Health sciences company Algae.Tec (ASX: AEB) has launched its latest capital raising round, seeking $2.5 million to help bolster its nutraceuticals and medical cannabis departments.
Executive chairman and managing director Malcolm James says the capital raising will unlock new opportunities for the company, including in the medical cannabis space.
"This funding gives AEB further financial flexibility to fast track the growth of our algae and other plant-based operations and investments, including those we have made in the medicinal cannabis sector," says James.
"Ensuring we have the correct ASX classification to invest further in the medicinal cannabis space is a priority and we are now actively pursuing this."
The company went into a trading halt on January 15 and emerged late last week from voluntary suspension to announce that it will issue more than 62 million new shares to the market.
Today marks Algae.Tec's first trading day in almost two weeks, after making its announcement and reinstatement to official quotation when the market was closed on Thursday afternoon.
Its share price dropped by as much as 25 per cent during early trade on Monday, however at around 10:30am AEST it recovered by five per cent to trade at $0.038.
Algae.Tec is in the business of cultivating algae products including proteins for human and animal consumption, as well as biofuel oils for power generation.
The company's foothold in the medical cannabis space grew significantly in December last year when it joined forces with Queensland Bauxite's (ASX: QBL) subsidiary Medical Cannabis Limited (MCL) to develop cannabinoid-based medicines for animals.
Products including cannabis oil have previously been used to alleviate cancer symptoms in animals, as well as provide treatment for pain, inflammation and other end-of-life health issues.
The arrangement between MCL and Algae.Tec was to combine resources, experience and technical knowledge to research across several fields of animal health care.
When the partnership was announced, Algae.Tec said its goal was to capitalise on the international market for veterinary supplies which is estimated to be a 'multi-billion-dollar industry'.
"There is a massive demand in the animal industry for suitable and safe drugs for the transport and general treatment of animals whether for anxiety or pain related problems," said the company in a release.
"Appropriate cannabis products is believed to be the perfect solution, which Algae.Tec intends to introduce to and provide this huge industry and its demand."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.