, we had the feeling that we were backed by a numerous group of people that believe in this project, and this gave as an extra amount of confidence and reassurance. These are intangible things with a real effect. Thank you all.

    With the licence around the corner, Phytotecnia is now stronger. It is more attractive and has definitely more value. We are now approaching the end of the crowdfunding campaign and the end of this very particular opportunity, let’s give it the last big push!

    With kind regards,
    Irene and Álvaro
     

    Friday update

    04/12/2020 at 5:44 PM

    Kia ora koutou,

    We are ending this week exhausted but very happy. After many days of hard work to get everything ready for the site inspection next week (the final step to get the commercial licence), yesterday was a wonderful day for us and for the people that believe in the potential of medicinal cannabis.

    Yesterday, the United Nations (UN), following the recommendation from the World Health Organisation (WHO), removed cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs, a list of narcotics with very little or no therapeutic value like heroin. This means that the UN finally recognises the medicinal value of cannabis. Many more countries will now regulate the medicinal use of cannabis. Among other, all the European Union countries voted in favor of the removal except for Hungary. This is extremely good news for many people with different medical conditions that are desperately waiting for legal access to medicinal cannabis.

    And… we reached the minimum threshold of NZD 500.000! We are enormously grateful for all the support that our project is receiving. Some of you have left very nice messages that feel like a caress in the midst of this intense journey. Phytotecnia now belongs to a very diverse group of shareholders that are adding an incredible value that goes far beyond the value of their shares. We feel the weight of the responsibility but also the strength that the new shareholders are transmitting.

    We have passed the equator of the crowdfunding campaign and are getting closer to the end of this opportunity to participate in a very particular journey, spread the word!

    Kind regards

    Irene and Alvaro

    You need to pledge to see this update.

      Offer Details

      Current Valuation 6,000,000
      Raise Minimum 500,000
      Raise Maximum 2,000,000
      Share Price 1.00
      Maximum Shares Offered 2,000,000
      Explanation of valuation:

      To value our Company is something that makes us feel quite awkward. To make a valuation based on enterprise values of comparative players that do not have a record of performance, in an industry that is just starting, does not make much sense. Without a record of performance, these enterprise values are based on forecasts made by the companies themselves, estimating their own capability to perform. However, we understand that we need to value our Company to determine the price of the shares that we are offering.

      In November 2019, BDO estimated a post-money valuation for Phytotecnia between NZD 10 M and NZD 20 M, based on our business plan and on enterprise values of other New Zealand medicinal cannabis companies when raising capital. Back then we did not have the licence to grow cannabis for research purposes, the glasshouse that currently is finished was only a plan and the Medicinal Cannabis Scheme by the Ministry of Health was not approved yet.

      Considering the above and being true to our philosophy of avoiding speculation and being real and honest, we have concluded that a pre-money valuation of NZD 6 M is a fair value.

      Financial Summary

      Prev Year Current Year Est. FY 2022 Est. FY 2023
      Revenue NZ $25,775 NZ $1,394,000 NZ $4,717,500 NZ $5,610,000
      Operating Expenses NZ $530,404 NZ $1,079,095 NZ $1,415,217 NZ $2,361,800
      EBITDA -NZ $504,629 NZ $314,905 NZ $3,302,283 NZ $3,248,200
      Net Profit -NZ $513,548 NZ $222,454 NZ $3,176,526 NZ $2,885,197

      Company Details

      Company Name: Phytotecnia Limited

      Company Number: 7735017

      Company Documents

      CertIncorporation_Phytotecnia.pdf

      (application/pdf, 587 KB, uploaded 12 November 2020)

      CompanyyExtract_Phytotecnia.pdf

      (application/pdf, 745 KB, uploaded 12 November 2020)

      Phytotecnia_Limited_-_Profit_and_Loss_-_October_2020.pdf

      (application/pdf, 27.7 KB, uploaded 12 November 2020)

      Phytotecnia_Limited_-_Balance_Sheet_-_October_2020.pdf

      (application/pdf, 28 KB, uploaded 12 November 2020)

