Investment in Hyasynth Biologicals Inc. would
advance Organigram's interest in next generation
cannabinoids
MONCTON, NB, May 24, 2018 /CNW/ - Organigram Holdings Inc.
(TSX VENTURE: OGI) (OTCQB: OGRMF) ("Organigram"), a leading
licensed producer of medical marijuana based in Moncton, New Brunswick, is pleased to announce
that it has entered into a letter of intent with Hyasynth
Biologicals, Inc. ("Hyasynth") whereby Organigram proposes
to make a strategic investment in Hyasynth. Additionally, the
non-binding letter of intent contemplates Organigram entering into
an off-take agreement with Hyasynth whereby Organigram can purchase
a pre-defined quantity of a range of cannabinoids or cannabinoid
related production from Hyasynth on terms set forth in such
agreement.
Hyasynth, a biotechnology company based in Montreal, is a leader in the field of
phytocannabinoid science and biosynthesis. Their patent-pending
technology makes it possible to produce phytocannabinoids using
genetically engineered strains of yeast. Fermentation is a
well-established and scalable production method for many
nutritional products and pharmaceuticals. Hyasynth's proprietary
enzymes and yeast strains allow them to apply this efficient
manufacturing platform to CBG, CBD and THC for novel and
specialized products, and as pharmaceutical ingredients. Hyasynth
previously demonstrated small-scale production of phytocannabinoids
under a research exemption. They recently received their dealer's
license from Health Canada, which enables them to expand beyond
research and into commercial production.
Pursuant to the terms of the strategic investment, once
finalized, Organigram will have the right to purchase up to
$10 million in senior secured
convertible debentures (the "Debentures") of Hyasynth in a
series of three tranches based on Hyasynth attaining certain
milestones in respect of tranches two and three. Upon the
occurrence of certain conversion triggers, the outstanding
indebtedness under the Debentures would be in whole or in part
converted into equity shares of Hyasynth. If fully converted, the
shares would represent a substantial interest in Hyasynth based on
the current capitalization structure for Hyasynth, provided that
such capitalization structure remains as such at the time of
conversion. Additionally, subject to a successful closing,
Organigram will be granted certain investor rights and board
representation. Organigram will be granted a floating
security interest over the assets of Hyasynth so long as there is
indebtedness outstanding under the Debenture(s).
Greg Engel, CEO of Organigram,
commented, "As a proven technology the use of bioreactors is an
infinitely scalable process which should allow Hyasynth to produce
pharmaceutical grade cannabinoids at a significantly lower cost
than traditional plant-based production, which has numerous medical
and adult recreational use applications. the funding provided by
Organigram will allow Hyasynth to refine and optimize its processes
at scale via a contract manufacturer as well as fund a
purpose-built manufacturing facility for production and also
provides Organigram with the ability to purchase up to 25% of the
cannabinoids produced by Hyasynth."
"We are pleased to work in tandem with Hyasynth" Engel
continued, "as this proposed strategic investment represents
another synergistic partnership to further bolster Organigram's
range of offerings - with a particular view to the future of
cannabinoid products to the growing global market."
Kevin Chen, CEO of Hyasynth, also
provided his comments, "Our priorities have always been on a long
term view of the industry, where cannabinoid production is
absolutely reliable, scalable and versatile for the creation of
many different kinds of products with many applications. For us to
have the biggest impact, we have been looking for partners who
share this vision and want to collaborate with in bringing our
technology to market, and making it available to others around the
world. We're happy to be starting off this next phase of our
company with an excellent partnership with Organigram."
Closing of the aforementioned transaction is subject to certain
closing conditions, including satisfactory due diligence and any
required regulatory approval.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a TSX Venture Exchange listed
company whose wholly owned subsidiary, Organigram Inc., is a
licensed producer of medical marijuana in Canada. Organigram is focused on producing the
highest quality, condition specific medical marijuana for patients
in Canada. Organigram's facility
is located in Moncton, New
Brunswick and Organigram is regulated by the Access to
Cannabis for Medical Purposes Regulations ("ACMPR").
Neither 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.
This news release contains forward-looking information which
involves known and unknown risks, uncertainties and other factors
that may cause actual events to differ materially from current
expectations. Important factors - including the availability of
funds, consummation of definitive documentation, the results of
financing efforts, crop yields, the consummation of the matters
referenced herein - that could cause actual results to differ
materially from the Organigram's expectations are disclosed in the
Organigram's documents filed from time to time on SEDAR (see
www.sedar.com). Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this press release. Organigram disclaims any intention or
obligation, except to the extent required by law, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
For more information on Organigram please visit:
www.Organigram.ca
SOURCE OrganiGram