Relevium Technologies Inc. (TSXV:RLV, OTCQB:RLLVF and Frankfurt:6BX) (the “Company” or “Relevium”), is pleased to announce it has executed a letter of intent to acquire a Montreal based biopharma contract manufacturing company through its wholly owned subsidiary BGX e-Health LLC. The transaction is subject to customary due diligence and the parties have agreed to keep the vendors information confidential until such a time when the definitive agreement is executed.
The target of the transaction is a Montreal based Biopharma company that manufactures for private label, white label and for its own brands of over the counter health products sold in Canada and the US.
The acquisition of the target represents a strategic vertical integration for BGX E-Health, and it is forecasted to have a material impact on the subsidiary’s revenues and a significant increase in gross margins, while providing at the same time immediate access to lucrative news opportunities. The addition of the target will also allow the company to pursue private label solutions in North America and its laboratories will enable the company to conduct research and development for new products.
Proposed terms of the LOI
Subject to customary due diligence, board and TSX Venture approval, the Company intends to close the transaction within 90 days from the date of the definitive agreement. An initial payment of 150,000$ in shares and 100,000$ in cash will be done at closing, with an earnout (the “Earnout”) bonus of $2,500,000 in shares vesting over a period of three reference years (20/30/50) and based on specific revenue and EBITDA targets. The final terms and conditions of the transaction will be outlined at the execution of a definitive agreement. The preliminary terms of the earnout include:
- First Year: Vendor will be entitled to 20% or $500,000 upon meting the forecasted targets for revenue and EBITDA for the first reference 12-month period.
- Second Year: Vendor will be entitled to 30% or $750,000 upon meeting the forecasted targets for revenue and EBITDA for the second reference 12-month period.
- Third Year: Vendor will be entitled to 50% or $1,250,000 upon meeting the forecasted targets for revenue and EBITDA for the third reference 12-month period.
Aurelio Useche, CEO of Relevium Technologies stated: “The proposed acquisition is not only of strategic importance to BGX, but also it is accretive in terms of vertical integration, revenue growth, gross margins and EBITDA. The proposed acquisition is expected to consolidate the manufacturing of all-natural products of future brand acquisitions, thus establishing in Montreal an important manufacturing foothold.”
INFORMATION UPDATE ON NEWS RELEASE REGARDING LOI WITH NEWSCOPE
On October 29, 2019 the Company disseminated a news release announcing it had received a letter of intent (the “LOI”) to roll its interest in wholly owned subsidiary BGX e-Health LLC into Newscope Capital Corporation (“Newscope”).
Newscope Capital Corporation is an arms’ length company incorporated under the laws of British Columbia and it is seeking to become an aggregator in the wellness space, including CBD and hemp. The bona fide letter of intent to acquire BGX E-Health LLC, represents the first major transaction for Newscope, which is expected to complete its listing on the CSE during the first quarter of 2020.
As described in the news release dated October 29, 2019, the preliminary terms of the LOI require Relevium Technologies to roll its interest in BGX E-Health LLC into Newscope (the “RTO”) for a total estimated transaction value $10 million, a transaction that is subject to the completion mutual due diligence. Newscope will issue an initial deposit of $500,000 in cash upon completion of the due diligence period and execution of a binding agreement. The total proposed transaction includes the business, its assets and liabilities, intellectual property and certain key agreements currently under consideration and review by management. The arm’s length offer has not been validated by an independent valuation contractor.
The foregoing transactions are subject to regulatory approvals. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Relevium Technologies
Relevium is a publicly traded company that operates in the health and wellness industry, including legal cannabis, with a primary focus on online distribution. The principal business of the Company is the identification, evaluation, acquisition and operation of brands and businesses in the health and wellness markets and medical cannabis. The Company pursues its business strategy through an acquisition and partnership model in a holistic approach to encompass a wide range of health and wellness consumer products. Relevium operates through two wholly owned subsidiaries:
BGX E-Health LLC (BGX), based in Orlando, Florida, markets dietary supplements, nutraceuticals, sports nutrition and cosmeceuticals primarily through its Bioganix® brand portfolio in the US and Europe. Relevium’s premium brands are sold at some of the world’s largest retailers including Walmart.com and Amazon.com.
Biocannabix Health Corporation (BCX), based in Montreal, Quebec, is a biopharma nutraceutical company focused on delivering pediatric endo-medicinal nutraceuticals for cannabinoid therapy.
Cautionary Note Regarding Forward-Looking Statements
This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian and United States securities laws. All statements in this news release, other than statements of historical facts, including statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are forward-looking statements and contain forward-looking information. Generally, forward- looking statements and information can be identified using forward-looking terminology such as “intends” or “anticipates”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, or “would” occur. Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this press release. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial outlook that are incorporated by reference herein, except in accordance with applicable securities laws. We seek to rely on the applicable safe harbor.
On Behalf of the Board of Directors
RELEVIUM TECHNOLOGIES INC.
President and CEO
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