      Constitution_Phytotecnia.pdf

      (application/pdf, 209 KB, uploaded 12 November 2020)

      Shareholders_Agreement_Phytotecnia.pdf

      (application/pdf, 407 KB, uploaded 12 November 2020)

      Phytotecnia_IM_121120_final.pdf

      (application/pdf, 2.06 MB, uploaded 12 November 2020)

      Director Details

      Name Role Profile URL Invested?
      Irene Lopez-Ubiria Managing Director https://app.companiesoffice.govt.nz/companies/app/service/services/documents/53D37201A087210BF080A2E1B55BB5CA
      Alvaro Vidiella-Salaberry Managing Director https://app.companiesoffice.govt.nz/companies/app/service/services/documents/4CDBDA6B03F7A861331D93432E682CB4

      Ask a Question (You must login to ask a question)


      How do shareholders track the share price, and how does the value of a share get determined if a shareholder wishes to sell?

      Posted on 13-11-2020 by Alistair Ross

      Hi Alistair, thank you for your pledge!
      We are an unlisted company, so companies like us don’t have our share price visible on a public stock exchange. There is no pre-determined share price. If a shareholder was wanting to sell their shares, the conditions are detailed in the clause 16.2 of the shareholders agreement, which is in the documents attached to this campaign (under "Details"). Any further questions, please feel free to get back in touch.

      Answered on 13-11-2020 by Phytotecnia Limited


      Hi, What should I choose if I am not a new zealand citizen, but I live here in new zealand because and I do have a work visa?

      Posted on 15-11-2020 by Mary Grace Acuesta

      Hi Mary Grace,
      Sorry for not answering before, it has taken a while to find the answer to your question.
      You can pledge if you have a NZ visa. PledgeMe will ask you later for a copy of your overseas passport, and proof of your NZ address.
      Please contact us if you have further questions.

      :

      Answered on 16-11-2020 by Phytotecnia Limited


      Hi there, the process to sell shares seems quite complicated. Do you have any plans for public listing on NZX?
      Thanks Rosemary

      Posted on 20-11-2020 by Rosemary Mortimer

      Hi Rosemary, thank you very much for your question and your pledge.
      It is really difficult to know if we will list the company on NZX in the future. We can't rule out the possibility of public listing to raise funds but that is a decision that we will carefully make considering facts and information that, at the moment, we don't have.
      The sale of shares is regulated in our shareholders agreement (which is in the documents attached to this campaign, under "Details"). We believe that the Company has to facilitate the sale of shares and we are open to consider suitable mechanisms to do so.
      Any further questions, please feel free to get back in touch.

      Answered on 20-11-2020 by Phytotecnia Limited


      What is the minimum number of shares offered for an individual to invest?

      Posted on 20-11-2020 by Binil

      Hello,
      The minimum number of shares you can purchase is 500. The price of each share is NZD 1, so you can invest a minimum of NZD 500.
      Please contact us if you have further questions.

      Answered on 20-11-2020 by Phytotecnia Limited


      Hopefully this is ok to ask - How much funding did you manage to secure from Callaghan Innovation, and for what stage and purposes will it be used for specifically?

      Posted on 24-11-2020 by Edgar Angeles

      Hi Edgar, the question is perfectly fine.
      Phytotecnia was granted NZD 400.000 from Callaghan Innovation In October 2020. This amount is already being used to fund the activities of our research programme during this year and the first half of 2021.
      Callaghan Innovation made a thorough review of our research programme and financials before granting the loan. We are working with them on additional funding opportunities.
      Any further questions, please feel free to get back in touch.

