Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has secured firm commitments from institutional, professional and sophisticated investors to raise up to A$18 million through the issue of around 94.7 million new fully paid ordinary shares at A$0.19 per share.
The placement was heavily oversubscribed and strongly supported by a range of local and international groups including Australian businessman John Langley Hancock, S3 Consortium Holdings Pty Ltd and independent global fund manager L1 Global Master Opportunities Fund, among others.
It will be undertaken in a single tranche and the company also intends to seek shareholder approval to issue placement participants one option for every four shares issued which will be exercisable at A$0.38 each on or before a date that is 12 months after the date of issue.
“Well-funded to progress near-term initiatives”
Creso Pharma non-executive chairman Adam Blumenthal said: “We are extremely pleased to have generated such strong interest and support for the placement and I would like to welcome a number of new investors to the register.
“The board and management would also like to thank new and existing shareholders for their commitment to Creso Pharma.
“The placement was very well bid and leaves Creso Pharma well-funded to progress a number of near-term revenue-generating initiatives.”
EverBlu Capital acted as lead manager to the placement.
Advancing nutraceutical product sales
Funds will be deployed to undertake psychedelic clinical trials upon completion of the Halucenex transaction, advance sales of nutraceutical products globally and increase marketing of cannabis products through Canada.
Blumenthal said: “Key short-term focus will include finalising the acquisition of Halucenex and undertaking clinical trials.
“Importantly, the acquisition provides the company with access to another lucrative vertical and potential revenue stream.
“We will also be ramping up our nutraceutical division and preparing for the anticipated legalisation of cannabis in the US through our Canadian operations.
“Board and management look forward to providing shareholders with regular updates on progress over the coming months.”
The clinical trials will explore the efficacy of psychedelic molecules on a range of mental health conditions such as depression and Post Traumatic Stress Disorder and open up another lucrative vertical.
Funds will also be deployed to expand the company’s current nutraceutical offerings, scale-up operations at its wholly-owned Canadian subsidiary Mernova Medicinal Inc, in line with recent increasing demand for Mernova’s products, and progress a dual listing on the OTCQB in the US.
The OTC market listing is expected in quarter two of 2021 and will provide greater access to the North American investment community.
Further, with a strong cash balance, Creso is well-positioned to attract new partners and explore complementary acquisition opportunities that may arise, ahead of the pending federal legalisation of recreational cannabis in the US.
Story by ProactiveInvestors
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