Cann (ASX:CAN) share price lower on cyber attack update

The Cann Group Ltd (ASX:CAN) share price was out of form on Monday despite the release of two announcements. One was an update on its cyber attack…

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The Cann Group Ltd (ASX: CAN) share price was out of form on Monday.

The cannabis company’s shares fell 3.5% to 55 cents.

This latest decline means the Cann share price is now down a disappointing 56% from its 52-week high.

Why is the Cann share price on the slide today?

The Cann share price came under pressure despite the release of two announcements.

This first, covered in more detail here, reveals that the company has signed a partnership with Emyria Ltd (ASX: EMD).

That partnership will see the two parties work together to accelerate the registration of a unique, low-dose, cannabidiol (CBD) only capsule with Australia’s Therapeutic Goods Administration (TGA).

What was the second announcement?

This afternoon Cann also provided the market with an update on the cyberattack it experienced in February.

In case you missed it, in February the company advised that it had been the victim of a complex and sophisticated cyber fraud perpetrated against it and its overseas contractor.

This saw Cann make a payment of EUR2.25 million (~$3.5 million) to an overseas contractor, only for it to end up with an unknown third party.

According to today’s announcement, Cann has commenced a civil proceeding in the High Court of the Hong Kong Special Administrative Region against a third-party defendant, Er Ya Trade, seeking recovery of EUR2.25 million.

The company also advised that an injunction has now been granted by the Court in favour of Cann to freeze certain assets of the defendant and to compel disclosure of ancillary information relating to assets held by it.

What next?

The release explains that the matter will now go through the Court process. Based on current information, Cann has been advised that this is likely to take between four and six months.

However, management has warned that there is no guarantee that any amount will be awarded to Cann or funds ultimately recovered from the Defendant through this process.

Cann intends to provide further updates as material events in the proceeding arise.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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