      Answered on 24-11-2020 by Phytotecnia Limited


      Hi - Do you have any updates regarding the company's commercial production license? I believe (as stated) this was just pending location inspection (security)? It would also be good to know some details re the security of the property/location as I think this is an important consideration for people in making decisions to pledge. If this information cannot be shared, that's perfectly ok. Thank you. Cheers - Edgar

      Posted on 27-11-2020 by Edgar Angeles

      Hi Edgar,
      You are right, the commercial licence is just pending a location inspection. The Ministry of Health has scheduled the inspection for the beginning of December, we already have the date. The Medicinal Cannabis Agency will check that adequate security arrangements are in place.
      In the licence application, the applicant must include details of the security arrangements in place to minimise the risk of cannabis and cannabis products being diverted to illicit use. The applicant must describe in detail the arrangements for physical measures and operational procedures relating to security at the location.
      The Agency has completed the desktop assessment of our security arrangements and during the onsite inspection they will verify that appropriate security arrangements are in place and operational.
      For obvious reasons we cannot make public the details of our security plan but if you would like to learn more about the security requirements, you could visit
      https://www.health.govt.nz/our-work/regulation-health-and-disability-system/medicinal-cannabis-agency
      Thanks again for your question.

      Answered on 27-11-2020 by Phytotecnia Limited


      Who owns the results of the research, know-how,licences and income from royalties etc.? Are these included as part of the Phytotecnia share offer?

      Posted on 28-11-2020 by Charlie Strivens

      Hi Charlie, thank you for your question.

      As we stated in our Information Memorandum, there are many variables that influence the yield and quality of raw flower and also the yield and quality of dried flower and extracts. These variables have been very little studied and scientific applied research is needed to understand the influence of each variable and their interactions. Moreover, since the production process, particularly the cultivation stage, is heavily affected by local factors, the research has to include those local parameters. Therefore, we understand that the only way to optimise production is through systematic and on site research. This research could result in intellectual property in the form of know-how, licences, etc. When Phytotecnia partners with other research institutions, the ownership of the results of the research is negotiated and could be shared. When Phytotecnia carries out research without partnerships, the results of this research belong exclusively to Phytotecnia. The same is valid for the royalties that could come from new varieties.

      The funding obtained from Callaghan Innovation is completely free from any obligation of Phytotecnia to share any intellectual property derived from research.

      We would like to make it very clear that there is no intermediate legal structure or entity that will own any research results. Phytotecnia is completely transparent and our legal structure doesn’t include nominee companies or any other intermediate entities. The reason to not include possible revenue coming from research activities in the financials is the difficulty to make a meaningful and not misleading estimation, but research can be a medium- long-term source of significant revenue.

      In short, the results of research are definitively included as part of Phytotecnia’s share offer.

      Please contact us if you have further questions.

      Answered on 28-11-2020 by Phytotecnia Limited


      Hello Irene and Alvaro

      Firstly, thanks for offering up this exciting venture. I’m interested in investing and have some queries.

      • Do either of you have pre-exisiting non-compete contracts from your recent work in this field?

      • Can you clarify repayment schedules for both the Callahan (400K) and Govt (13.6K) loans and how are these factored into your financial projections?

      • At what stage are your discussions with pharmaceutical manufacturers / wholesale buyers: are there any concrete opportunities to sell the product that you're forecasting to commercialise this year?

      • Can you offer further clarification on the composition of the Board relating to the following concerns:

      While I’m hopeful that you raise the full 2 Million, assuming the Pledgeme campaign raises 1 Million or less it seems Pledgeme investors would not have the collective equity (15% as per the shareholder agreement) to appoint a representative to a Board that would consist of yourselves and your family and friends.

      Unless I’ve missed it within the documentation there's no stipulation that there must be a Pledgeme investor representative on the Board?

      My concern with this is how such a Board would adequately protect the equity of Pledgeme investors - of specific concern are Shareholder Agreement clauses 14.2.1 and 14.2.2 which would seem to provide the Board with means to issue up to 20% shares every 12 months to directors, friends and family etc. Which could, theoretically, dilute the Pledgeme investor’s shareholdings?

      Should there not be a mandatory inclusion of Pledgeme investor representative on the Board? It would also seem necessary to include a provision requiring the substitution of any Pledgeme investor Board representative who might benefit from any share issue, either personally or indirectly via a family trust or some other entity with which they’re peripherally involved in. Or perhaps there is a simpler solution that would adequately protect the Pledgeme Shareholder’s equity?

