Cannabis Sativa, Inc. Retires $3 Million in Debt
July 01, 2015 at 13:21 PM EDT
MESQUITE, NV / ACCESSWIRE / July 1, 2015 / Cannabis Sativa, Inc. (OTCQB:CBDS) (referred to collectively with its subsidiaries as "CBDS" or the "Company") has negotiated retirement of approximately $3 million in debt owed to its Chairman Steve Kubby in exchange for 1.5 million shares of the Company's Series A convertible preferred stock. The conversion feature allows Mr. Kubby to exchange his preferred stock for the Company's common stock on a one to one basis at the end of a two year holding period or at the time a spinoff of Kush is effected, whichever occurs first.
Coinciding today with the retirement of debt in exchange for the preferred stock, the CBDS Board of Directors also voted affirmatively to begin the process of effecting a spinoff of Kush as a separate fully reporting public entity. At the culmination of the spinoff, Steve Kubby will receive 51% of the Kush common stock as a result of exchanging his 1.5 million shares of convertible preferred stock and based on what he also would receive on a pro rata basis as a shareholder of CBDS common stock. CBDS will retain ownership of 9% of Kush, while 40% of Kush shares will be distributed as a stock dividend to all existing CBDS shareholders on the Company's books at the time of the record date. CBDS will incur the costs of the spinoff, including the filing of a registration statement covering the shares that will be distributed. Additionally, as part of the spinoff, the Company will issue Kush 500,000 shares of CBDS common stock in exchange for Kush's current over 81% membership interest in Kubby Patents & Licenses, LLC ("KPAL"), which owns intellectual property on plant strains, formulas, recipes, delivery systems, and on which patents have been applied (the "KPAL Technology"). The Company will grant Kush a free, perpetual, non-exclusive license to the use of product and technology to which the License Agreements relate and to which the KPAL Technology relates.
"Spinning Kush off as a separate public company removes $3 million in debt from the balance sheet for CBDS, while providing every CBDS shareholder with shares in a valuable new company. The new Kush will be a publicly traded company, will retain former US Senator Mike Gravel as our President and CEO, and will have over $1 million in assets. I believe that Kush will quickly become a major player in the emerging cannabis industry. This is a huge three way win for CBDS, Kush and our investors," said CBDS chairman, Steve Kubby.
Cannabis Sativa, Inc. is engaged through its recently acquired subsidiary, Kush, in the research, development and licensing of specialized natural cannabis products, including cannabis formulas, edibles, topicals, strains, recipes and delivery systems. CBDS also offers the Skin Garden line of cosmetic products through its subsidiary, Wild Earth Naturals, which are designed to use organic and natural ingredients, including hemp seed oil, to benefit inner wellbeing as well as outward appearance.
This press release contains "forward-looking statements." Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.
SOURCE: Cannabis Sativa, Inc.