Cann Group Invites Shareholders to Join $2.5M Share Purchase Plan with Options

Context and Capital Raising Strategy

Cann Group Limited, a key player in the medical cannabis sector, has announced a Share Purchase Plan (SPP) aimed at raising up to $2.5 million from its eligible shareholders. This initiative follows a recent $6.5 million placement to institutional and sophisticated investors, underscoring the company's ongoing efforts to strengthen its capital base amid a significant debt restructuring.

Offer Details and Pricing

The SPP offers shareholders the opportunity to purchase new fully paid ordinary shares at a fixed price of $0.0115 per share or at a 2.5% discount to the volume weighted average price (VWAP) over the five trading days leading up to the offer’s closing date. Shareholders can apply for parcels ranging from $2,000 up to a maximum of $30,000, with the plan designed to be non-renounceable and available exclusively to those with registered addresses in Australia and New Zealand.

Attaching and Piggyback Options

In addition to the shares, the company proposes to issue attaching options on a one-for-one basis for each new share subscribed under the SPP. These options will be exercisable at $0.0115 and expire in June 2026. Furthermore, piggyback options exercisable at $0.0285 and expiring in June 2028 will also be offered. Both option classes are subject to shareholder approval at an Extraordinary General Meeting (EGM) anticipated in December 2025. These options provide investors with potential upside exposure beyond the initial share purchase.

Debt Restructure and Use of Proceeds

The capital raised through the SPP and the prior placement will be partially allocated to settling the company’s outstanding loan facilities with National Australia Bank (NAB). Cann Group has entered into a forbearance deed with NAB, agreeing to pay $15.3 million to discharge existing security interests and mortgages. Additionally, the company has secured a new credit facility of $9 million from a private Australian credit fund, bringing total debt to $14.5 million with a two-year maturity. The balance of funds will support growth and expansion initiatives within the company’s platform.

Participation and Scale-Back Mechanisms

The SPP is designed to provide equitable participation opportunities to eligible shareholders, with a scale-back mechanism in place should applications exceed the $2.5 million target. Applications above $2,000 may be scaled back on a pro-rata basis to ensure fairness. The offer opens on 30 October 2025 and closes on 17 November 2025, with new shares expected to be issued and commence trading on the ASX by 25 November 2025.

Regulatory and Legal Considerations

The offer complies with ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547, allowing the company to issue shares without a prospectus. However, the attaching options will require shareholder approval and a separate prospectus. The SPP excludes shareholders outside Australia and New Zealand due to regulatory restrictions. Cann Group emphasizes that participation is voluntary and encourages shareholders to seek independent financial advice before applying.