Zoetic International PLC (LON:ZOE) said it has signed a deal with Path Investments PLC to sell its 75% interest in DT Ultravert (DTU), a method for hydrocarbon well stimulation and protection, as well as its nitrogen assets in Kansas.
The cannabidiol (CBD) products firm said under the deal Path will issue Zoetic with 15mln new shares together with warrants to subscribe for a further 15mln Path shares at 1.5p each at any time between the first and third anniversaries of the completion of the transaction.
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Path has also agreed to pay Zoetic royalties equal to 5% of all gross revenues derived from the DTU technology attributable to the 75% interest in perpetuity.
Zoetic said the transaction is expected to complete in the next two weeks and that the deal represented an “attractive transaction” for the company and its shareholders.
The firm added that the exit from its legacy natural resources business will help it achieve material cost savings during the current year compared to the year ended March 31, 2020..
"We are pleased to have agreed this transaction with Path Investments to divest our interest in DTU and Kansas nitrogen assets, whilst retaining an ongoing financial interest in the technology, as we continue to focus the company on its future as a vertically integrated CBD and hemp business. We are moving rapidly in implementing this strategy and believe that our shareholders will soon see the fruits of our efforts", Zoetic co-chief executive Trevor Taylor said in a statement.
The shares rose 0.7% to 4.7p in mid-morning trading on Wednesday.
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