      Apologies in advance if I’ve missed answers to these concerns within the documentation and look forward to your comments.

      Thanks and Best,
      Summer

      Posted on 07-01-2021 by Summer

      Hello Summer,

      Thank you very much for your interest. We will try to answer your questions as clearly as we can so you can make an informed decision about investing in Phytotecnia.

      To start from the beginning, we don’t have any restraint of trade, in fact, we have an excellent relationship with our previous employers and have been congratulated publicly for our progress by co-founder (and chair of the New Zealand Medical Cannabis Council) Manu Caddie. It couldn’t be any other way since we share their original values.

      The repayment of the Callaghan loan is included in the line “Current and term liabilities” in pages 21 and 22 of the Information Memorandum. The repayment of the Government loan will happen during Q2 2021 to not to incur into interest costs. So, yes, these loans have been factored into the financial projections.

      We welcome very much your question about the stage we are at regarding the commercialisation of our first products. This gives us the opportunity to explain Phytotecnia’s position in relation to this matter. Currently there are no NZ cultivated and produced finished medicinal cannabis products on the market. The compliance requirements to place a finished product on the market are very restrictive and it will take some time to have them available. It is not easy to estimate with enough accuracy the specifications, the price, the quantity, and the time when these products will be available. In these circumstances no serious buyer would sign a binding sale and purchase agreement. Some companies sign memorandums of understanding with potential buyers, which are non-binding contracts that too many times are done for other interests (like raising capital) rather than genuinely for selling the product. We are quite reluctant to enter this game and, instead, are in active conversations with potential buyers that understand the current status of the industry and are looking for raw flower for research or for developing their GMP certification for finished products. As soon as we can answer with certainty the questions regarding specifications, pricing, quantity, and timing, we will be in the position to sign the corresponding contracts. We are very pleased that you have used the term “concrete opportunities to sell the product” instead of “memorandums of understanding” or “contracts” to understand at what stage we are regarding the commercialisation of our first products because we can answer yes, we have concrete opportunities.

      The governance of Phytotecnia is another crucial matter that differentiates us from other competitors. Phytotecnia is governed by science, expertise, common sense, and by the commitment to its purpose and to its shareholders, currently through us (Irene and Álvaro) with the collaboration of a range of experts in different fields. Again, we are not keen to participate in the game of putting together a board of names with no real added value other than to make certain projects with questionable substance more attractive to investors. We believe that the best way to protect the interests of the shareholders is to maximise the return on their investment. We are natural collaborators and are absolutely open to include new directors in the board, provided the Company is managed as lean and agile as is now, and they bring real added value. We have no doubt that this will happen in the relatively near future. Besides, consider that the minimum 15% of shareholding gives the indisputable right to appoint a director but it is not a condition to appoint a Director.

      Phytotecnia is treating PledgeMe investors the same way as is treating existing investors. When we started the crowdfunding process we decided not to create a nominee company to group the PledgeMe shareholders. We believe that all shareholders should have shares directly in Phytotecnia rather than in a nominee company. Although there is an investment threshold over which voting rights are attached to the shares, this is purely for management purposes. We see many advantages in the cooperative type business models and are very keen to listen to all of our shareholders independent of their voting rights or the amount invested. We have not divided PledgeMe shareholders in different categories (bronze, silver, gold; seedling, clone, flower, harvest, etc), in correspondence with the amount invested, since we believe that the value of the shareholders is not restricted to the amount invested. As we have already mentioned in our updates, PledgeMe investors conform a varied group of people with different interests and motivations to invest in Phytotecnia. Their common interest is to maximise the return on their investment, which is the same interest of the current investors, including the directors. For your peace of mind, we have many friends (old and new) among the PledgeMe investors, and even family (our son bought 600 shares!).

