Natunola Releases Year Ended December 2010 Results

WINCHESTER, ON, April 29 /CNW/ - Natunola Health Biosciences Inc. (TSX-V:NHI) ("Natunola")  reports that the revenue for the year ending December 31, 2010 was $1,345,301, an increase of 7.0% or $87,490 versus the comparative period for 2009. The increase is due to increase in sales related to the Company's packaging business to a specific customer for the twelve months ended December 31, 2010 ($147,605) versus the comparative period for 2009 ($9,056). The increase is also due to increase in sales related to the Company's animal nutritional product business for the twelve months ended December 31, 2010 ($86,170) versus the comparative period for 2009 ($14,784). The sales for the Company's flax product lines decreased by 14.6% or $93,687 for the twelve months ended December 31, 2010 versus the comparative period for 2009 (December 31, 2010 - $547,415; December 31, 2009 - $641,102). The sales for the Company's personal care product lines decreased slightly by 5.4% or $32,085 for the twelve months ended December 31, 2010 versus the comparative period for 2009 (December 31, 2010 - $560,784; December 31, 2009 - $592,869). As a result, the Company recorded a net loss of -$378,816 or -$0.02 per share the period ended December 31, 2010 versus a loss of -$394,983 or -$0.03 per share for the comparative period for 2009.

Gross margins decreased by 9.5% for the year ended December 31, 2010 versus the comparative period for 2009 (December 31, 2010 - 42.2%; December 31, 2009 - 51.7%). The decrease is due to lower margin sales related to the Company's packaging business for the year ended December 31, 2010 versus the comparative period for 2009.

General expenses were 78.4% of the sales for the twelve months ended December 31, 2010 versus 95.5% for the same period for 2009. This percentage decrease is due to the general reduction of staff and a 2010 foreign exchange loss of $11,071 versus a foreign exchange loss of $36,639 for 2009.

On March 5, 2011, the Company accepted, in principle, both an offer of financing and a plan of arrangement offer as follows:

Financing Offer

Avrio Ventures Limited Partnership ("Avrio") offered to lend the Company $500,000 under the following terms:

The loan will be secured by a subordinated debenture bearing interest at a rate of 10% per annum.  The debenture will be subordinated to current financial arrangements with the Company's banks. There is an additional Payment In Kind ("PIK") at the rate of 5% per annum which shall accrue during the term of the loan and shall be added to the principal amount of the loan on a monthly basis. 

This PIK shall be accrued and added to the principal amount on a monthly basis and shall be due and payable on the maturity date.  Security for the debenture includes all present and acquired property of the Company and its' subsidiaries.

The term of the loan will be 24 months with maturity being 24 months after the initial disbursement date.  In addition the loan will be convertible to common shares of the Company at any time after October 31, 2011 at a price to be determined.   There is no option for prepayment of the loan.  Debenture issue costs are estimated to be $32,500.

The offer was finalized and funds of $500,000 less expenses of $33,928 were advanced on March 31, 2011.

Plan of Arrangement

The Company ("Natunola") and Advitech Inc.  ("Advitech") announced on April 8, 2011 that they have entered into discussions, under a letter of intent, with the objective to create a leading company in personal care and health food ingredients (the "Resulting Entity").

The Resulting Entity would focus on developing, manufacturing and marketing naturally derived, value added specialty ingredients and health food products based on their proprietary agricultural technology platforms. Both Advitech and Natunola believe that the entity combining their activities will benefit from additional synergies and cost savings, strengthen its competitive position and create an entity with enhanced visibility in the market place.

It is currently expected that the transaction would be conducted by way of a plan of arrangement between Natunola and a newly created wholly-owned subsidiary of Advitech pursuant to which, Natunola shareholders would receive common shares of Advitech, which would continue as the resulting entity, based on a ratio of 4.75 common shares of Advitech for one common share of Natunola.  The shareholders of Advitech would hold, on a non-diluted basis and excluding the securities to be issued as part of the concurrent private placement described below, 58.5% of the common shares of the Resulting Entity while the shareholders of Natunola would hold 41.5% of the common shares of the Resulting Entity.

Natunola and Advitech are currently undertaking a mutual due diligence and the preparation of a definitive transaction agreement which will be executed once the due diligence is completed and the final terms of the proposed transaction approved by the board of directors of each company.

The closing of the transaction is expected to occur during the second quarter of 2011 and will be subject, among other conditions, to the completion of a financing for the implementation of the business plan of the Resulting Entity by way of private placement for a minimum amount of 5 million dollars and to securing all required shareholders and regulatory approvals to implement its terms.  Bloom Burton & Co. Inc. will act as financial advisor in connection with the private placement in which AgeChem and Avrio Ventures, the principal shareholders of Advitech have indicated they will be participating.  The terms of the private placement will be determined in the context of the market and in compliance with the policies of the TSX-V.

"Shareholder value will be greatly enhanced by the new financing, the complementary technologies between Natunola and Advitech, and the global product distribution channels. The Resulting Entity will be a leading provider of specialty ingredients addressing global opportunities in health, wellness and sustainability," said Dr. Nam Fong Han, President & CEO of Natunola Health Inc.

About the Company:

Natunola and its manufacturing plant are located in Winchester, Ontario. Natunola  is a manufacturer and researcher in the field of flax seed derived omega -3 fatty acids, flax protein, flax lignans, specialty natural products, bio-nutrients and functional supplements for human and animal care markets. Natunola also produces canola oil gels and other natural ingredients for the cosmetic and personal care industry. Natunola has a retail health product line under the brand name of Natunola® health's delight. Natunola was the winner for the National Canadian Agri-Food Award of Excellence for Innovation for the year 2008.

Some of the statements contained in the release are forward-looking statements, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

SOURCE Natunola Health Biosciences Inc.

For further information:

Dr. Nam Fong Han
President & CEO
Natunola Health Biosciences Inc.
661, St Lawrence Street,
Winchester, Ontario.
K0C 2K0
Tel (613) 774-9998

Profil de l'entreprise

Natunola Health Biosciences Inc.

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