Zenabis Spinout of Company’s Stellarton Center of Excellence for Cannabis 2.0 products
Zenabis is rumored to announce that its board of directors will approve a spinout of the Company's Stellarton Property to its shareholders by way of a share capital reorganization effected through a statutory plan of arrangement. Under the Arrangement, Zenabis would transfer the Stellarton Assets to a wholly-owned subsidiary, Calm Inc. ("Calm"), in consideration for 70,882,927 Calm common shares. The Calm shares will then be distributed to Zenabis's shareholders pro rata their interest in Zenabis. Upon completion of the spinout, Zenabis shareholders would own shares in two publicly traded companies on the TSX.
The spinout transaction will be effected pursuant to the arrangement provisions of the Business Corporations Act (BC) and must be approved by the BC Supreme Court and by the affirmative vote of two-thirds of Zenabis shareholders.
Under the Arrangement, the Company's current shareholders will receive Calm common shares by way of a share exchange, pursuant to which each existing common share of the Company will be exchanged for one new Zenabis common share (each, a "New Zenabis") and 0.1 of a Calm share. On completion of the Arrangement, Zenabis shareholders, option holders and warrant holders will maintain their interest in Zenabis and will acquire a proportionate interest in Calm. Upon completion of the Arrangement it is intended that Calm will have 70,882,927 common shares issued and outstanding. Zenabis currently has 708,829,273 issued and outstanding common shares.
Upon completion of the Arrangement, Shai Altman will be the CEO and President of Calm and Leo Benne will step in as the CEO and President Zenabis. Changes and additions to the management team may be made thereafter, as needed, as the new Calm Inc. company moves forward with its Cannabis 2.0 products, including beverages, edibles, chocolates, chewing gum, oils, vapes, gummies, and pet calming chewables. An independent auditor appraised the new Calm Cannabis 2.0 company to have a value of $140 million, or close to $2 per Calm share. The Arrangement is expected to close the end of December 2020 and is part of a corporate initiative to increase shareholder value for Zenabis shareholders.