Vystar Corp. (Vystar) (OTCQB Market: VYST) announced today that its Board of Directors has approved a plan to spin-off part of its RxAir air purification business as a separate, independent, publicly traded company.
WORCESTER, Mass., Oct. 16, 2019 (GLOBE NEWSWIRE) -- Vystar Corp. (Vystar) (OTCQB Market: VYST) announced today that its Board of Directors has approved a plan to spin-off part of its RxAir air purification business as a separate, independent, publicly traded company. Vystar desires to set record and ex-dividend dates shortly, complete the spin-off and commence trading of RxAir in the first part of 2020. This would be the first spin-off for Vystar; a holding company for Rotmans Furniture and Flooring, Fluid Energy Conversion, Nature’s Home Solutions, RxAir air purifiers and owner and creator of Vytex deproteinized natural rubber latex, and developer of environmentally friendly technologies and products.
Vystar expects that any plan will proceed as follows:
- Create a publicly traded subsidiary called RxAir, Inc. encompassing the UV400 air purifier product and related intellectual property (IP), tooling, websites and other assets, which will focus on the growth opportunities in the growing residential, healthcare and commercial markets.
- Contract with an outside entity which will control 51% interest in RxAir, Inc., with an investment of $3-$5 million in production, tooling, inventory, and operations needed to run RxAir.
- Vystar plans to award 39.1% of the RxAir shares as a pro-rata dividend to Vystar shareholders as of the designated record date.
- Retain 9.99% of RxAir shares for Vystar Corporation
- Vystar will retain all other currently held assets.
Vystar is currently entertaining offers as part of its fiduciary responsibility to shareholders in obtaining the best deal related to RxAir. Vystar has been in serious negotiations with a qualified healthcare group in manufacturing, and marketing for business-to-business (B2B) and business-to-consumer (B2C) products.
“We anticipate that this strategic initiative will enhance value for shareholders and attract new shareholders who will buy Vystar shares to reap the dividend. Investors generally appreciate an unexpected dividend bonus,” stated Steve Rotman, CEO of Vystar.
Vystar’s Board believes the spin-off would have multiple positive effects:
- Valuation – Vystar anticipates the new entity will have a market capitalization of $10 million based on capital, assets and market track record. Vystar shareholders would receive 39.1% of the shares with an anticipated valuation of approximately $3.9 million and Vystar would retain 9.99% of the shares valued at approximately $1 million. Vystar would retain remaining asset value in the RX3000 of approximately $900,000, totaling approximately $6 million -- a healthy profit for Vystar and its shareholders over the $900K Vystar recently paid for these specific RxAir assets.
- The Dividend – There generally are multiple positive effects from a dividend. Traditionally most shareholders will opt not to sell until after the ex-dividend date in order to receive the dividend since stock exchange rules require investors have their stock purchase completed (hold real shares) by the ex-dividend date, which is one business day before the record date. Vystar anticipates announcing the ex -dividend date in the next few weeks, where the ex-dividend date would be set 60 days following the announcement.
Among other things, the spin-off would be subject to finalization of the entity structure of the spun-off business, effectiveness of appropriate filings with the Securities and Exchange Commission, final approval of transaction terms from the Vystar Board of Directors, and other customary conditions. The spin-off does not require a vote by Vystar shareholders.
Vystar is eyeing a number of initiatives similar to this for certain classes of its assets and intellectual property relating to environmentally friendly product development.
About Vystar Corporation:
Based in Worcester, Mass., Vystar® Corp. (OTCQB: VYST) is the majority owner of Rotmans Furniture and Carpet and environmentally friendly technologies and products to improve lives, such as RxAir UV light air purification products, Fluid Energy Solutions and Vytex Natural Rubber Latex (NRL). Vystar is the exclusive creator of Vytex, a multi-patented, all-natural, raw material that contains significantly reduced levels of the proteins found in natural rubber latex and can be used in over 40,000 products. Vytex NRL is a 100% renewable resource, environmentally safe, “green” and fully biodegradable. Vystar is working with manufacturers across a broad range of consumer and medical products bringing Vytex NRL to market in adhesives, gloves, balloons, condoms, other medical devices and natural rubber latex foam mattresses, toppers, and pillows. For more information, visit vystarcorp.com/ or vytex.com.
Contacts:
Media: Julie Shepherd, Accentuate PR, 847 275 3643, Julie@accentuatepr.com
Investors: Steven Rotman, Vystar CEO, 508-791-9114, srotman@vytex.com
Forward-looking Statements: Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statements of VYST officials are “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as “believes,” “anticipates,” “intends,” “plans,” “expects,” and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future VYST actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and VYST has no specific intention to update these statements.
