Mondias Natural Products Inc. specializing in evidence-based natural products for the healthcare and bio-agriculture markets and Tetra Bio-Pharma Inc. announce the signing of a binding letter of intent pursuant to which the Company will acquire all of the issued and outstanding shares of its subsidiary Lumiera Health Innovation Inc., a company providing natural health products and over-the-counter products for the chronic pain and inflammation markets.
Mondias will acquire Lumiera for a purchase price that is based on a projected revenue valuation of the Lumiera business, with a minimum purchase price of $1 million and a maximum purchase price of $1.5 million that will be finalized at the time of entering into a definitive agreement. The purchase price for the Proposed Transaction will be satisfied by the issuance of Mondias common shares using a stock price of $0.08 per share being the closing price of the Mondias common shares on the TSX Venture Exchange the day prior to this press release. It would represent a minimum of 12,500,000 and a maximum of 18,750,000 common shares respectively. Based on the actual issued and outstanding common shares, it will represent between 16.5% and 23% of the Company upon closing, without considering all the liabilities conversion in common shares as described below.
The letter of intent contemplates the negotiation and execution of a binding definitive agreement (the “Definitive Agreement”), and completion of the Proposed Transaction remains subject to a number of closing conditions, some of which are customary, including the approval of the Proposed Transaction by the Mondias shareholders, the signature by Lumiera of a convertible debenture facility for aggregate gross proceeds of approximately $2 million, on terms satisfactory to Lumiera and Tetra, which facility will be assumed by Mondias upon closing of the Proposed Transaction, the completion by Mondias of an equity financing for gross proceeds of at least three hundred and fifty thousand dollars ($350k) to finance the development of the Lumiera natural health products, including the Holizen brand, and the new sleep aid product Bazzics, the conversion of preferred shares, certain debentures, loans and fees of Mondias in Mondias common shares upon closing of the Proposed Transaction and the receipt of regulatory approvals including that of the TSXV. Subject to meeting the closing conditions, the Proposed Transaction is expected to close on or about September 14, 2020.
The Proposed Transaction is highly complementary and further positions Mondias for success by adding new clinically proven solutions in natural health products as well as a pain relief solution in larger addressable markets (North America and Worldwide). Lumiera also comes with an experienced team in pharmaceutical and natural products commercialization (manufacturing, sales & marketing, commercial operations), as well as with products in commercialization phases assorted with an attractive products pipeline.
“Lumiera offers a scalable solutions platform, with a broad range of product development capabilities within the global topical pain relief market valued at $7.5B with a projected value of $13.2B in 2025 (Pain Management Drug Report, 2018) ,” said Mario Paradis, CFO of Mondias. “The acquisition combined with the debt financing will allow us to play a much broader role in the customer value chain, leveraging our collective capabilities with an expanded set of offerings. It also opens up an important window on innovation and enhances our capabilities to develop new nutraceutical products.”
Kevin Roland, CEO of Lumiera said, “We are delighted with this exciting development by which we will be delivering additional value in a rapidly developing field, to our shareholders. To have achieved this will be a credit to the whole team”.
“We are thrilled that the Lumiera business will have an opportunity to grow much faster in the hands of a team focused on the natural healthcare products. This transaction will enable Mondias to expand its addressable markets to play a broader role in natural health products industry which will ultimately benefit all stakeholders” said Bill Cheliak , Chairman of the board of directors of Tetra.
The proposed transaction may be considered as non-arm’s length under the policies of the TSXV due to the fact that Mr. Guy Chamberland, the CEO and Chief Regulatory Officer as well as a director of Tetra, also owns, through his holding company, more than 10% of the common shares of Mondias. Mr. Chamberland is not a director or officer of Lumiera or Mondias, and he did not participate in the negotiations of the letter of intent on behalf of Tetra or Mondias. In addition, Mr. Chamberland will not vote the shares of Mondias held by his holding company in connection with the shareholders’ resolution to approve the transaction that will be proposed at the upcoming meeting. In addition, on behalf of Tetra, the proposed transaction was approved by the members of the board of directors of Tetra who had no interest in the proposed transaction and Mr. Chamberland recused himself from the deliberations and from the approval of the proposed transaction. There is no finder fee payable in regard of this transaction. Both of the companies will comply with the TSXV policies and rules under the TSX Company Manual, as applicable.
Financial information about Lumiera
As of April 30, 2020, the total assets was $42,086, total liabilities of $26,081, shareholder equity including a loan from the parent company of $16,005. There was no revenues for the five-month period ended April 30, 2020 and the net loss for the five-month period was $245,904. All these numbers were not audited. Lumiera main assets consists of intangible assets and intellectual property of new clinically proven solutions in natural health products as well as a pain relief solution in larger addressable markets. Lumiera also comes with an experienced team in pharmaceutical and natural products commercialization (manufacturing, sales & marketing, commercial operations), as well as with products in commercialization phases assorted with an attractive products pipeline.
Mondias specializes in the commercialization and development of evidence-based botanical products for the healthcare, bio-agriculture and organic markets. The company sells both oral and topical botanical agents to help manage unmet medical needs through its Holizen Laboratories division. Mondias is also developing botanical-based specialty fertilizers for use on household plants, lawns and golf courses and in urban gardens, nurseries, commercial greenhouses and to indoor cannabis growers, in collaboration with McGill’s Faculty of Agricultural and Environmental Sciences. For more information, visit: www.mondias.ca
Lumiera Health Innovation is a Canadian-based natural health product company, aiming to help improve people’s lives by delivering innovative health products inspired by nature. The company is developing and commercializing a unique portfolio of products acting on the endocannabinoid system and providing innovative solutions for chronic pain and inflammation. As a pioneer in the health and pain management innovation space, the Lumiera brand is rooted in the core brand values of science, nature and compassion. Passionate about making people feel better, we deliver trustworthy and scientifically proven solutions that work with the body’s own system.
For more information visit Lumiera.ca
Tetra Bio-Pharma is a biopharmaceutical leader in cannabinoid-based drug discovery and development with a Health Canada approved, and FDA reviewed and approved, clinical program aimed at bringing novel prescription drugs and treatments to patients and their healthcare providers. The Company has several subsidiaries engaged in the development of an advanced and growing pipeline of Bio Pharmaceuticals, Natural Health and Veterinary Products containing cannabis and other medicinal plant-based elements. With patients at the core of what we do, Tetra Bio-Pharma is focused on providing rigorous scientific validation and safety data required for inclusion into the existing bio pharma industry by regulators, physicians and insurance companies.
For more information visit: www.tetrabiopharma.com