Public Interest Journalism funded through NZ On Air
Rua Bioscience has managed to get $1.2 million through a capital raise to help the Tairāwhiti-based medicinal cannabis company continue operating.
Rua Bioscience aimed for $3.1m through a capital raise beginning on November 6 to help with operating costs and fund working capital to grow sales.
The company went throughout New Zealand and online, sharing updates and explaining why it needed to raise more cash.
The capital raise closed on Monday, December 2.
Rua Bioscience chief executive Paul Naske said considering the recessionary environment of New Zealand, “we are pretty okay with that result”.
“We are really thankful for the support from shareholders who have seen what we are doing and support us,” he said.
The rights issue raised about $1.2m, comprising entitlements and oversubscriptions taken up by existing shareholders in addition to a few new shareholders who participated through the shortfall.
Eligible shareholders subscribed for an additional 47,119,179 new shares, including oversubscriptions.
Naske said over the next period it would need more money and that would come from the Gisborne manufacturing facility sale, increased sales across the four revenue streams, or another capital raise down the track.
“But for now we are happy,” he said. This doesn’t mean Rua Bioscience is stopping operating.”
Naske said its short-term goal was getting sales up in the four markets – New Zealand, Australia, Germany and the United Kingdom.
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The next major milestone for Rua Bio is getting the company to “cashflow, break-even”, which Naske said was probably 18 months away.
“We now know that we are going to make that in terms of the products in the market and growing the sale.”
Rua Bioscience would be around for 100 years, Naske said.
“No one can predict the future, but we have a team aboard and kaupapa that we are all about surviving and being around for the community. We are here for the long term.
“We will be around. We have to, so we will have to adjust and be flexible and adaptable, and that’s how we approach business.”
Naske said it was a tough environment for medicinal cannabis, but Rua Bio’s strategy was “pretty solid” and it was executing on that strategy and growing.
Naske thanked the original shareholders who put in the funding for the company to start off.
“We as a board, management and company hold true to the original kaupapa. Quite often people think we are losing track, but we aren’t.”
Matai O’Connor (Ngāti Porou) has been a journalist for five years and kaupapa Māori reporter at the Gisborne Herald for two years.