(Alliance News) - Highlands Natural Resources PLC said on Monday that it has secured GBP354,000 through a share placing and that it is implementing cost reducing measures until the Zoetic cannabidiol product is self-sustainable.
The natural resources company, which earlier this year ventured into the cannabidiol oil market, placed 5.1 million shares at a price of 6.90 pence each.
Shares in Highlands were down 1.8% at 6.73 pence each in London on Monday morning, giving it a market capitalisation of GBP9.6 million.
The proceeds will be used to market and develop the Zoetic products in the US and UK, the company said.
Chief Executive Robert Price said: "We are delighted to welcome our new shareholders to Highlands. Whilst the company had no immediate funding requirement, we were keen to accept the investment of these influential people, who approached Highlands following the achievements we have made in our cannabidiol business, which they found highly attractive.
"Their experience and connections may be invaluable to us as we further develop Zoetic. The new funds will be utilised immediately in expanding our manufacturing capabilities and further developing awareness of the Zoetic brand."
Ahead of its annual general meeting, the company said, although its gas and oil projects remain its largest source of income, "there is every reason" Zoetic could usurp it.
Until the cannabidiol product is self-sustainable, however, Highlands said it will implement a hiring freeze, unless for essential replacements, and cutback on the number of staff it has.
It will also reduce or sub-let its Denver, Colorado office space and said these measures, which are being undertaken because of the costs associated with building a new retail business, will cut operating expenditure by USD65,000 per month.
Aside from fixed salaries, all director and management remuneration will be linked to the company achieving financial targets.
Highlands said it hopes to release an announcement about potential listing on the US over-the-counter-market shortly.
The company said in July that it targeted placing its shares on the OTC by the end of summer in order to make it easier for shareholders and potential investors in the country trade its shares. Highlands added at the time that listing its shares in the US will have no impact on its existing London listing.