Creso Pharma Limited (ASX: CPH) is in the cannabis industry working to deliver quality products to humans as well as for animals. The company is first to import cannabis for medical use into Australia. It is also first to launch innovative products into Switzerland like anibidiol which IS the first hemp CBD based complementary feed in animal health and cannaQIX, the first CBD nutraceutical in human health. The company is aiming to deliver its pharmaceutical expertise to develop the highest quality products in the cannabis space.
On 5th April 2019, the company responded to ASX’s aware query, referring to a letter received on 3rd April 2019.
The query was regarding the company’s stock price and volume movements in securities trading which appeared to be suspicious to the exchange.
The suspicious activity in securities trading took place just before a major announcement by the company regarding its “significant commercial progress across premium product categories” which was released on 2nd April 2019 and was marked as “sensitive” by the company. This information disclosed all the progress update of its commercialised product portfolio as well as new products in the development pipeline.
On 28th March 2019, the stock price closed at A$0.325 and closed at A$0.43 on 2nd April 2019. That’s a massive increase of more than 32% in just 4 trading sessions. With the increase in the price, the traded volume also surged exponentially. The volume of 28th March 2019 was around 110,621 whereas it shot up to 1,267,328 the next day and was recorded at 1,078,299 on 2nd April 2019.
The company replied to all the queries of ASX. The company denied to the question of whether the progress information is the information that could create a material effect on the price of its securities.
The company also justified its basis for this view, as requested by the ASX. It stated that while the information is material to investors, the information was previously disclosed to the ASX (in February as well as March); therefore, it is not a piece of new information that would have a material effect on the price.
ASX was also interested in knowing the time when the company first become aware of the Progress Information to which the company replied this progress information represents a market update of the Company for the year ended 31 December 2018 and since. This information was already disclosed when the company became aware of it, in the release of Appendix 4E Preliminary Financial Report.
The company also answered to a question concerning the company’s compliance in accordance with the listing rules and, in particular, Listing Rule 3.1, to which it replied positively.
On 24th January 2019, the company announced a $3 million Institutional placement.
On the technical front after this rally, the stock is settling down from its high levels and closed 4.4% down at A$0.435 as of 5th April 2019, compared to the previous closing of A$0.455. In the last six months, the stock has returned a negative return of 15.7%. However, over past one month the stock has soared by 18.18%.
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