Highlights:
As recently announced (refer to ASX release: 23 July 2024), the Company has entered into a non-binding LOI for the sale of the Mernova land and production facility for an initial cash consideration of $12m, with up to $2.2m in earn outs. The transaction consideration is sufficient to repay the Company’s existing secured debt, thereby strengthening the balance sheet and providing working capital for further growth at Health House and Creso Pharma Switzerland. Additionally, the Company will attempt to recuperate revenues from Mernova, by retaining the Ritual brand as part of the transaction and either searching for new facility options, or by leveraging third party production to continue selling into existing markets. Recent revenue results for Mernova show that the Ritual brand experiences strong demand in the market, and the Company intends to leverage this demand during the next phase of its growth.
Management commentary:
CEO and Managing Director, Mr William Lay said: “Mernova continues to deliver very strong sales results. This is a result of the high-quality products that are produced, and the awareness of the brand in its core markets. Despite the contemplated asset sale, we intend to make every effort to continue offering the Ritual brand via either a new facility, or via third party production.”
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