Relevium Technologies Inc. is pleased to provide an update on the proposed transaction with Newscope Capital.
As announced in a letter from the CEO issued on December 19, 2019, one of the Company’s main focus for 2020 is the crystallization of the value of the existing business units. On October 29, 2019, the Company announced it had executed an LOI with Newscope Capital to unlock the value of its nutraceutical business. Concurrently, on November 8, 2019, the Company also announced it had entered into an agreement to acquire a contract manufacturing company located in Montreal, Quebec.
The purpose of this news release is to update shareholders on the progress of the proposed transaction.
APPROVAL FOR THE TRANSACTION AND UPDATED TERMS
The Company is pleased to announce it has received the support of the 2018 secured convertible noteholders (the “noteholders”) for the proposed transaction. Under the updated proposed terms for the transaction, the current notes, which are secured against all of the assets of the Company, will be exchanged for notes of Newscope Capital and the corresponding security interest will follow the shares and membership interests of BGX E-Health LLC that will be sold to Newscope Capital under the transaction resulting in the following:
- Newscope Capital will acquire from Relevium all of the shares and memberships interests of BGX E-Health LLC and the rights for the contract manufacturing company in Montreal, Quebec, which includes assuming the indebtedness relating to the outstanding notes with a principal and accrued interest obligation of $2.35 million, thereby reducing the purchase price being paid by Newscope Capital by an equivalent amount (see below for additional information).
- The term for the new notes, now an assumed liability by Newscope Capital, shall be extended to 24 months following the closing date of the transaction, bearing the same interest rate, a conversion equal to the transaction price, namely $0.50 per share, and a mechanism for early repayment subject to the concurrent financing and listing of the shares of Newscope Capital on the Canadian Securities Exchange (CSE).
- Without any restrictions, Relevium undertakes to escrow the shares it receives from Newscope Capital pursuant to the transaction to provide additional security to the noteholders.
- Relevium will remain obligated to the noteholders with non-convertible notes totalling $325,000, which is expected to be paid in instalments over four months. If Relevium closes a significant financing, it is intended that the remaining notes will become accelerated and repaid in full.
The final terms of the transaction will be reflected in the Definitive Agreement between Relevium and Newscope, which is expected to be executed imminently, and the parties intend to proceed to the formal closing of the transaction before the end of this quarter.
Relevium is now working on seeking the approval from its shareholders at the upcoming annual and special meeting of the shareholders of the Company, which is scheduled for the end of February in Montreal, Quebec. Shareholder approval is required since the interest in Bioganix E-Health LLC represents a significant asset of Relevium, however the Company views the transaction as a monetization since Relevium will hold a majority of the issued and outstanding shares of Newscope Capital following the closing.
The transaction is also subject to approval by the TSX Venture Exchange and the Canadian Securities Exchange.
UPDATED TERMS AND DEFINITIVE AGREEMENT
In view of the developments described above, the Company is also pleased to provide a summary of the updated terms of the transaction, subject to the execution of the Definitive Agreement between the parties.
Under the updated terms of the transaction, Newscope Capital will acquire all of the shares and memberships interests of BGX E-Health LLC and the rights for the contract manufacturing company in Montreal, Quebec for a total consideration of $10 million less the assumed indebtedness of $2.35 million for a net payment by Newscope Capital of $7.65 million, which is expected to be satisfied as follows:
- A minimum of $500,000 in cash, of which $200,000 has already been advanced by Newscope Capital to Relevium in the form of a demand promissory note ranking only behind the security granted to the noteholders.
- $7,150,000 in shares of Newscope, representing a total of 14.3 million shares at $0.50 per share.
- Relevium has agreed to a 10% holdback on the transaction through the escrow of 1,430,000 Newscope Capital shares for adjustments relating to certain revenue milestones of BGX E-Health LLC, which shall be incorporated and duly disclosed in the Definitive Agreement to be entered into between the parties. Newscope is also assuming the performance earn-out that Relevium would have had to accept in respect of the proposed contract manufacturing company business.
- Newscope Capital is expected to raise a minimum of $1.5 million and up to a maximum of $5 million through a concurrent equity private placement of securities, with an issue price of no less than $0.50. The final terms of the equity private placement are being negotiated.
Aurelio Useche, CEO of Relevium stated: “With the support from our noteholders and shareholders, we look forward to completing a successful transaction with Newscope Capital, which sets the stage for a fully integrated and focused nutraceutical company, which will not only focus on the organic growth of its business, but also execute on the acquisition of additional complimentary businesses.”
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.
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.
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 by the use of 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
For more information about this press release: Tel: +1.888.528.8687
RELEVIUM TECHNOLOGIES INC