On September 18, 2023, Neptune Wellness Solutions Inc. (NASDAQ: NEPT), a consumer-packaged goods company, announced that its Board of Directors had approved a strategic plan to spin out a majority of its equity interest in Sprout Organics, an organic baby food and toddler brand, to Neptune shareholders. This decision followed the exchange of existing Sprout debt for equity with Morgan Stanley, as announced on August 17, 2023. Post-spinout, Neptune intended to retain a 10-15% interest in Sprout.

The spinout aimed to reduce Neptune's operating costs, cash requirements, and debt exposure, thereby improving the company's overall financial position and cash flows. The completion of the transaction remained subject to several conditions, including legal and tax analyses, financial evaluations, regulatory approvals, and the listing of Sprout shares on a stock exchange. Neptune also reserved the right to abandon the transaction if market conditions or investor interest changed or if a better opportunity emerged.

Neptune engaged legal advisors to navigate the complexities of the spinout, ensuring compliance with the U.S. Securities Act and state securities laws. Further details of the proposed spinout were to be provided as they became available. The company continued to explore other strategic options to maximize shareholder value, including asset monetization and strategic partnerships.