Shares of Hydroponics Company Ltd [ASX:THC] are down almost 5% after a number of assertions and allegations from Agri Fibre industries and Pegasus Agriculture.
The companies are seeking the immediate conversion of a number of performance shares issued by Hydroponics at the time of the company’s IPO in May 2017 into fully paid ordinary shares.
Hydroponics maintains that the claims are without merit, but its share price today hasn’t reflected this.
How allegations are hurting Hydroponics’ share price
In the best interest of the company and its shares, Hydroponics is adamantly denying the assertions and defending any action taken.
AFI and Pegasus are claiming the following performance shares:
- AFI — converting on a basis 1:1, with 2,000,000 Class A performance shares, and 12,000,000 Class B performance shares.
- Pegasus — converting on a basis 1:1, with 2,500,000 Class C performance shares, and 6,000,000 Class D shares.
In other news, Hydroponics is welcoming Canada’s legalisation of recreational cannabis, as its main market being to them, where its fully-owned subsidiary, Crystal Mountain, manufactures as well as distributes hydroponic products.
In order to take advantage of Canada’s recreational legalisation of cannabis, hydroponics is expanding its warehouse to meet the expected increase in demand.
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Hydroponics Global’s CEO, Ken Charteris, commented on its operations:
‘…whilst our focus remains on revenue generation from our global medicinal cannabis operations, our expanding presence in the Candian Market through Crystal Mountain and our partners will enable us to take advantage of the broadening of the Canadian market. THC Global has vertically integrated strategy, providing both the means to grow cannabis to miro-cultivators and home-growers from Crystal Mountain with a view towards selling cannabis products into the Canadian market’
What’s to come for Hydroponics in the future?
Hydroponics has briefed a legal counsel in regards to the allegations. In the meantime, the company is looking to expand their future operations in order to take advantage of the new prospects in Canada.
Hydroponics is expecting to see good results in the coming quarter, after the combined extra focus on its miro-cultivator and domestic markets, and the launch of its new website with a corporate target rebranding.
For Money Morning
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