Elixinol’s Big Shareholders Experienced A Fall In The Ownership After The Company Raised $40m Fund

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Elixinol Global Limited (EXL, Group or the Company) (ASX: EXL; OTCQX: ELLXF), on 24 September 2018 had advised the market that it would increase the ownership by 50.5% in the newly restructured hemp-derived cannabidiol (CBD), skincare business and hemp foods through its wholly owned subsidiary, EXL International Holdings. This would be named as Elixinol Japan which is subjected to various closing terms and conditions as well as the legal notice periods. EXL is now happy to make announcement that the investment done on Elixinol Japan is completed. The Group has funded approximately A$2.2 million as a strategic investment. The investment that was done was funded by the existing cash reserves of the Group. The Group will also provide support in terms of working capital in order to scale the Japanese business and meet the predicted growth in hemp-derived cannabidiol (CBD), skincare and hemp foods markets. As on 30 September 2018, the company held a pro forma cash balance of A$48.6m which is further broken down into A$10.7 million cash at bank and A$37.9m received from the net proceeds in the form of capital raising on 3 October 2018. The group made it clear that the details related to the operations of Elixinol Japan will be consolidated into future financial statements of the Group.  

The two biggest shareholders of hemp grower Elixinol Global observed their shareholdings getting diluted after the company’s recent $40 million capital raising. Amongst these shareholders one was the chief executive. After the company issued a new stock in the month of the September, Chief Paul Benhaim’s trading company Raw with Life experienced a fall in the ownership by 13%. The stake of Raw with Life fell from 76% to 63%.

The other company was also in line who experience a similar experience. It was D&G Health who was the US distributor of Elixinol’s cannabidiol (CBD) oil. It also experienced a downfall in its stake from 12.4% to 10.3%.

Elixinol in order to prepare for the expected authorization of hemp-derived CBD in the US has raised the cash from institutional and professional investors. They also provided cash to the company so that the company can launch medical cannabis operations in Australia.

The company has given a positive performance of 32.41% since its inception. In the 6 months of its journey the performance of the company is 16.72%. Based on the q3 of FY2018, the revenue of the company has gone up by 159% on prior corresponding year which is equivalent to $10.4 million. The company raised $40 million through placement in order to accelerate international growth. The total cash receipts from customer was $6.3 million and also received interest $0.1 million. Which resulted in the total cash inflow of $6.4 million. The total cash outflow was $6.8 million. The cash at the end of the period was $18.4.

Elixinol opened on Tuesday at $1.92. The closing price of the share got increased by 4.167% which is equivalent to was A$2 (AEST 4:00 pm). The market capitalization as on date was A$239.14 million and PE ratio of 1,600x.


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