Creative Edge Nutrition Planning Spin-Off of CEN Biotech; 420 Investor's Brochstein Responds
In a press release issued after the close Wednesday, Creative Edge Nutrition (OTC: FITX) disclosed its Board has approved a proposal to plan a spin-out of CEN Biotech, a Canadian subsidiary, to holders.
Upon closing of the deal, CEN will be an independent, publicly-traded company led by Creative Edge Nutrition Director Bill Chaaban. Chaaban will be named Chair, Pres and CEO.
The company's press release indicated "All current officers and directors of CEN Biotech Inc. will immediately resign from Creative Edge Nutrition, as Creative focuses its plans and operations on Nutrition under its new Chief Executive Officer, Mr. James Robinson, a noted entrepreneur in the dietary nutrition space."
Upon closing of the spin-out deal, all holders of Creative Edge Nutrition will retain shares in the name "while additionally getting shares in CEN Biotech Inc... The distribution of CEN Biotech Inc. shares will be on a pro rata basis to the Creative Edge Nutrition shareholders based on the number of shares of Creative Edge Nutrition shares owned by each shareholder."
As highlighted by the 420 Investor's Alan Brochstein, "It's not clear how much of CEN Bio is actually held by FITX, which ended its year in September and won't report its OTC disclosure until December."
When asked about the deal itself, Brochstein said, "FITX, which is typically controversial, has topped them all with a sudden announcement of a potential spin-out of its CEN Biotech project." Brochstein did, however, show some concern and shock related to the fact that "all of the officers and directors have immediately resigned from the pink-sheet listed company, a most unusual move.
"This is very different from what had been discussed all year - that the company would merge with RXNB, uplist and spin-out Creative Edge Nutrition," according to Brochstein.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.