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Empower Clinics to sell its legacy cannabis assets

Empower Clinics Inc (CSE:CBDT) (FRA:8EC) (OTCQB:EPWCF) said it has signed a non-binding term sheet to enter into an agreement that would allow the company to divest of its legacy cannabis assets and fully focus on its integrated healthcare business. The company said the associated non-binding agreement outlines that Andrea Klein and Dustin Klein (together the “Kleins”) will acquire 100% of Sun Valley Health Holdings LLC, Sun Valley Health Franchising LLC, Sun Valley Health LLC, Sun Valley Health West LLC, Sun Valley Health Tucson LLC, Sun Valley Health Mesa LLC, Sun Valley Alternative Health Centers NV LLC, and all subsidiaries. “This transaction will allow Empower to complete the divestment of its legacy cannabis assets and focus on its integrated healthcare vision,” said Empower CEO Steven McAuley in a statement. READ: Empower Clinics to partner with Tabula Rasa HealthCare to offer coronavirus and flu home testing services “We also expect this divestment to allow Empower to engage with a different breadth of partners – such as banks, auditors and advertising companies – who had restrictions against engaging companies in the cannabis space,” McAuley added. Empower said the structure of the agreement is on a cash-free, debt-free basis with consideration of US$1 million to be settled by the transfer from the Kleins to, or as directed by the seller, of such number of common shares of Empower equal to US$1 million divided by the US dollar equivalent (based on the Bank of Canada daily exchange rate for the conversion of Canadian dollars to US dollars) of the volume-weighted average trading price of the shares on the Canadian Securities Exchange for the 10 trading days ending on the date that is two business days prior to the date of closing of the acquisition. Completion of the transaction is subject to customary closing conditions, including completion of due diligence, negotiation of definitive agreements, and receipt of all necessary approvals. If such conditions are not satisfied, the company said it is possible that the proposed transaction will not be completed. The parties anticipate completing the definitive agreements within the next 30 to 60 days. Empower said the non-binding transaction will permit it to robustly pursue its integrated health plan through initiatives such as the national clinic expansion and Kai Care Testing Solutions, along with an aggressive acquisition strategy. Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham