Chill Brands
The CBD and vaping retailer Chill Brands has voted to oust two of its longest-standing directors as part of an investor coup.
Meanwhile, the company’s chief executive, Callum Sommerton, has now been reinstated after an investigation into insider trading determined that the allegations could not be ‘evidenced to a sufficient degree’.
The board room debacle began in April, when a major shareholder called to requisition a general meeting to vote on the ousting of Antonio Russo and Trevor Taylor, both of whom were appointed to the board of directors in 2020.
Following a general meeting on June 04, the board voted to pass all the resolutions put forward by activist investor Jonathan Mark Swann, who owns 12.58% of the company’s total voting rights.
As such, Mr Russo and Mr Taylor have been removed as both directors and subsidiary directors with immediate effect, but will reportedly remain on the payroll as employees of the company.
The pair have held various senior roles at the company and were co-CEO’s during one of Chill Brands’ most turbulent periods.
In their place, the board has appointed Mr Swann’s recommendations, seeing Aditya Chathli become Non-Executive Chairman of the company and Graham Duncan take on the role of Finance Director.
I am delighted to have resumed my role as CEO of Chill Brands Group Plc and am deeply grateful to all those who have expressed their support during what has been an exceptionally trying period.
In April, almost immediately following the receipt of a valid requisition seeking… https://t.co/dCEIiuT0E8
— Callum Sommerton (@callumsomm) June 4, 2024
Mr Chathli, is a capital markets and media strategist with over 25 years experience raising ‘the profile of organisations, companies and government policies’.
He has experience advising FTSE 100 and AIM-listed business across various sectors and regions, and he is currently listed as a director at nine other companies.
Mr Duncan is a chartered accountant with more than 25 years experience working in capital markets.
Days after the announcement of the requisition letter was made, news emerged that Chill Brands CEO had been suspended over allegations of the use of inside information.
Following an investigation into the matter by law firm Fieldfisher, the board announced this week that it had received preliminary guidance that the allegations ‘will not be evidenced to a sufficient degree’.
“Consequently, the Board have unanimously agreed to discontinue this investigation and reinstate Callum Sommerton as Chief Executive Officer, with full responsibilities for running the day to day operations, with immediate effect.”
In a statement made on X, Mr Sommerton confirmed speculation that the allegations had been made by the now ousted directors: “In April, almost immediately following the receipt of a valid requisition seeking their removal as company directors, the company’s US executives made allegations against me, apparently related to my modest £10,000 investment in the company’s fundraise four months prior. As a result I was effectively silenced during the period leading up to today’s General Meeting.”
A second investigation is reportedly ongoing in ‘a number of commercial arrangements that the Company has entered into connected to its UK vape business’.
Amid the public turbulence, Chill Brands opted to suspend its shares this week as its board of directors were ‘unable to currently provide the market with an accurate update of its financial and trading position’.
Voyager Life
In an update to investors this week, UK-based CBD company Voyager Life announced that a second acquisition deal in two months has now fallen through, leaving the company in need of refinancing.
In April, Business of Cannabis reported that a proposed merger with embattled UK medical cannabis cultivator Northern Leaf had fallen through.
The proposed deal would have valued the newly combined entity at £5m based on Voyager’s share price at the time, assuming a ‘deferred consideration’ is paid in full.
It was also considered a ‘rescue of a company that is in serious financial difficulty’, and was contingent on Voyager being able to raise enough working capital via a fundraise.
According to its latest trading update, the last-minute cancellation of the deal amid concerns that its fundraise would not be sufficient to meet Northern Leaf’s needs has taken its toll on Voyager’s financial position.
Following the news, the value of the Aquis-listed company’s shares dropped by around 60%, reducing the company’s market capitalisation by over £1m, now sitting at just £396k.
With this significant drop in value preventing it from pursuing an additional fundraise and the failed deal meaning no working capital is available to ‘acquire additional equipment for its manufacturing division’, the company quickly ‘identified a new merger partner’.
This unnamed partner was reportedly a European company that would have been ‘transformative on the scale of Voyager’s operations as well as opening up several new markets’.
Despite working with the company over the last six weeks to agree heads of terms in principle, the company once again pulled out of the deal at the eleventh hour.
The result of a second failed merger in as many months now means that the company’s ‘financial position is now considerably constrained as (it) had deferred its funding plans pending conclusion of this more recent merger plan’.
“Voyager will require refinancing in the near term, and the Board will commence discussions with shareholders and prospective investors immediately,” it said in a statement.
“In addition to the potential of issuing new equity, the Board is also undertaking a review of its existing business. There is no guarantee that these current discussions will result in new funding being secured or that the terms of any such agreement will be favourable to the Company and its shareholders. In the event that further funding cannot be secured, the company may need to consider alternative options.”
On a more positive note, the company says it has recently secured a significant new customer for its manufacturing division, VoyagerCann.
The preliminary order, expected in June 2024, includes at least six product lines with an initial value of up to £30,000, with potential for further orders based on demand. This new customer, a leader in its field with extensive retail and online presence, could become Voyager’s largest customer to date.
Oxford Cannabinoid Technologies
Following its announcement that it planned to delist from the London Stock Exchange (LSE) after just three years last month, Oxford Cannabinoid Technologies (OCT) will finalise its listing cancellation today.
From 8am on Thursday, June 06, the company’s ordinary shares will no longer be included on the Standard Segment of the FCA’s Official List.
Furthermore, the company has informed existing investors that it no longer plans to explore the implementation of a matched bargain facility following the cancellation.
A matched bargain facility is a type of trading service used in the stock market to facilitate the buying and selling of shares that are not listed on a major stock exchange, and OCT stated in its May 08 announcement that it may pursue this route.
However, on May 31, OCT published an update stating that its board had concluded ‘that it is not practicable in the short term to put in place such a facility.’
