TEXAS: The CEO of Alternate Health CEO this week provided further details about the company’s spinoff plans and key milestones for the upcoming quarters.
“The Company has been very active this year adjusting our business for revenue generation and growth, including developing our potential spinoff plan for Alternate Health’s non-cannabis assets,” says Dr. Michael Murphy, Chairman and CEO of Alternate Health. “We are excited about this plan, but we want to assure our shareholders that we will only act on this plan when the right conditions are met across the business.”
According to a company press release, management has received board approval to explore a spinoff plan for the company’s non-cannabis assets; it is estimated to take at least three to four months to complete this due diligence process. In the meantime, there are at least four key milestones Alternate Heath plans to meet before acting, including:
- Laboratory referrals back above 10,000 samples per month and growing.
- Our payment engine for non-cannabis transactions has at least 2 contracts with testing and implementation underway.
- Cannabis payment engine fully integrated to the CanaPass/StatePass system and revenue has started.
- Recreational cannabis sales have started with a good business plan and prospects for future growth.
Should the above criteria be met, and final decision made, the Board expects to seek shareholder approval and that all shareholders would receive their pro rata share of ownership in both companies, on a 1:1 ratio. Tax implications must also be considered prior to a final decision being taken.
Alternate Health’s focus continues to be on maintaining shareholder value, therefore: Only equity dilution to be based on any capital raise associated with the Newco offering.
Part of any newly raised capital would be used to hire management to oversee and expand each new primary division in the company.
No decision has been made on the final division of company assets between the NewCo and Alternate Health. In particular, Alternate Health is exploring different options for the Company’s laboratory business. The Lab could move to the non-cannabis NewCo or stay in Alternate Health. Another option could see the Lab move to the NewCo and pay a long-term royalty to Alternate Health.
“We believe the proposed spinoff of the Company’s non-cannabis assets is the best plan to maximize the value and revenue potential of the Company’s assets,” says Dr. Murphy. “The Board will be busy performing our due diligence and will update shareholders in time.”
Independent Director Resigns
The Company also announces a change to Alternate Health’s Board of Directors. Kristin Taylor has tendered her resignation as an independent director to focus on her full-time career obligations. The company is actively looking for an independent director to fill Ms. Taylor’s seat on the Board.