Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) has received firm commitments from new and existing institutional, professional and sophisticated investors to raise $2 million through the issue of about 133 million fully paid ordinary shares at an issue price of $0.015 per share.
The completion of the placement follows the company’s record revenue growth of 44% to $8.95 million in FY2022 and a considerable reduction in net operating expenditure.
The funds from the placement will be used for increased sales and marketing in the US, completion of milestone Phase 2 clinical trial using psilocybin and additional M&A opportunities.
Critical growth period
Creso CEO and managing director William Lay said: “The company received strong support from a range of investors for this placement.
“I would like to take this opportunity to welcome new investors to the register, as well as thank existing shareholders for their support.
“The funds raised come at a critical growth period for the Creso Pharma group.
“The company continues to achieve record revenue growth and has a number of initiatives underway which is expected to unlock considerable value for shareholders.”
Placement summary
Subject to shareholder approval, investors will receive two options for every placement share subscribed for and issued.
The total amount raised includes a $100,000 commitment from group CEO and managing director William Lay, which will be subject to shareholder approval at a future general meeting.
These include one free attaching listed option exercisable at $0.08 on or before January 31, 2027, and one free attaching unlisted option exercisable at $0.03 on or before the date that is 18 months from the issue date of the shares under the placement.
EverBlu Capital Corporate Pty Ltd acted as lead manager for the placement.
Use of funds
The funds raised from the placement will be used as follows:
- sales and marketing initiatives in the US;
- completion of Halucenex Life Sciences Inc’s Phase 2 clinical trial to test the efficacy of psilocybin on treatment resistant post-traumatic stress disorder (PTSD);
- pending M&A opportunities;
- product development initiatives;
- costs of the offer; and
- repayment of existing debt.