Business Cann reports
LOVE Hemp has been forced to pay a £70,000 ‘financial penalty’ to the Aquis Stock Exchange (AQSE) for breaching a number of guidelines, including the publication of ‘misleading’ information.
The embattled CBD company, which has had its shares suspended from the platform since early May, announced last week that it had ‘reached a settlement’ with AQSE regarding a disciplinary notice.
This fine is understood to be the result of an ‘ongoing confidential AQSE investigation’ into the company’s handling of a £2m capital raise in February 2022, which resulted in the departure of its corporate advisor and its subsequent suspension.
Now a settlement has been agreed, Love Hemp tells BusinessCann it can now progress with discussions with its proposed new AQSE advisor and see its suspension lifted ‘as soon as possible’.
On August 25, 2022, AQSE made the findings of its confidential investigation into Love Hemp public, shedding light for the first time on a number of events leading up to its suspension.
The stock exchange found that Love Hemp had twice breached rule 4.2 of the AQSE Rulebook, which states companies must ensure information it announces ‘is not misleading, false or deceptive’ and doesn’t omit any pertinent information.
It also found that Love Hemp had breached rule 3.3, which states a company must establish systems to ensure it is able to comply with AQSE rules, and that its directors understand their obligations and responsibilities.
Furthermore, Love Hemp was also found to have breached rule 3.5, which requires companies to ‘act with integrity towards the holders and potential holders of its securities’.
As a result of these failures, Love Hemp was issued a £100,000 fine by AQSE, which was reduced to £70,000 for early settlement.
Love Hemp, which reported a net cash balance as of December 31, 2021 of £83,113, told BusinessCann while the ‘fine is unfortunate at current trading levels’ it ‘does not impact the company’s operations’.
In a separate statement to investors, newly appointed Chairman Graham Mullis said the board ‘regret that Love Hemp has found itself in this position’ and that the company has taken remedial measures to ‘strengthen its board’ and ‘improve governance’.