Akanda
Akanda has settled a loan from its most significant shareholder Halo Collective, with which it shares a CEO, by giving it shares in the company.
According to an SEC notification published last week (August 18), Akanda borrowed $328,000 from Halo on January 26, 2023.
The loan had an interest rate of 7% per annum and had a maturity date of June 25, 2023, with any overdue amount accruing a further interest rate of 1.25%.
A month after the maturity date, the companies agreed to settle the debt by converting $360,960 of the total remaining outstanding balance, including accrued interest… into common shares of the company at $0.62 per share’, representing 581,193 shares.
News that Akanda had failed to make its repayment deadline, and has resorted to settling the debt via offering shares has further driven speculation of the company’s financial situation among its investors.
Last month, Business of Cannabis reported that the company was once again facing delisting from NASDAQ due its share price falling back below $1, less than six months after it resorted to a 1:10 reverse stock split in order to avoid an initial threat of being delisted from the exchange.
Halo Collective is seemingly not faring much better, last week it announced that it had been delisted from the CBOE Exchange as it reported dual sets of ‘challenging’ financial results.
On August 15, Halo published its Q2 2023 financial results, reporting a revenue drop of 48.1% to $3.6m, while the total amount of product sold dropped 31.5% to 1.4m grams.
The news came just days after Halo published its long-delayed Q4 results, and its Q1 2023 results, following a change in auditor.
These results failed to provide much solace for investors, seeing revenues drop from $8.4m in Q4 2021 to $4.6m in Q4 2022, again attributed to challenges in Oregon and California.
Pharma C
The Aquis-listed cannabis investment vehicle Pharma C, was fined £30,000 by the exchange last week following a disciplinary investigation.
Yesterday (August 23), Pharma C also reportedly received a written ‘requisition request’ from one of its shareholders, which could see the company forced to hold a general meeting if its lawyers determine the ‘validity of this requisition request’.
According to the disciplinary decision notice, Pharma C is now required to pay £15,000 immediately to the exchange, and a further £15,000 if they fail to follow the rules of the exchange over the next year.
The company was determined to have broken ‘Article 17 (1) of Market Abuse Regulation (and thus AQSE Rule 4.1) by failing to disclose information which would be relevant to an investor’s decision about the Company.’
This related to an announcement on June 30, 2022, made alongside its full year results, in which it said it had raised ‘£200,000 before expenses by way of a subscription’.
“The funds were not received by the due date. The Company failed to update the market on this, or on its ongoing attempts to secure the funding, until 18 November. As such, investors had a false impression of the Company’s financial position from the beginning of July until mid-November 2022,” the notice said.
Furthermore, after the publication of its annual financial report on June 30, 2022, the company did not convene an AGM until December 2022, ‘outside of the timeframe set out in the Companies Act 2006’.
As the company attempted to secure funding, the company also failed to publish its interim accounts when due on September 30, 2022, ‘such that investors did not have access to the most recent financial information about the company’.
In a further announcement from June this year, separate from the period referenced in the disciplinary investigation, Pharma C announced that it would also not be able to publish its financial statements for the year ended December 31, 2022, by June 30 2023 ‘as required by the AQSE Growth Market Access Rulebook’.
While the company said it ‘will be in a position to publish the company’s results in early July’, these have not been published at the time of writing, meaning the company could potentially be liable to pay the further £15,000 penalty to Aquis.
