British CBD maker Love Hemp Group was fined 100,000 pounds ($118,347) by the London-based Aquis Stock Exchange for misleading investors by announcing a capital raise of 2 million pounds that was not completed.
The exchange also suspended the trading of Love Hemp stocks (LIFE) and gave the company the option to pay a reduced penalty of 70,000 pounds for an “early settlement” of the fine.
Love Hemp said in a news release that it “has reached a settlement” with Aquis and “agreed to pay the sum of GBP70,000 to AQSE to resolve this matter.”
The company announced on Feb. 8 the completion of a capital raise of 2.06 million pounds and, according to the stock exchange, the raise included an agreement, or subscription deed, with an investor in the amount of 1.2 million pounds with a payment due date of March 7, 2022.
But when the investor failed to provide the money on March 7, Aquis alleges, Love Hemp did not notify investors.
The stock exchange also alleges that when Love Hemp announced interim results on March 31, it stated that “the cash position of the Company has been significantly improved following the post-period financing announced on 8 February 2022 with a total of (GBP) 2.06 being raised.”
On April 28, Love Hemp’s board decided to unwind the allotment of the shares to the investor and, on April 29, informed its Aquis corporate adviser, Peterhouse Capital, that the investor failed to deliver payment, according to the stock exchange.
Then, on May 2, Peterhouse resigned as Love Hemp’s corporate adviser and Aquis suspended Love Hemp shares from trading.
On May 3, according to the stock exchange, “Love Hemp announced the failure of the investor to deliver the funds due.”
Love Hemp said that it was working on finalizing a new corporate adviser, an important step in getting its trading suspension lifted.
“On behalf of the Board, we regret that Love Hemp has found itself in this position however I am pleased the Company has been able to resolve the situation with AQSE and looks forward to appointing a new Corporate Advisor and lifting the trading suspension shortly,” Love Hemp Chair Graham Mullis said in a statement.
“The Company has strengthened its Board, improved governance and controls and takes its responsibilities seriously as a publicly traded company.”