Cannasouth Announces Delisting

Overview

Cannasouth Limited (subject to deed of company arrangement) (NZX:CBD) (“CBD”) confirms that NZ RegCo has accepted CBD’s application to delist from the NZX Main Board, subject to CBD satisfying NZ RegCo’s requirements.

Delisting

There have been a number of subsisting breaches by CBD of its obligations under the NZX Listing Rules dated 24 July 2024 (“Rules”). For example, CBD has been unable to:

1. pay NZX Limited (“NZX”) outstanding listing fees prescribed by NZX in accordance with Rule 1.12.1;

2. compose a board of directors that meets the requirements specified under Rule 2.1.1; and

3. file audited annual reports within three (3) months of the end of CBD’s financial year in accordance with Rule 3.6.1,

(together the “Breaches”).

CBD has not been in a position to resolve the Breaches. Accordingly, in order to resolve them, the Deed Administrators have exercised their powers under the Deed of Company Arrangement dated 24 June 2024 (“DOCA”) to apply to NZ RegCo to delist CBD from the NZX Main Board and NZ RegCo has accepted CBD’s application to delist from the NZX Main Board.

Events following Delisting

As soon as practicable following the delisting of CBD, the Deed Administrators intend to exercise their powers under the DOCA to:

1. revoke the constitution of CBD, which incorporates the Rules;

2. replace the existing directors of CBD with new directors; and

3. resolve to transfer control of CBD back to the board of directors.

Best Interest of Shareholders

The deed administrators consider it in the shareholders' interests that CBD be delisted from the NZX Main Board. If CBD remains a listed entity, it will continue to incur additional compliance costs, which will delay the company’s ability to reach a positive cash-flow position. The decision to delist from the NZX Main Board has been made with the support of the investor group that put forward the DOCA.

While shareholders maintain their rights as shareholders, the new Board of CBD will be exploring ways for shareholders to trade their shares via an unlisted platform.

Shareholder Rights

CBD will operate as a private company after delisting. Private company shareholders have the rights and obligations set out in Part 7 of the Companies Act 1993, subject to any modifications contained in the company’s constitution (if any).

As a shareholder, you own part of the company but do not participate in its day-to-day management. Shareholders are free to sell their shares to anyone, subject to any shareholders' agreements or restrictions in the company’s constitution.

If you require further advice on your rights as a shareholder or are considering selling or disposing of your shares in the company, we recommend that you seek independent advice on this matter.

CBD Operations

The CBD group continues to process several varieties of cannabis flower and produces CBD oral solutions, both to a GMP standard. Sales of the company products are in line with budget projections. While there are regulatory hurdles to export, the management team is exploring the possibility of expanding group revenues through offshore markets while continuing to build on its domestic market base.

Reporting

CBD will need to comply with its statutory reporting requirements following the company's delisting. This will include complying with audit requirements and holding the requisite shareholder meetings.

During the deed administration process, the Deed Administrators will endeavour to keep CBD’s shareholders informed of material matters which relate to CBD. Once CBD is delisted from the NZX Main Board details on the administration process and the DOCA can be found at the Deed Administrators’ website:

https://www.blacklockrose.co.nz/cannasouth

Once control of CBD has been transferred to the board of directors, queries regarding the company’s affairs can be directed to CBD’s interim CEO David Petterson by email: [email protected]

-ENDS-

For further information, visit www.cannasouth.co.nz or contact:

Garry Whimp Deed Administrator, Blacklock Rose Ltd
Email: [email protected]
Mobile: 021 587 230

Ben Francis
Deed Administrator, Blacklock Rose Ltd
Email: [email protected]
Mobile: 021 042 6991
About Cannasouth Limited

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Announcement PDF