Roots Sustainable Agricultural Technologies (ASX: ROO), who develops adaptable technologies to tackle critical problems faced by the agricultural and cannabis industry, entered a trading halt yesterday in preparation of a Capital Raise announced today.
For the Placement, Roots is committed to raising A$650,000 via a Placement which will be exclusively reserved for professional and sophisticated investors.
Issued at a Placement price of $0.003, it will be an attractive 25% discount to today’s share price of $0.004.
Funds from the Placement will be utilised to boost sales & marketing efforts locally and globally, support operating expenses (including employee salaries), improve working capital, and to payout the Company’s existing debt equal to A$365,000.
As part of the Placement, Non-Executive Director Adam Blumenthal has stated he intends to participate and reserve A$200,000, or roughly 30% of the total capital raise for himself, which is subject to shareholder approval.
However, the Placement is slated to be headed by the controversial EverBlu Capital Corporate Pty Ltd, where acting as lead manager, the firm will receive and be awarded a 6% cash fee on the total funds raised.
If you didn’t know it already, Mr Blumenthal is Chairman of EverBlu Capital, where they have both been the feature of one of the latest financial scandals regarding cannabis company Melodiol Global Health (formerly Creso Pharma (ASX: CPH)) in November 2021.
Looking at the tip of the iceberg without taking a deep dive; the whole scandal was brought upon by ASIC (Australian Securities and Investment Commission) following suspicions that the firm was conspiring to create a false market for Creso shares in March 2021 when the Company was executing a capital raise targeting $18 million from investors. Included in the report, hard evidence was exposed of certain individuals involved broadcasting misleading information to shareholders in exchange for a cash cut from Creso.
As a result of the controversy; Creso executed the departure of Mr Blumenthal as non-executive director and founder to transition the Company back to the cannabis company it used to be, and EverBlu has shifted back to the small and micro-cap capital raising market (although kept under careful observation while operating under a magnify glass) with today being a good example.
Trading Desk Assistant at Emerald Financial
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