F-1: Akanda Pivots to Telecom, Raises $12M Amid Cannabis Exit

Akanda Corp. files an F-1 registration statement for the resale of up to 18.76 million common shares, following its acquisition of First Towers & Fiber Corp. and a $12 million convertible note offering, while discontinuing its UK cannabis operations.

Summary

• Akanda Corp. filed an F-1 registration statement for the resale of up to 18,761,062 common shares by selling stockholders, convertible from $12,000,000 in principal and interest from convertible promissory notes issued in a September 2025 offering, with a conversion price floor of $0.678 per share.
• The company recently acquired First Towers & Fiber Corp. on August 21, 2025, diversifying into tower development and a 700+km fiber optic network in Mexico.
• The First Towers acquisition involved issuing Class A Special Shares (19.9% of outstanding common shares post-closing) and Class B Special Shares (remaining shares, subject to shareholder approval) to First Towers shareholders, and assuming approximately $20 million of First Towers' indebtedness.
• Akanda prepaid approximately $6.5 million of the Consideration Note using proceeds from the September Offering.
• Akanda is discontinuing its UK cannabis operations (Canmart Ltd.) due to high costs, difficulty finding replacements for resigning directors, and ongoing lawsuits.
• Akanda reported a net loss of $4,096,029 for the year ended December 31, 2024, a significant improvement from a $32,275,070 net loss in 2023.
• Revenue increased to $836,664 in 2024 from $423,683 in 2023, primarily from Canmart.
• Cash used in operating activities increased to $3,980,365 in 2024 from $1,500,574 in 2023.
• The company raised approximately $11.5 million from public sales of securities between February and October 2024, and $2.0 million from the sale of RPK in April 2024.
• Akanda implemented a 1-for-3.125 reverse stock split on August 26, 2025.
• The company continues to develop a hemp and THC/CBD farming facility in Gabriola Island, British Columbia, having made initial option payments and a $750,000 milestone payment for a hemp license in September 2024.

Sentiment

Score: 6

Explanation: The company shows improved financial performance with a significantly reduced net loss and increased revenue from continuing operations, alongside a strategic pivot into a high-growth telecommunications sector through the First Towers acquisition. However, it remains an early-stage company with a history of losses, ongoing legal challenges, and a 'going concern' doubt, requiring substantial future financing and facing potential shareholder dilution from multiple reverse stock splits. The strategic shift is positive, but execution risks and financial instability persist.

Positives

• Net loss significantly decreased from $32,275,070 in 2023 to $4,096,029 in 2024.
• Revenue from continuing operations increased to $836,664 in 2024 from $423,683 in 2023.
• Successful acquisition of First Towers & Fiber Corp., diversifying the business into the telecommunications infrastructure market in Mexico.
• First Towers owns the largest 5G dark fiber optic network in Central Mexico and has 20-year master lease agreements.
• Successful capital raise of $12 million through convertible promissory notes in September 2025.
• Prepayment of approximately $6.5 million of the Consideration Note using proceeds from the September Offering.
• Obtained a hemp license from Health Canada in September 2024 for the British Columbia farming facility, triggering a $750,000 milestone payment.
• Regained compliance with Nasdaq's Stockholders Equity Requirement after raising approximately $11.5 million and selling RPK for $2.0 million.

Negatives

• Akanda is an early-stage company with limited operating history and minimal operating cash flow, not expecting material revenues in 2025 from its legacy cannabis business.
• The company's financial situation creates substantial doubt about its ability to continue as a going concern.
• Increased cash used in operating activities, from $1,500,574 in 2023 to $3,980,365 in 2024.
• Discontinuation of UK cannabis operations (Canmart Ltd.) due to unprofitability and legal exposure.
• Bophelo, an indirect wholly-owned subsidiary, is in liquidation proceedings in Lesotho since July 2022, with no assurance of reversing the determination or recovering significant loans.
• Ongoing legal proceedings with former executives (Shailesh Bhushan) claiming unpaid salary and damages, with potential for significant costs and diversion of management resources.
• The First Towers acquisition involved assuming approximately $20 million of indebtedness.
• The company has undergone multiple reverse stock splits (1-for-10 in March 2023, 1-for-40 in May 2024, 1-for-3.125 in August 2025) to maintain Nasdaq listing, indicating persistent low share price issues and potential for further dilution.
• The company is still pre-revenue for its British Columbia farming facility and cannot assure success in cultivating products.
• Significant accumulated deficit of $57,459,061 as of December 31, 2024.
• First Towers had a working capital deficit of $12,555,665 as of December 31, 2024.

