Sunniva sells NGS for $9 million
Sunniva Inc. (CSE: SNN, OTCQB:SNNVF) announced the sale of Natural Health Services (NGS) to The Clinic Network Canada (TCNC) for CAD $9.0 million.
Payment will be CAD $4.5 million cash and 4.5 million preferred shares of TCNC, one of Canada's largest providers of 'out-of-hospital' chronic pain management services. Subject to working capital adjustments, the purchase is expected in the fourth quarter of 2019.
"The sale of NHS to TCNC will complete the previously announced disposition of our Canadian operating assets and is in line with our previously announced strategy of focusing on the advancement of our California assets and expanding our sales and distribution infrastructure with in the state," said Dr. Anthony Holler, CEO of Sunniva Inc. "The cash proceeds from this sale will be directed towards the completion of the Cathedral City facility and the ongoing development of our cannabis brands in California."
I spoke to management following this news and I believe this is a positive outcome for SNN. The price and timing suit SNN’s needs and I anticipate the closing will occur as indicated. Once the Okanagan Falls and NHS sales close, SNN will be entirely a U.S./California operator and I expect they will be effectively operating this way before the year is out.
SNN also reported the closing of the third tranche of the non-brokered private placement of CAD $325,000. This is important because the funds will be used to provide short term working capital for operations in California, capital costs at the Sunniva California Campus and general corporate purposes.
It seems SNN is suddenly back on the right track although I note the Okanagan Falls closing has not happened yet. I am in receipt of information from unofficial sources that the closing is still in process and it is a matter of completing the final, closing documents. Otherwise, it seems, SNN has transitioned to a system of producing milestone-type events, setting realistic deadlines and meeting them. As the chart above indicates, the market seems to be paying attention.