Jupiter Wellness, Inc. (NASDAQ:JUPW) revealed plans Monday to dividend its wholly-owned subsidiary, SRM Entertainment to its stockholders with Jupiter’s merger with Next Frontier Pharmaceuticals, Inc.
Each Jupiter Wellness stockholder will be entitled to approximately one share of SRM Entertainment common stock for every four shares of Jupiter Wellness common stock owned. The transaction is expected to be completed in the coming four months, assuming regulatory and stockholder approval.
In conjunction with the stock dividend, Jupiter Wellness intends for SRM Entertainment to raise up to $10 million through its own equity offering and seek the listing of its common stock on Nasdaq.
SRM Entertainment was acquired by Jupiter Wellness in December 2020 to expand its distribution platform of consumer products. Additionally, SRM Entertainment will grant the exclusive rights to distribute Jupiter Wellness products to its theme park customers worldwide for a period of five years.
“We believe this stock dividend will benefit our stockholders as we unlock the value of SRM Entertainment and create a pure play drug development company as part of our merger with Next Frontier Pharmaceuticals,” Brian John, Jupiter Wellness’ CEO stated. “Given the drug product and development pipeline of Next Frontier Pharmaceuticals, we believe SRM Entertainment is better suited as a standalone company to pursue its own growth opportunities. Jupiter Wellness, after the completion of its merger with Next Frontier Pharmaceuticals, will be able to solely focus on the commercialization of its FDA approved cannabinoid drug SYNDROS® and its drug development pipeline focused on oral dronabinol solutions.”
The company plans to provide further details of the stock dividend of SRM Entertainment including the definitive number of shares it will dividend as the transaction progresses.
Jupiter Wellness shares were trading 8.47% lower at 67 cents per share at the time of writing Monday.