Risks

• Limited operating history and may never become profitable, requiring additional funding.
• Financial situation creates doubt about continuing as a going concern.
• Insolvency proceedings of subsidiary Bophelo, with no assurance of reversal or loan recovery.
• Potential for increased litigation, which is expensive, time-consuming, and could harm reputation and financial condition.
• Market price of common stock will continue to fluctuate after the First Towers Transaction.
• Failure to attract, motivate, and retain executives and other key employees could diminish anticipated benefits of the First Towers Transaction.
• First Towers Transaction may cause business disruptions and divert management attention.
• Need for additional financing, which may not be available on reasonable terms or at all, leading to substantial dilution.
• Akanda's debt post-Transaction may limit financial flexibility.
• Uncertainty regarding declaration, payment, and amounts of future dividends.
• Dilution of existing shareholders by future issuance of Class A and Class B Special Shares.
• Demand for cannabis and its derivative products could be adversely affected by scientific research, regulatory proceedings, litigation, or media attention.
• Inability to enhance product offerings to respond to technological and regulatory changes.
• Exposure to product liability claims and product recalls in the cannabis business.
• Strong opposition to the cannabis and cannabinoid industries.
• Inherent risks of an agricultural business (crop disease, weather, pesticides, lack of crop insurance).
• Reliance on third-party suppliers, service providers, and distributors.
• Uncertainty of sales and promotional activities success and ability to sustain pricing model.
• Inability to effectively manage future growth.
• Significant competition in the cannabis industry.
• Conflicts of interest among directors and officers due to other business activities.
• Disease outbreaks or public health emergencies could adversely affect future operations.
• Security breaches or theft of products and equipment.
• Significant costs to defend intellectual property and other proprietary rights.
• Cyber-attacks or other privacy/data security incidents could disrupt operations, lead to data dissemination, and incur significant liability.
• Economic, political, regulatory, and other risks associated with international operations (Canada, Mexico).
• Political, social, and geopolitical conditions can adversely affect business (e.g., U.S. political uncertainty, tariffs).
• Unexpected exchange rate fluctuations, regulatory requirements, and other barriers for international sales.
• Tax risks in multiple jurisdictions, including challenges by tax authorities and potential PFIC status for U.S. federal income tax purposes.
• Risk of disruption from labor disputes and changes to labor laws.
• Cannabis regulatory regime is new and subject to rapid change, with evolving laws and enforcement.
• Risks associated with regulatory regime and permitting requirements for cannabis operations.
• Ongoing costs and obligations related to regulatory compliance.
• Lack of information about comparable companies in the nascent cannabis industry, making market size difficult to quantify.
• Marijuana remains illegal under U.S. federal law, and enforcement could change, posing a risk if operations expand into the U.S.
• First Towers has a limited operating history in an innovative sector with long-term commitments, leading to uncertainty about future earnings.
• First Towers is highly dependent on its management team, and loss of key personnel could harm its ability to implement strategies.
• First Towers' insurance may not adequately cover operating risks or be obtainable at economically viable rates.
• Changes in accounting standards and subjective assumptions could significantly affect financial results.
• Extreme market volatility, reduced liquidity, and credit availability may impact First Towers' growth and financial health.
• Increased costs and inflation may adversely affect First Towers' operations and anticipated revenue.
• Significant failure or deterioration in First Towers' dark fiber optic network and control systems.
• Design and manufacturing defects in First Towers' networks and services.
• First Towers will need to raise substantial additional funds in the future.
• Risks associated with climate change impacting First Towers' operations and infrastructure.
• Compliance with environmental, health, and safety laws and regulations for First Towers.
• Regulation and local municipal approvals for First Towers' networks and infrastructure.
• Infrastructure development and maintenance is a long, expensive, and uncertain process for First Towers.
• Rapid technological changes may adversely affect market acceptance of First Towers' networks and services.
• Competition from other telecommunications companies with greater resources for First Towers.
• If First Towers' services do not experience significant growth or achieve broad acceptance, anticipated growth may not be met.
• Risk of long-term contracts not being maintained for First Towers.
• First Towers may engage in transactions with affiliated businesses, involving potential conflicts of interest.
• Dependence on suppliers and service partners for parts and components in telecommunication infrastructure.
• Security breaches or unauthorized access to First Towers' customer data.
• Limited number of suppliers for certain components and services for First Towers.
• Strategic transactions by First Towers could be difficult to implement or disrupt business.
• Risk of unexpected technical failure due to unavailability of third-party information and infrastructure services for First Towers.
• Exposure to cyber-security incidents for First Towers.
• Difficulty for U.S. investors to enforce civil liabilities against Akanda due to Canadian incorporation and non-U.S. resident directors/officers.
• Future cash flow fluctuations may affect Akanda's ability to fund working capital.
• Dependence on management and key employees.
• Future sales and issuances of capital stock could result in additional dilution.
• Increased costs and management time devoted to public company compliance.
• Inability to maintain Nasdaq listing (past non-compliance with minimum bid price and shareholder equity requirements).
• Foreign private issuer status means less frequent and detailed reporting obligations, potentially less protection for U.S. shareholders.
• Loss of foreign private issuer status would increase costs.
• Share price volatility.
• No intention to pay dividends in the near future.
• Lack of analyst coverage could negatively affect share price.

