TRADING IN TOKI SHARES REMAINS SUSPENDED EVEN WITH COMPLIANCE

Trading in the shares of Canadian medical cannabis company Tree of Knowledge international Corporation (TOKI) remains suspended even though the firm has complied with the Jamaica Stock Exchange (JSE) rules for which it was penalised.

The JSE suspended trading in TOKI shares on October 16 over the company’s failure to file its second quarter financial statements for the period ended June 30, 2020.

In a statement then, the equities regulator reported that “the decision to suspend TOKI is based on the fact that the company has breached Rule 407 – Quarterly Financial Statements, which states that companies with quarterly financial statements which are 45 days overdue shall have trading in their shares suspended until the reports are submitted to the JSE.”

However, TOKI has since provided financial information for its second and third quarters but the suspension will not be lifted.

JSE Managing Director Marlene Street Forrest confirmed on Friday that the suspension will not be lifted, saying that the company has committed other JSE Rule breaches. As such, this warrants that the suspension remains in effect.

Street Forrest told the Jamaica Observer that as soon as there is full compliance, the JSE will consider lifting the suspension.

The JSE boss was unable to go into details about the other breaches she said were committed by medical cannabis company, which is the first of its kind to be listed on JSE, and the first to be cross-listed between the Canadian Securities Exchange and the JSE.

In its financials for the nine months ended September 30, 2020, TOKI reported a net loss of US$3.9 million, which is an improvement on the US$5.09 million reported for the same period last year. At the same time the company experienced a negative cash flow from operating activities of US$451,178.

This, too, was an improvement on the out-turn for 2019 when the negative cash flow was US$1.79 million. In addition, as at September 30, 2020, TOKI had an accumulated deficit of US$46.05 million.

This was down from the accumulated deficit of US$42.14 million recorded as at December 31, 2019 and a working capital deficiency of $3.45 million in 2020 compared with the US$2.38 million recorded for 2019.

Furthermore, TOKI is a defendant in certain litigation, which has compounded its financial situation.

These conditions indicate the existence of material uncertainties, which cast significant doubt about TOKI’S ability to continue as a going concern. The company’s auditors report that TOKI’S “ability to continue as a going concern is dependent upon its ability to attain profitable operations and generate funds therefrom, to resolve its litigation and to continue to obtain financing sufficient to meet current and future obligations and/or restructure the existing liabilities.”