- AusCann (AC8) agrees to lease the company’s WA-based research and development (R&D) facility to Source Certain International (SCI)
- SCI provides forensic provenance and analytical R&D services to the food, agriculture, mining, law enforcement and pharmaceutical industries
- The five-year lease forms part of AC8’s growth strategy to reduce operating expenses, maximise the value of its assets and focus on core R&D
- AusCann shares are up 4.55 per cent to 11.5 cents each at 1:03 pm AEST
Medicinal cannabis developer AusCann (AC8) has agreed to lease the company’s Western Australia-based research and development (R&D) facility to Source Certain International (SCI).
SCI is a globally recognised Australian scientific tech company, providing forensic provenance and analytical R&D services to the food, agriculture, mining, law enforcement and pharmaceutical industries.
The lease forms part of AusCann’s revised growth strategy, aimed at reducing its operating expenses, maximising the value of its assets and more clearly focusing its resources on core R&D as well as commercialisation opportunities that are expected to provide the best return on investment.
Under key terms of the five-year agreement, AC8 retains two options to extend the lease by five years at at time.
While SCI will enjoy the first six months rent-free, the remainder of the contract carries an annual rent price tag of $475,000, excluding GST, subject to CPI increases and rent reviews.
Further, SCI has the right to purchase the facility in the event that AusCann decides to sell.
AusCann CEO Layton Mills commented on the deal.
“This will further reduce our non-R&D-related cash outflow, allowing the company to focus resources on expanding our research pipeline and commercialising our lead products in development,” he said.
“SCI is in an exponential growth phase of its business and the R&D facility developed by AusCann presents the business with a great opportunity to accelerate this growth,” SCI Managing Director Cameron Scadding added.
Mid-session on Thursday, AusCann shares were trading 4.55 per cent higher at 11.5 cents each at 1:03 pm AEST.