‘Better use elsewhere’: MMJ gets rid of eSense stock for a loss
Health & Biotech
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MMJ Phytotech has sold out of troubled eSense at a loss, after the latter refused to approve options promised as part of a cornerstone investment last year.
MMJ made a $300,000 loss on the shares.
MMJ (ASX:MMJ), which was Australia’s first listed medical cannabis company, sold its 2.5 million shares in eSense Lab (ASX:ESE) for $200,000.
The cannabis investor put $500,000 into eSense in November in exchange for 2.5 million shares worth 20c.
“In terms of eSense-Lab, it was a divestment of a non-strategic and small holding in a business undergoing significant board changes,” MMJ chief Jason Conroy told Stockhead.
“MMJ can find a better use of the capital elsewhere,” MMJ chief Jason Conroy told Stockhead.
MMJ was also due to receive 1.25 million options with an exercise price — the price they could pay to use them — of 30c.
But after some severe board turmoil at eSense over the summer, shareholders refused to give MMJ the options.
eSense then had to pay MMJ a $199,999 fee in lieu of the options.
Across the whole shares and options package, MMJ has made a $100,001 loss.
“These divestments are in line with our strategy to recycle capital to provide cash for further investments by MMJ in the global cannabis sector,” Mr Conroy told the market.
“As a result, MMJ’s current unaudited corporate cash position will increase to approximately $8.1 million.”
MMJ also finalised the sale of its Dosecann shares after Cannabis Wheaton Income Corp swooped in with a takeover offer for the firm.
The Australian investor received $C5.6 million ($5.8 million) for that stake, reaping it a 2.2x return.
MMJ shares opened on Wednesday up 2 per cent to 31.5c