Advitech Inc. and Natunola Health Biosciences Inc. Enter Discussions to Create a Leading Company in Personal Care and Health Food Ingredients

/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

QUÉBEC CITY AND WINCHESTER, ON, April 8 /CNW/ - Advitech Inc. (TSXV: AVI) ("Advitech") and Natunola Health Biosciences Inc. (TSXV: NHI) ("Natunola") are pleased to announce 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.

"This combination represents a pooling of the expertise of two emerging personal care and health food specialty-ingredient firms to capitalize on the operational strengths of collective management, sales/marketing, R&D and manufacturing teams. It will also provide significant synergies and cost savings, leveraging each company's strengths to better serve our customers with a unique, innovative product portfolio to better address market opportunities." said Michael Stangel, President & Chief Executive Officer of Advitech, Inc.

"The complementary technologies and global product distribution channels will greatly enhance shareholder value and establish the Resulting Entity as a leading provider of specialty ingredients addressing global opportunities in health, wellness and sustainability," said Dr. Nam Fong Han, President & Chief Executive Officer of Natunola Health Inc.

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.

The companies 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.

It is contemplated that the board of directors of the Resulting Entity would consist of 7 directors, 5 of which would be current directors of Advitech and 2 nominees of Natunola. The management of the Resulting Entity would consist of Michael Stangel, President and Chief Executive Officer of Advitech, as President and Chief Executive Officer, Dr. Nam Fong Han, President and Chief Executive Officer of Natunola, as Executive Chairman and Chief Operating Officer, and Murray Bruce, Chief Financial Officer of Advitech, as Chief Financial Officer.

There can be no assurance that the transaction contemplated above will be completed, or if completed, what the final terms will be.

About Advitech Inc.:

Advitech, which includes its subsidiary Botaneco Specialty Ingredients Inc. since November 20, 2009, is a health sciences and technology company developing, manufacturing and marketing 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. More information is available and can be accessed at www.advitech.com

About Natunola Health Bioscience Inc.:

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. www.natunola.com

About AgeChem:

The AgeChem Venture Fund, LP 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. 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. www.avrioventures.com

Some of the statements contained in the release are forward-looking statements, such as estimates and statements that describe the parties' future plans, objectives or goals, including words to the effect that they expect 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.

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.

Cautionary Statements:

This news release contains forward-looking statements and information ("forward looking statements") within the meaning of applicable securities laws relating to the proposal to complete the proposed plan of arrangement and associated transactions (including the private placement financing), including statements regarding the terms and conditions of the proposed plan of arrangement and associated transaction.  Readers are cautioned to not place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the proposed plan of arrangement and associated transactions, that the ultimate terms of the proposed plan of arrangement and associated transactions will differ from those that currently are contemplated, and that the proposed plan of arrangement and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law and neither Advitech nor Natunola does not undertakes any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.  The forward-looking statements contained in this document are expressly qualified by this cautionary statement. 

SOURCE Advitech Inc.

For further information:

Dr. Nam Fong Han
President & Chief Executive Officer
Natunola Health Biosciences Inc.
661, St Lawrence Street,
Winchester, Ontario.
K0C 2K0
Tel: (613) 774-9998
                Michael Stangel
President and Chief Executive Officer
Advitech Inc.
418-948-4084
215-604-0631
info@advitech.com

 

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