Advitech Inc.
TSX VENTURE : AVI

Advitech Inc.
Natunola Health Biosciences Inc.
TSX VENTURE : NHI

Natunola Health Biosciences Inc.

June 30, 2011 09:34 ET

Advitech and Natunola Enter Into a Merger Agreement to Execute Previously Announced Business Combination

QUEBEC CITY, QUEBEC and WINCHESTER, ONTARIO--(Marketwire - June 30, 2011) - 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 662/3 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® 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.

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.

Contact Information

  • Dr. Nam Fong Han
    President & Chief Executive Officer
    Natunola Health Biosciences Inc.
    (613) 774-9998

    Michael Stangel
    President and Chief Executive Officer
    Advitech Inc.
    418-948-4084
    215-604-0631
    info@advitech.com