Cannasouth Commits to Returning Wage Subsidy After Successful Capital Raise

Thursday 7th May 2020

On the 1st of April 2020, Cannasouth Plant Research New Zealand Limited (CSPRL) applied for and was subsequently granted, $85,726 through the New Zealand Government's Wage Subsidy Scheme.

CSPRL, which is 100% owned by Cannasouth Limited (CBD), has been generating revenues, as noted in our annual report released to the market on 30th March 2020.

When CSPRL ceased operations at the Waikato Innovation Park, Hamilton during the COVID19 level 4 lockdown, it was unable to continue with its revenue-generating activities. Some research activities were also negatively impacted.

Other companies within the Cannasouth Group did not apply for the subsidy. CBD (parent company) and Cannasouth Cultivation Limited (50% owned) did not meet the criteria, and Midwest Pharmaceutics NZ Limited (60% owned) revenues have increased as recently reported to the market.

CSPRL met the criteria for the Government’s wage subsidy and applied for, and used it appropriately.

On the 15th of April 2020, the Board of CBD announced it was opening a Share Purchase Plan, which was looking to raise $3 million from eligible existing shareholders based in New Zealand and Australia.

On the 21st of April 2020, the Board announced it was varying the terms of the plan with an intention to increase the offer to $5 million.

On the 4th of May 2020 CBD announced it had received excess acceptances of $690,014 under the SPP, and the Board had resolved to place those excess acceptances. In addition, CBD has also raised a further $334,839 from several wholesale investors. In aggregate, CBD raised $6,024,853 from its capital raising initiatives.

While CSPRL still meets the criteria for the subsidy, following the overwhelming success of the capital raising the Board has resolved to withdraw the application for wage subsidy and repay the process for doing this

About Cannasouth Limited

Cannasouth is a biopharmaceutical research and development company based in the Waikato heartland of New Zealand. The Company has been established to focus on the commercial development of the medicinally beneficial attributes of cannabinoid compounds such as CBD, THC and associated chemical structures that are produced by the cannabis plant. Our goal is the development of next-generation cannabinoid medicines that support patients' health outcomes and improve their quality of life. Our products will be produced under GMP & ISO using environmentally friendly methods without the use of harmful chemicals or solvents, ensuring patients are treated with pure cannabinoid therapeutic compounds of the highest quality.

Comments from our readers

No comments yet