Medical Cannabis Company, Creso Pharma Limited’s (ASX: CPH) securities were reinstated to official quotation today (12 February 2019), after the company made an announcement on 11 February 2019 in which it provided clarification regarding the potential transactions (as referred to in the cleansing statements of 31 January and 1 February 2019). After getting reinstated, the share price of the company is down by 8.434 percent in the intraday trade (AEST 2:24 PM).
Among the potential transactions, the first transaction is regarding the spin out of Creso’s nutraceutical and other CBD assets and the second transaction is regarding the acquisition by Creso of a European based health food and beverage business. The company’s securities were suspended since 4 February 2019 while the company was in consultation with the ASX in relation to the application of Chapter 11 (Significant Transactions) of the ASX Listing Rules.
Recently, the Company has confirmed that both the Potential Transactions are still in the preliminary negotiation phase. As per the company’s announcement, the terms and details of the Potential Transactions are currently incomplete and insufficiently definite to warrant disclosure or certainty. Accordingly, it is not possible to form a definitive view on whether the Potential Transactions would trigger the application of Chapter 11 of the ASX Listing Rules.
With regards to the potential transactions, the company has confirmed its first transaction which is a potential spin out of Creso’s nutraceutical and other CBD assets, is going to proceed. The company is going to seek shareholder approval pursuant to ASX Listing Rule 11.4 as a condition precedent to completion of the transaction.
With regards to the second transaction which is regarding the acquisition of a European based health food business, the company has informed that it is going to proceed with that transaction. The Company will first engage with ASX in respect of the application of ASX Listing Rule 11.1 and, if ASX were to consider that Listing Rule 11.1.3 was to apply, the transaction would not proceed.
The Company has confirmed that negotiations are continuing with regards to both transactions and it will continue to keep investors fully informed in accordance with the requirements of the ASX Listing Rules. Recently, the company created a Partnership with the National University of Colombia in Bogota, and it has signed Dr. Ricardo Salazar Lopez as Primary Medical Advisor who will focus on formulations targeted at specific ailments and leverage the National University to develop clinical evidence in support of all therapeutic products. During the December quarter, the company completed the acquisition of Kunna SAS Colombia which will allows Creso to significantly develop its key strategic foothold in Colombia.
During the December quarter, the company signed a binding Letter of Intent (LOI) with Medleaf Ltd for a partnership on building a comprehensive cannabis business in New Zealand and to expand the range of CBD-based medicinal cannabis products available to New Zealand consumers, having previously only had cannaQIX®50 available.
In the past six months, the share price of the company decreased by 34.65 Percent as on 1 February 2019. CPH’s shares traded at $0.380 with daily volume of ~657,586 as on 12 February 2019 (AEST 2:24 PM).
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