Sproutly Canada Inc. (SPR:CSE; SRUTF:OTCQB) is shifting its strategy toward commercializing its proprietary APP Technology and away from cultivating cannabis, it announced in a news release.
The goal is to transform Sproutly into an "'asset light' technology model focused on generating revenues via technology licensing, ingredient supply agreements and partnership opportunities," the release explained. The firm would achieve this by leveraging the existing infrastructure and distribution networks of licensed producers selling its cannabis 2.0 products in Canada similar products elsewhere.
"This business transformation is yet another step towards streamlining our strategy to focus on the technology and what sets us apart," said Keith Dolo, who has stepped down as Sproutly's CEO and board member to be the strategic adviser to the board chairman.
The company already made a number of changes. To reduce cash burn, it significantly scaled back its cannabis growing component, which became cost prohibitive. It began cutting costs, like reducing its staff by about 75%.
Also, Sproutly appointed its chief science officer, Dr. Arup Sen, as the company CEO to carry out the business transformation plan. Sen also is the inventor of the APP technology and the CEO of Infusion Biosciences. Infusion Biosciences, Sproutly's largest shareholder, committed to investing up to an additional $855,000 in the company.
As for its beverage agreement with Moosehead Brewing, Sproutly is continuing discussions with the company about changing their 50/50 joint venture to a nonexclusive licensing or supply agreement for Infuz2O. This would benefit Sproutly in various ways, such as eliminating its need to invest further capital, diversifying its customer base and adding possible revenue streams.
With respect to its cultivation facility, Sproutly is looking into its options in that regard, including selling it.
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