Creso Pharma Shares Tumbled On ASX On Placement Update By The Company

CPH

Creso Pharma Limited (ASX: CPH) is in the cannabis sector. The primary objective of the company is to deliver pharmaceutical expertise with a delivery of the highest quality products in the cannabis domain. The group is developing a presence in many markets and aims to offer a diverse portfolio of solutions across the globe. The products developed belong to categories ranging from Therapeutics, Animal health, nutraceuticals, topicals, and lifestyle.

Today (31 January 2019) the company announced that it has issued securities pursuant to the $3 million placement to institutional and sophisticated investors as announced on 24 January 2019. 

As per the announcement, the company has received $2,725,000 in placement funds till date and it has issued 6,055,556 fully paid ordinary shares in the capital of the company at $0.45 per share, together with one free attaching listed option ($0.80, 21 August 2020) for every three shares subscribed for under the placement. Further, the company expects to receive the remaining $275,000 going forward to complete the placement.

The funds raised through the placement of fully paid ordinary shares will be used to accelerate sales and marketing efforts of its human and animal products in Europe and Canada, and for repaying a portion of its debt and to fund the expenses of the placement as well.

The company as per its secondary trading notice in line with section 708A(5)(e) of the Corporations Act 2001 stated that the securities that are issued by the company on 31 January 2019 are part of a class of securities quoted on ASX and may be subject to a subsequent offer for sale. The company states that the securities have been issued to the investors however without any disclosure, under Part 6D.2 of the Act.

The company is in negotiations on two possible material transactions. The first transaction involves the spin out of Creso’s nutraceutical and other CBD assets into a new company to be listed on ASX (Newco), coupled with a material investment into Newco by a third party large international distribution company. The second transaction is, Creso acquiring of a European based health food and beverage business, with a possible subsequent listing on the NASDAQ.

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Now, let us have a quick look at Creso Pharma Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $0.425 and decreased significantly by almost 10.526% during the day’s trade, with a market capitalization of circa $58.99 million. The stock opened at $0.450 with its day high at the same price; however, the day’s low price touched $0.425. The stock has generated a negative YTD return of 12.04% and posted returns of -24.0%, 18.75%, -3.06% over the last six months and three months and one-month period respectively. It has a 52-week high price of $1.085 and a 52-week low of $0.335, with an average volume of 159,423 approximately.


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