Advitech Announces the Merger of its Operations with Botaneco, the Closing of a $2.5M Equity Financing and the Appointment of a New President and Chief Executive Officer
TSX VENTURE EXCHANGE: AVI /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Furthermore, Advitech is pleased to announce the appointment of
"The Transaction is very positive on several fronts for Advitech as it broadens the product portfolio and access-to-market, allows strengthening the management and sales teams and brings Avrio as a main shareholder with the clear vision to grow the Corporation to the next level", said
As part of the Transaction, Advitech has issued Avrio and SemBioSys a total of 28,099,003 post-Consolidation common shares, at a price of
Concurrently with the Transaction, Advitech completed the Equity Financing for gross proceeds of
Redemption of the AgeChem Warrants
Finally, as part of the Transaction, Advitech and AgeChem have also agreed to the redemption of 58,083,334 pre-Consolidation common share purchase warrants held by AgeChem, the value of which has been estimated at a total of
With the completion of the Transaction, the Equity Financing, and the Redemption of the AgeChem Warrants, the principal shareholders of Advitech are Avrio, holding 41.71%, and AgeChem, holding 21.70%, of all issued and outstanding common shares of Advitech. The new Board of Directors of Advitech consists of seven directors, of which two have been proposed by AgeChem and two by Avrio.
The Equity Financing and the Redemption of the AgeChem Warrants are subject to the final approval of the TSX-V in connection with the listing of the common shares issued as part of such transactions, which will be obtained upon fulfilment of customary conditions for this type of transactions. The securities issued as part of the Transaction, the Equity Financing and the Redemption of the AgeChem Warrants are all subject to a statutory four-month hold period.
Business plan following the Transaction ---------------------------------------
In line with the current focus of both Advitech and Botaneco prior to the Transaction, the resulting entity will be a manufacturer, developer and marketer of proprietary natural ingredients and formulations for oral and topical applications that have been clinically proven to be safe and effective for improving skin health and well being. The resulting entity will grow its business organically by leveraging the channels and products of each company through the efforts of a fully integrated organization, and externally by in-licensing/acquiring topical ingredients to broaden its portfolio and better serve its expanding customer base.
The resulting entity will offer a comprehensive portfolio of stand alone and/or companion active ingredients and specialty products to help its customers to differentiate their products with natural and scientifically supported ingredients. To this end, the plan of the resulting entity comprises the following objectives:
- Finalize the integration of the two entities in the first quarter of 2010 in order to achieve cost synergies while maintaining operations in Quebec City (administration and research and development), Calgary (manufacturing) and Bensalem, Pennsylvania (sales and formulation); - Leverage the capacity of the three technological platforms now owned by the Corporation and benefit from cross-selling opportunities. These platforms are XP-828L for immune mediated inflammatory disorders, IM for anti-aging and wound healing, and the Oleosome platform for the production of non-transgenic specialty ingredients for topical cosmetic, OTC, and Rx products within the natural personal care products sector. In the next few weeks, the Corporation plans to launch new products that have been developed using the assets of these platforms; - Further strengthen the existing management team to allow the resulting issuer to execute its business plan; and - Identify new M&A and product acquisition opportunities, aligned with the key strategic initiatives of the resulting entity. Management ----------
Following the Transaction,
As part of his remuneration package, Advitech issued to
Mr. Christian Labbé will continue to act as Vice-President and Chief Financial Officer of the Corporation. Mr. Labbé joined Advitech in 2007 as Financial Director. He has been appointed Vice-President and CFO in
Mr. Réjean Drouin, who was Vice-President of R&D of the Corporation before the Transaction, will continue to lead the Advitech's R&D program as Director of R&D.
Board of Directors ------------------
The new Board of Directors consists of
Pro forma financial highlights ------------------------------
For information purposes, the financial information for the combined entities is hereunder presented on a pro forma basis, prepared by the management of Advitech and Botaneco using the financial statements of Botaneco and Advitech for the 6-month period ended
Six-month Year ended period ended Statements of Loss ($Cdn) December 31, June 30, 2008 2009 (unaudited) (unaudited) Total Revenues 1,674,899 652,589 Gross margin 379,903 15,225 Operating expenses 4,492,486 2,440,966 Amortization 791,469 421,872 Interest and exchange loss 613,368 365,399 Net Loss (5,517,420) (3,213,012) As at As at Balance sheet ($Cdn) December 31, June 30, 2008 2009 (unaudited) (unaudited) Current assets 7,471,886 5,778,513 Property and equipment 2,904,613 2,630,317 Goodwill and intangible assets 314,285 2,648,405 Current liabilities 1,632,065 1,200,569 Convertible debentures 1,620,730 26,980 Long-term debt 1,978,761 2,467,353 Shareholders' Equity 5,459,228 7,362,333 Increase of common shares available under the Corporation's Stock ----------------------------------------------------------------- Option Plan -----------
Further to the Transaction, the Equity Financing and the Redemption of the AgeChem Warrants, the Board of Directors of the Corporation has approved the increase of post-Consolidation common shares available for issuance under the Corporation's current stock option plan from 675,000 to 7,200,000 post-Consolidation common shares which represents approximately 10% of the number of post-Consolidation issued and outstanding common shares, on a post-closing basis. This increase is subject to the approval of the TSX-V.
About Advitech --------------
Advitech is a health sciences and technology company with a mission to discover and commercialize proprietary and evidence-based natural health products. Effective and safe, these products play a role in the prevention of immune-mediated inflammatory disorders, such as psoriasis and inflammatory bowel disease. Advitech produces Dermylex(R) for the treatment of mild-to-moderate psoriasis. Advitech has drawn up a research program to develop new applications related to wound healing. This development is derived from both its XP-828L and IM technological platforms. More information is available and can be accessed at http://www.advitech.com/.
About Botaneco Specialty Ingredients Inc. -----------------------------------------
Botaneco is the global developer and marketer of innovative Oleosome-based ingredients to the personal care and OTC topical markets. As a technologically driven provider of high performance, proprietary Oleosome-based ingredients, Botaneco is committed to developing innovative ingredients that offer multifunctional, tangible and documented benefits to both formulators and consumers. Botaneco's head office and manufacturing facility is located in
About AgeChem -------------
The AgeChem Venture Fund L.P. is currently investing in companies developing therapeutics targeting age-related diseases. The range of diseases and chronic conditions associated with aging provides a breadth of attractive investment opportunities. AgeChem's principals have been active in the healthcare sector for over 15 years having made investments in several private and public entities. In addition to AgeChem, some of the principals are also managing the GeneChem Technologies Venture Fund L.P. and the GeneChemTherapeutics Venture Fund L.P. (http://www.genechem.com/).
About Avrio -----------
Avrio Ventures Limited Partnership is one of Canada's leading venture capital funds focused on investing in commercialization to growth stage companies developing food and/or agricultural technologies that address global challenges in the areas of health, wellness and sustainability. Avrio's portfolio includes a number of investments in the food processing, natural personal care and natural industrial products sectors. Avrio is a limited partnership created under the laws of Ontario, which is managed by its general partner, Avrio Ventures General Partner Ltd. The Avrio team also manages FCC Ventures, a fund focused on the agricultural sector. For more information about Avrio, visit http://www.avrioventures.com/.
About SemBioSys ---------------
SemBioSys, a corporation incorporated under the laws of
This press release contains forward-looking statements, which reflect the Corporation's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
%SEDAR: 00021006EFFor further information: Christian Labbé, Vice-President and Chief Financial Officer, Advitech Inc., (418) 686-7498, ext. 227