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NHI Natunola Health Biosciences In

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Share Name Share Symbol Market Type
Natunola Health Biosciences In TSXV:NHI TSX Venture Common Stock
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Advitech and Natunola Enter Into a Merger Agreement to Execute Previously Announced Business Combination

30/06/2011 2:34pm

Marketwired Canada


Advitech Inc. ("Advitech" or the "Corporation") (TSX VENTURE:AVI) and Natunola
Health Biosciences Inc. ("Natunola") (TSX VENTURE:NHI) are pleased to announce
that, following their April 8, 2011 press release, they have entered into a
merger agreement to combine the business of both companies (the "Merger
Agreement") with the intent of creating a leading company in personal care and
health food ingredients. 


Pursuant to the Merger Agreement, Advitech will acquire all of the issued and
outstanding shares of Natunola by way of an amalgamation (the "Amalgamation")
between Natunola and 7894716 Canada Inc., a wholly-owned subsidiary of Advitech.
The Natunola shareholders will receive common shares of Advitech based on a
ratio of 4.75 common shares of Advitech (or 1.1875 common shares following a
proposed 4 to 1 consolidation of Advitech shares (see below)) for each common
share of Natunola. All outstanding options to acquire Natunola common shares
which are not exercised prior to the closing of the transaction will, subject to
TSX Venture Exchange ("TSX-V") policies, be exchanged for Advitech options on
the same terms. Following the Amalgamation, the Natunola shares will be delisted
from the TSX-V and Natunola will continue its activities as a wholly-owned
subsidiary of Advitech.


The completion of the transaction is subject to customary closing conditions
including TSX-V approvals as well as the approval of at least 66(2)/3 of the
votes cast, in person or by proxy, at a special meeting of Natunola shareholders
to be held to approve this transaction. It is expected that Natunola
shareholders holding around 14% of all issued and outstanding common shares of
Natunola will enter into lock-up agreements with Advitech to vote their common
shares in favour of the Amalgamation. A special meeting of Natunola shareholders
for the purposes of considering the transaction is expected to be held on August
3, 2011 and an information circular in connection with this transaction is
expected to be mailed to Natunola shareholders in early July.


Advitech will also hold a special meeting of its shareholders on August 3, 2011
during which Advitech shareholders will be asked to approve the consolidation of
its outstanding common shares on a 4 to 1 basis (the "Consolidation") and the
change of its name to Botaneco Corp. The management information circular for the
special meeting of Advitech shareholders will also be mailed in early July.


Under the Merger Agreement, Natunola has agreed that it will not solicit or
initiate any discussion concerning the pursuit of any other acquisition
proposals and has agreed to pay a termination fee of $250,000 to Advitech in
certain circumstances.


As a condition precedent to the transaction, Advitech intends to complete a
private placement, on an agency basis, of a minimum amount of $3,500,000 and
intends to issue a minimum of 87,500,000 units at a price of $0.04 per unit
($0.16 post Consolidation). Each unit is being comprised of one common share and
one half of one common share purchase warrant of Advitech. Each whole common
share purchase warrant will entitle its holder to acquire one additional common
share of Advitech at a price of $0.05 ($0.20 post Consolidation) for a period of
36 months following closing. 


Bloom Burton & Co. and Paradigm Capital Inc. (collectively, the "Agents") have
been retained by Advitech as agents for the purposes of the private placement.
They will be entitled to receive, upon completion of the merger transaction in
consideration for the services rendered as part of the private placement, a cash
fee equal to up to 7% of gross proceeds raised in connection with the private
placement and that number of warrants equal to up to 7% of the number of common
shares issued as part of the private placement. Such warrants will entitle their
holders to acquire common shares of Advitech at a price of $0.04 per unit ($0.16
post Consolidation) for a period of 24 months following closing. The Agents will
also receive a work fee of $100,000, payable in cash or in shares, at the option
of Advitech, within 10 days of the closing of the merger transaction. 


It is not expected that, further to the completion of the transaction, the
private placement and the consolidation, any person will own or exercise control
or direction over more than 10% of the issued and outstanding Advitech common
shares other than Avrio Ventures Limited Partnership ("Avrio") and AgeChem
Venture Fund L.P. ("AgeChem"). AgeChem and Avrio, which are related parties to
Advitech under Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions, have indicated they will be participating in
the private placement and that they may acquire, in the aggregate, 25% or more
of the units issued as part of the private placement.


It is contemplated that the Board of Directors of Advitech post-transaction
would consist of seven directors, five of which are to come from the existing
directors of Advitech, namely Mssrs. Michael Stangel, David D. Guebert, Louis
Lacasse, Aki Georgacacos and Ronald B. Gordon, and two nominees of Natunola,
namely Dr. Nam Fong Han and Mr. David Edwards whose appointment will also be
submitted to the vote of Advitech shareholders at the August 3 special meeting
of shareholders of Advitech. The management of the Advitech post-transaction
would consist of Michael Stangel, as President and Chief Executive Officer,
Murray Bruce, as Chief Financial Officer and Dr. Nam Fong Han, as Executive
Chairman and Chief Operating Officer.


The foregoing is summary only. Further details regarding the proposed
transaction are set out in the full text of the Merger Agreement which will be
filed by both parties on www.SEDAR.com and in the information circulars
distributed by both parties to their respective shareholders.


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 Biosciences 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(R) 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


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 or to complete the concurrent financing). 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.


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