DALLAS, September 13, 2018 /PRNewswire/ --
North American Cannabis Holdings (USOTC: USMJ) ("USMJ") today announced details of the plan to spinoff its restaurant subsidiary as part of an overall strategy to expand its cannabis wholesale operations and introduce an online cannabis retail e-commerce business. Details of the company's wholesale operations expansion and retail e-commerce business expected to rapidly increase the company's near $1 million in existing annual revenue can be found on the company's new website http://www.growusmj.com . Details of the spinoff are included in this press release. Further details are anticipated to be available next week when USMJ expects to publish the term sheet agreement between all parties involved in the spinoff transaction.
Spinoff Transaction Mechanics
The majority interest in USMJ is controlled by ACI Conglomerated ("ACI"). ACI plans to acquire a majority interest in a yet to be disclosed target public company. The target public company will then issue stock to USMJ in exchange for the controlling stock interest in USMJ's restaurant subsidiary. The stock issued to USMJ in exchange for the restaurant subsidiary will then in turn be issued to the shareholders of USMJ through a dividend distribution.
Note - ACI is executing a similar spinoff transaction with another of its portfolio companies, Puration (PURA). The target company described here in is a different company than the target company ACI plans to engage with in a separate transaction with Puration.
Spinoff Stock Ratios
The agreed value of the restaurant for the purposes of the spinoff transaction is approximately $1.5 million. The actual transaction valuation or "sale price" may vary. The target public company will issue preferred stock with a fixed price per preferred share where the sum value of all the issued preferred shares equals the sales price. The preferred shares will be convertible into common shares. In conjunction with the spinoff transaction, the common shares of the target public company may be restructured. The common shares may be spit to better facilitate conversion of the preferred shares into common so that the converted common shares can be distributed to USMJ shareholders in a sensible ratio. The exact ratio will not be finalized until all the necessary corporate actions are approved by the overseeing regulatory authorities.
Spinoff Time Line
The updated spinoff time line has been adjusted to coincide with the end of the current fiscal period on September 30th. All parties plan to contemporaneously execute the combined transactions necessary to affect the spinoff promptly after September 30th . Management anticipates the potential stock restructuring of the target public company, and dividend issuance of spinoff stock to take approximately another 30 days after the spinoff transaction. The company is planning to disclose the term sheet to include the name of the target public company next week.
Visit the new website at http://www.growusmj.com.
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.
CEO North American Cannabis Holdings, Inc.
SOURCE North American Cannabis Holdings