Zoetic Interntnl PLC - Sale of DTU Interest and Kansas Nitrogen Assets
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Article 7 under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
("Zoetic" or the "Company")
Sale of DT Ultravert Interest and Kansas Nitrogen Assets
The Transaction is the latest element in Zoetic's strategy to exit from its historic natural resources business and transition to a focused CBD and hemp business.
Path has concurrently made its own announcement of the Transaction, a copy of which can be viewed at http://www.rns-pdf.londonstockexchange.com/rns/0032O_1-2020-5-26.pdf (the "Path Announcement"). Neither Zoetic nor any of its directors, officers or employees accepts any responsibility or liability for the Path Announcement, which is the sole responsibility of Path and which is appended for information only. The Path Announcement does not form part of, and is not incorporated into, this announcement by Zoetic.
Terms of the Transaction
The consideration for the Transaction will be satisfied by the issue by Path to Zoetic of 15,000,000 new ordinary shares of
Additionally, Path has agreed to pay, in perpetuity, to Zoetic a royalty equal to 5% of all gross revenues received by Path that are derived from DTU and attributable to the 75% interest being sold, accruing from receipt of first revenues although not payable until 12 months thereafter (the "Royalty"). Following such period of twelve months, the Royalty payments will be settled quarterly, with payments being made at the end of the quarter in which Path earns revenue. For the avoidance of doubt, Path has no obligation to make a Royalty payment to Zoetic unless it has received the revenue payment from its own customers.
The Royalty payments due until the fifth anniversary of completion, at Path's discretion, may be settled as to 50% by the issue of new Path Shares, in which case the value of those Path Shares will be based on the Volume Weighted Average Price over the 10 business days prior to the date of issue. Thereafter Royalty payments due will be settled fully in cash.
Zoetic will enter into a lock-in agreement in respect of the new Path Shares issued as consideration for the Transaction or through any exercise of Warrants for a period of 12 months from the date of completion. Path Shares are currently suspended from trading on the Main Market of the
Completion of the Transaction, which is conditional upon the completion of certain procedural and commercial matters, is expected to occur in the next two weeks following fulfilment of such conditions and a further announcement will be made when completion occurs. The APA contains normal commercial terms including certain warranties and indemnities on both sides.
The Board believes that a combination of the potential upside from the 15,000,000 Path Shares, the Warrants and the Royalty, cost savings and the strategic benefits of the Transaction mean that this is an attractive transaction for Zoetic and its shareholders. The Board believes it will achieve material cost savings during the current financial year compared to the year to
Trevor Taylor, Co-CEO
This information is provided by RNS, the news service of the
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