      Regarding clauses 14.2.1 and 14.2.2 of the Shareholders Agreement which provide the board with means to issue up to 20% of shares every 12 months waving the pre-emptive rights, they are only for the benefit of the Company, to make the decision process pragmatic and agile in case the share issue is required. For us, to interpret these clauses as a potential mechanism for the appropriation of the Company by directors, friends and family is completely out of place. As in any other context, a contract, in this case the Shareholders Agreement, can be interpreted and used in many different ways no matter how many provisions are included. At the end of the day, the use of a contract will depend on the honesty and values of the people interpreting it. We have valued the Company way below what other companies have done in worse circumstances (and way below the valuation made by BDO, see page 23 of the IM); we are offering 25% of the Company, which is a considerably bigger proportion compared to current practice; and we have not put any structure in place to deviate the benefits from research and intellectual property to other companies. These practices are some examples that illustrate our style, ultimately it is the potential investors’ role to judge and decide if they feel comfortable participating in a project like this.

      Please contact us if you have further questions.

      Kind regards,
      Irene and Álvaro

      Answered on 09-01-2021 by Phytotecnia Limited


      How and when would shareholder dividends be paid, once Phytotechnia is making a profit?

      Posted on 24-01-2021 by Michelle Meads

      Hello Michelle,

      Thank you for your question, for your pledge and for your nice message :)

      In case you still have not had the chance to see it, you can find the information that you ask for in page 25 of our Information Memorandum:
      "Once the Company is profitable, you could receive an annual payment based on the Company’s profit. We expect to reinvest in the business any potential profit for the first years to consolidate the Company. Once the Company is consolidated, part of the profit will be distributed to all shareholders as dividends, as determined by the Company’s board of directors".

      Please let us know if you have any further questions.

      Kind regards
      Irene and Álvaro

      Answered on 25-01-2021 by Phytotecnia Limited

      Lee
      2020-12-15 12:23:02 +1300

      "🌱💚"

      Cheryl Hallett
      2020-12-15 12:21:05 +1300
      Tina
      2020-12-15 12:15:59 +1300
      Chris Hooker
      2020-12-15 12:12:12 +1300
      Diana Walker
      2020-12-15 12:08:16 +1300
      Nicole Hibbert
      2020-12-15 10:22:26 +1300

      "What goes around comes around. This pledge is made on behalf of my children, we believe in Phytotecnia, making our world as it once was."

      Matthew Ineson
      2020-12-14 22:17:06 +1300
      Michelle Vui
      2020-12-14 20:24:16 +1300
      Stephen Cohn
      2020-12-14 14:15:07 +1300
      Sofia Zerboni West
      2020-12-14 12:50:50 +1300
      Pip Dean
      2020-12-14 10:58:33 +1300

      "For every human illness, there exists a plant which is the cure - Rudolf Steiner"

      Sylvia Allison McHugo
      2020-12-14 08:19:38 +1300
      Trax Rentals Ltd
      2020-12-13 21:57:19 +1300
      Sam Moyle
      2020-12-13 21:11:17 +1300
      Soraya
      2020-12-13 20:45:48 +1300
      Amber
      2020-12-13 20:34:49 +1300
      Wendy Fraser
      2020-12-13 19:46:15 +1300
      sumesh pokhrel
      2020-12-13 12:28:41 +1300

      "All the best ..."

      AlexR
      2020-12-12 21:22:13 +1300
      Nicole Hibbert
      2020-12-12 09:57:05 +1300

      "Everything in life happens as and when it should. We exist for the benefit of others, not ourselves. Phytotecnia Ltd's ethos means just that"

      Dyllan Huss
      2020-12-12 09:41:58 +1300
      Erin Cheng
      2020-12-11 19:03:37 +1300
      michal
      2020-12-11 18:16:26 +1300
      Lynne Killick
      2020-12-11 17:22:53 +1300
      Daniel Ebbett
      2020-12-11 14:52:45 +1300
      Alastair & Chris Bridge
      2020-12-11 13:25:36 +1300
      Justine Pritchard
      2020-12-11 10:42:22 +1300
      Nigel A Pritchard
      2020-12-11 10:31:39 +1300
      James McIntyre
      2020-12-11 05:29:00 +1300

      "Congrats!"

      Fraser Imrie
      2020-12-10 23:32:08 +1300
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