Puration Announces LOI to Spinoff Cannabis Cultivation Business and Issue Stock Dividend to Shareholders
DALLAS, September 21, 2018 /PRNewswire/ —
Puration, Inc. (PURA) (“PURA”) today announced executing a letter of intent (“LOI”) to spinoff its cannabis cultivation business. The prospective “spinoff” will be affected by selling the cannabis cultivation business to a target publicly traded holding company. The spinoff transaction is scheduled to close promptly following the end of the fiscal third quarter on September 30tht, 2018.
Under the terms of the LOI, the target publicly traded holding company will issue PURA a $1.2 million convertible note in exchange for the cannabis cultivation company. After a planned recapitalization of the target company, according to the terms of the LOI, the $1.2 million note will be converted to common stock. Then, further to the terms of the LOI, the converted common stock of the target public company will be issued in a dividend distribution to the shareholders of PURA. The spinoff transaction is structured whereby PURA shareholders are to receive one share of target public company stock for every five shares of PURA stock that they hold.
The target public holding company in this transaction is considered a vehicle for affecting a spinoff of PURA’s cannabis cultivation business. The current operations in the target public holding company are not considered strategic to the cannabis cultivation spinoff. The current assets of the target public company are expected to be divested at some point in the future and the minimal liabilities of the target public company are intended to be eliminated in the planned recapitalization. The target public company, Nouveau Life Pharmaceuticals, Inc., (NOUV) (“NOUV”) will be renamed after the execution of the prospective spinoff transaction.
The prospective spinoff transaction is ultimately structured as a reverse merger involving comprehensive terms that include a change of control. Once all terms of the comprehensive transaction have been completed, the current majority shareholder of PURA, is slated to also become the majority shareholder of target public company which will then be an independently traded cannabis cultivation company. All parties intend to promptly initiate 1.) the recapitalization of the target public company, and 2.) the corresponding conversion of the $1.2 million note into common stock of the target public company, as well as 3.) the dividend distribution of the converted stock to the shareholders of PURA, following the sale of the cannabis cultivation business to the target public company. Look for an announcement indicating the sale has closed after September 30, 2018
Learn more about Puration at http://www.purationinc.com
Learn more about the cultivation business at https://www.purationinc.com/extraction
This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company’s current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies’ contracts, the companies’ liquidity position, the companies’ ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.