Ann: December Quarterly Activity and Cashflow Report, page-2

29 January 201 6 MXC December 2015 - Quarterly Activity Report • Shareholders’ approve acquisition and change of company name to MGC Pharmaceuticals Ltd - expected to recommence trading under new code MXC on the ASX in February • First batch of the Ananda CBD cosmetic products being finalised, worth approximately AU$500,000 in gross sales revenues – MXC approaching first revenues and sales, to be generated in the March quarter • Initial run of Ananda CBD cosmetics increased from 7,500 units to 16,000 units due to increased demand - interest through Ananda joint venture partner channels and MXC’s own direct distribution network • New CBD based cosmetic and therapeutic product development continues, with skin care formulas completing first phase of testing, successfully demonstrating relief for Psoriatic skin conditions • Substantial progress of MGC Pharmaceutical’s Australian Strategy, headlined through the appointment of renowned Australian cardiologist and media commentator Dr Ross Walker, to the MXC Board • Execution of strategic collaboration agreement with Sydney University, work programs set to commence • Strategically positioned to accelerate path to commercialisation and significant first cashflows during 2016 MGC Pharmaceuticals Ltd (ASX: MXC or “the Company”) has today released its Appendix 5B Report for the three-month period to 31 December 2015 and is pleased to provide a review of the progress made during period. Corporate Update The process to complete the acquisition of MGC Pharmaceuticals group of companies was significantly advanced and key transactional milestones were completed during the December quarter, including the Company’s shareholders’ approval to complete the acquisition and change its name to MGC Pharmaceuticals Ltd on 16 November 2015, followed by the lodgement of the re-compliance prospectus Friday 18 December 2015. In late January the Board received the Conditional Reinstatement letter from the ASX and is currently completing the final compliance processes with the ASX, and will shortly be recommencing trading under the Company’s new ticker code MXC. Most importantly, since commencing the process of acquiring MGC Pharmaceuticals, the MGC team and operations have made significant progress on executing its business plan and steps towards first phase commercialisation of its medical cannabis based cosmetic and medical products, and first cannabidiol (CBD) resin production in Slovenia during mid-2016, and potentially in additional jurisdictions during the 2016 calendar year.