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East West Petroleum (TSX-V: EW) CEO David Sidoo on Corporate Restructuring & Acquisition of Cannabis Company Juva Life

July 23, 2018

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of East West Petroleum (TSX-V: EW)(OTC: EWPMF), Mr. David Sidoo. David, long time no hear. How have you been?

David Sidoo: I've been really busy, Gerardo, trying to figure out how to restructure some of the companies that I'm involved in, and see what's hot out there in the marketplace right now and areas where we can raise some capital, and look at some company builders out there. I was looking quite seriously the last six to seven months looking at several deals for East West, and we landed on a project that I think is really good. It's going give a lot of value to shareholders here in the short term.

Gerardo Del Real: Let's talk about the headline. The headline reads, "East West Petroleum Announces Corporate Restructuring and Letter of Intent to Acquire Juva Life."

David Sidoo: Correct, correct.

Gerardo Del Real: Can you explain the deal for me, Dave?

David Sidoo: Sure, sure. The East West shareholders will continue to retain their pro-rata shares in East West Inc., which will be spun off with the oil and gas assets and become a privately held company with the shareholders currently that own East West. So there will remain 89.5 millions shares will remain in a private company, Gerardo, with the New Zealand assets and the Romanian assets in them. We're going to spin out $4 million dollars of cash into a new co., which is going to be called Juva. Each East West shareholder will get 1 share for every 10 shares of East West that they own, in the new corporation. That will take about 60 to 90 days for the transaction to complete, so the stock will be halted for 90 days, and come back to trade in October.

Juva's a cannabis company that's in three areas of the cannabis business that are very important, and has a strong management team that's built companies before in this space. It's in a large market in the United States in California. All the check boxes it checked off for me was a management team that's done it before, the sector that's quite hot right now, and three different verticals in one company. If you look at a lot of cannabis companies out there, they're either a grower, Gerardo, they're either a processor, they either have dispensaries, or they either do scientific work in medical research in cannabis. Juva has all three aspects.

They're going to raise another $7.5 million dollars at $0.35 into Juva Labs. That's the private company. I'm going to encourage any East West shareholders, if they want to participate in that it's a private company that will be vended into the pub co., and it'll be public sometime in October. I think with the assets they have I believe the valuation will trade quite high compared to some other companies out there. So what you’ll end up with, you'll retain all your shares of East West in the private co., plus all the oil and gas assets, and you'll get 1 share for every 10 of the new company. I believe that new company will be financed. The deal is they have to raise another $7.5 million dollars at $0.35, so they'll have $11.5 million dollars in the bank with 90 million shares outstanding in the new entity called Juva, and three different verticals.

They'll have the growing facility that they have in California, in Stockton. They'll have a dispensary that's doing about $2.5 to $3 million dollars in revenue right now. They have a lab that actually studies and researches this with top notch people in the industry. I've sent you a deck, so you can take a look at them, Gerardo, and see what type of people that are from Stanford and Berkeley, just brilliant guys around this whole cannabis space. So, all three of those entities will be in the new Juva company.

Basically, we're staying the same as far EW, we're just going to be private. Now what I'm going to do with those assets. We're going to try and monetize those assets that we have in Romania and in New Zealand to see if we can garner some cash from those. If we can't, we'll continue to fund those privately, and see how NIS does in their drill program here in August and September, and how the water flood works at TAG. But what I would like to do is create $10 to $15 million dollars in cash in that private co., and potentially dividend that cash out to the shareholders, or do another deal.

Gerardo Del Real: Excellent. Well, it sounds like a lot of moving parts. I'd love to have you back on, David, as the deal progresses and you get closer to actually closing on this because I know things change when you have this many moving parts sometimes. I'd love for you to be able to come back and just explain the progress here in the next month or two if that works.

David Sidoo: No, that's perfect. But just in simplicity forms, we're going to all retain our shares of East West Inc. and the oil and gas assets, and we're going to get a bonus share in this new company that's going to be public in October. That's as simple as I can explain it right now.

Gerardo Del Real: Perfect. David, thank you very much for your time.

David Sidoo: Okay, Gerardo, you too.

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