Future Outlook

Akanda expects to require additional funding for its pre-revenue hemp and THC/CBD cultivation facility and for First Towers' operations. The company does not expect to generate material revenues in 2025 from its legacy cannabis business. First Towers anticipates needing to develop approximately 1,100 towers in Central America and notes Mexico's need for up to 50,000 new wireless towers. The dark fiber network market in Mexico is projected to grow at a CAGR of 10.8% from 2023 to 2030, with revenue increasing from $156 million in 2022 to $355 million by 2030.

Management Comments

• Management intends to finance operating costs over the next twelve months with its cash on hand, and/or additional cash that will be generated from operations.
• Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
• Management is unable to assess the likelihood that we would be successful in any trial with respect to ongoing matters.
• Management believes this transaction [First Towers RTO], combined with ongoing operational initiatives, will support the Companys ability to continue as a going concern.

Industry Context

Akanda is pivoting from a struggling medical cannabis market (discontinuing UK operations, Bophelo liquidation) to the telecommunications infrastructure market in Mexico and Latin America, which is described as an 'attractive wireless market' with 'national need for increased telecommunication infrastructure' and significant growth projections for dark fiber networks. The cannabis industry is characterized as nascent, highly competitive, and subject to evolving regulations and public perception.

Comparison to Industry Standards

• First Towers owns the largest 5G dark fiber optic network in Central Mexico.
• First Towers is a preferred partner in providing coverage to the rural regions of Mexico.
• First Towers has a veteran tower development team with 20+ years of experience in telecommunications infrastructure development.
• Latin America's fiber optic networks are two years behind other more developed countries, indicating a significant growth opportunity.
• Mexico needs to construct up to 50,000 new wireless towers to give at least 4G LTE coverage to 92% of its population.
• The dark fiber network market in Mexico is projected to grow at a CAGR of 10.8% from 2023 to 2030.
• First Towers differentiates itself by owning telecommunications equipment and towers and sharing in revenues with telecommunication companies leasing space, generating more revenue than traditional build-to-suit (BTS) contracts.
• Competitors in telecommunication towers include Centennial Towers, QMC, Torrecom, MX Towers, MTP, and American Tower.
• Competitors in fiber optic networks include Neutral Networks, Summit1G, National Fiber Networks, Fermaca Networks, and ICOM Construcciones.

Management Changes

Corporate Governance

Legal Proceedings

• Bophelo liquidation: Indirect wholly-owned subsidiary Bophelo was placed into liquidation by the High Court of Lesotho in July 2022, initiated by former Executive Chairman Louisa Mojela. Akanda intends to contest this and recover significant loans.
• Louisa Mojela claim: Filed a claim against Canmart and Akanda for wrongful termination ($1,832,150.62 plus fees). Akanda denied and counterclaimed for $6,849,935.69. Mojela's summary judgment application failed. Akanda and Canmart were awarded 60,000 in legal costs. Settled via confidential agreement for 100,000 ($129,705) on December 2, 2024.
• Tejinder Virk claim: Former CEO filed a claim for Detriment and dismissal ($1,630,302.22). Settled via confidential agreement for 30,000 on May 10, 2024.
• Trevor Scott claim: Former CFO filed a claim for amounts owing ($420,659.95). Settled via confidential agreement for 67,392.
• Vidya Iyer claim: Former SVP of Finance filed a claim for amounts owing ($151,774). Settled via confidential agreement for 30,000 on March 27, 2024.
• Shailesh Bhushan claims: Former CFO filed a complaint with the Employment Standards Branch of British Columbia for unpaid salary and invoices (CAD $271,990) and a Notice of Civil Claim in the Supreme Court of British Columbia alleging constructive dismissal and seeking damages. Akanda disputes the claims and denies common employer status with Halo. Proceeding is at the discovery stage.
• Dentons UK and Middle East LLP claim: Filed a debt claim against Canmart for legal services ($204,391.98 plus interest). Canmart denies outstanding invoices and has a counterclaim. Claim remains open.
• Dallas Dunkley claim: Filed a claim against Akanda for wrongful dismissal ($200,000 plus interest and costs) on September 10, 2024. Akanda denies employment status and intends to proceed to mediation.

Related Party Transactions

• First Towers Transaction: Christopher Cooper, a director, was co-founder, CEO, and director of First Towers. He and affiliates received Class A Special Shares (42,361) and are to receive Class B Special Shares (446,714) and 50,351 stock options. He recused himself from Akanda Board matters related to the transaction.
• Bridge Loan to First Towers: Akanda loaned $350,000 to First Towers (controlled by Christopher Cooper) on November 21, 2024, with 20% annual interest. Additional loans of $30,000, $170,000, and $200,000 were made in January, February, and April 2025, respectively.
• Loans from 1248787 B.C. Ltd. (controlled by Jatinder Dhaliwal, a director): CAD $24,000, CAD $3,000, and CAD $40,000 loans with 18% interest per annum, outstanding as of Dec 31, 2024.
• Loans from Halo (controlled by Katharyn Field, Interim CEO): Received additional loans of $1,192,953 in 2023 and $44,954 in 2024, with 7% interest. Fully repaid in 2024.
• Advances to Halo: Akanda paid and accrued $15,969 in legal fees for Halo, accounted as non-interest bearing, unsecured advances.
• Remuneration payable to key management: $244,933 as of Dec 31, 2024, including amounts owing to J. Dhaliwal ($8,000), G. Deol ($2,192), K. Field ($72,000), D. Jenkins ($160,241), and C. Cooper ($2,500).
• Debt settlement with Mr. Sidhu (former RPK director/officer, owner of Catalyst Capital LLC): Settled $487,295 in debt for $136,757, recognizing a gain of $353,159.
• Chrisco Management Inc. Loan (CAD $100,000): Loan to First Towers from a company controlled by a close family member of a senior officer of First Towers, bearing 12% interest (20% default rate), outstanding and in default as of Dec 31, 2024.
• Gia Resources Inc. Loan (CAD $40,000): Loan to First Towers from a company with a former director who was also a senior executive of First Towers, non-interest bearing, repayable on demand.

Stakeholder Impact

• Shareholders: Potential for significant dilution from future share issuances (Class B Special Shares, convertible notes), past reverse stock splits, and ongoing need for capital raises. Improved financial results and strategic pivot could positively impact long-term value, but short-term volatility and delisting risks remain.
• Employees: Discontinuation of UK operations led to cessation of full-time employees in Akanda's legacy business. Assumption of six employees from First Towers. Ongoing legal disputes with former executives could impact morale and company resources.
• Customers (First Towers): Continued development of telecommunications infrastructure in Mexico aims to meet growing demand for 5G and fiber networks, potentially improving service and coverage.
• Customers (Cannabis): Discontinuation of UK operations means no further supply from Canmart. Development of BC facility aims for future cannabis product offerings.
• Creditors: Assumption of significant debt from First Towers, but also prepayment of a large portion of the Consideration Note. Convertible notes introduce new debt obligations.
• Regulatory Bodies: Ongoing compliance requirements in Canada and Mexico, and past issues with Nasdaq listing standards.

Next Steps

• Hold a special meeting of shareholders (Second Shareholder Meeting) to obtain Nasdaq approval for the issuance of Common Shares underlying Class B Special Shares and certain promissory notes from First Towers.
• Continue to develop the Gabriola, B.C. site for THC and CBD cultivation.
• Seek additional payments for milestones achieved from the development of the Gabriola Island facility (THC cultivation, sales of product, CBD cultivation).
• First Towers intends to expand into other Latin American countries.
• First Towers anticipates developing approximately 1,100 towers in Central America under an existing agreement with Altan Redes and CFE.
• Akanda will file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering.

Key Dates

Recommendation

Akanda Corp. is undergoing a significant strategic transformation, pivoting from a struggling cannabis business to a promising telecommunications infrastructure venture in Mexico. The acquisition of First Towers and the recent $12 million capital raise are positive steps towards diversification and financial stability, reflected in the substantial reduction of net loss in 2024. However, the company remains an early-stage entity with a history of operational losses, a 'going concern' qualification, and ongoing legal challenges. The need for further capital, potential shareholder dilution from future share issuances, and the inherent risks of operating in a new, capital-intensive industry like telecom infrastructure, coupled with the continued challenges in its legacy cannabis segment, suggest a 'hold' recommendation. Investors should monitor the successful integration and scaling of First Towers' operations, the resolution of legal matters, and the company's ability to secure additional financing without excessive dilution before considering a stronger position.

Keywords

Akanda Corp, First Towers, telecommunications infrastructure, fiber optic network, Mexico, cannabis, hemp, THC, CBD, SEC filing, F-1, convertible notes, capital raise, reverse stock split, Nasdaq, corporate governance, risk management, financial reporting, M&A, international operations