HealthSport, Inc. Announces Agreement for $10 Million Investment by SMI Manufacturing
November 10 2009 - 9:30AM
PR Newswire (US)
Investment is Expected to Accelerate HealthSport's Growth as an
International Drug Delivery Technology Company. WOODLAND HILLS,
Calif., Nov. 10 /PRNewswire-FirstCall/ -- HealthSport, Inc.
(OTC:HSPO) (BULLETIN BOARD: HSPO) , the preeminent formulator and
developer of edible, multi-layer film strips that deliver drug and
dietary supplement actives through buccal and sublingual absorption
as well as oral ingestion, announced today that its strategic
manufacturing partner, SMI Manufacturing, has agreed to invest $10
million into HealthSport. The investment is expected to accelerate
HealthSport's growth and strengthen its alliances with large
pharmaceutical companies to provide the next generation drug
delivery technology. "The first phase of our relationship with
HealthSport was accomplished in July of this year with the signing
of the manufacturing agreement between the two companies. This
investment represents the next step in that relationship, which is
to begin the process of making this break-through technology
available to the pharmaceutical industry on a worldwide basis,"
stated Kevin Taheri, SMI's CEO. "It has been apparent for some time
that there is a very strong synergistic relationship between SMI
and HealthSport. We are looking to take advantage of that
relationship to not only produce dietary supplement and OTC film
strip products, but also to begin working with pharmaceutical
companies to enter the highly profitable prescription
pharmaceutical market," stated Hank Durschlag, CEO of HealthSport.
"Our drug delivery platform is ideal for many drugs already used
everyday." SMI and HealthSport signed a stock purchase agreement
pursuant to which SMI will invest the $10 million into HealthSport
in exchange for a 55% percent stake in HealthSport. Closing of the
transaction is anticipated to occur in the next 15 to 20 days. At
the time of the closing, SMI will deliver to HealthSport $2 million
and a promissory note for $8 million that SMI will pay in five
installments through the final scheduled payment on June 30, 2010.
Funds from the investment will be used to strengthen HealthSport's
working capital position, provide funds for R&D and enhance
HealthSport's current manufacturing plant, creating a
state-of-the-art, GMP compliant R&D and production facility.
Closing of the transaction is contingent on certain conditions and
the fulfillment of certain covenants that, if not met, could result
in the termination of the financing. A full description of the
terms of the stock purchase agreement and other transaction
agreements can be found in the Form 8-K that the Company has filed
on the same date as the issuance of this press release. About
HealthSport, Inc. HealthSport, Inc.
(http://www.healthsportinc.com/) is a fully integrated developer,
manufacturer and marketer of unique and proprietary branded and
private label edible film strip nutritional supplement and
over-the-counter drug products. HealthSport's wholly-owned
subsidiary, InnoZen, Inc. (http://www.innozen.com/), is the
preeminent formulator, developer and manufacturer of edible film
strips that deliver drug or dietary supplement actives through
buccal (between the cheek and gum) absorption as well as normal
ingestion. InnoZen's proprietary edible film strip delivery
technology is superior to any other competitive, edible film strips
currently available on the market. InnoZen has five patents pending
and has developed numerous trade secrets which it incorporates in
the development and manufacturing process of its edible film strip
products. About SMI Manufacturing SMI Manufacturing
(http://www.smimfg.net/ ) is one of the United States' premier GMP
certified integrated manufacturer of nutritional supplements since
1996, providing formulation, packaging and logistics capabilities
all under "one roof." SMI is expanding its manufacturing
capabilities to manufacture proprietary drug delivery system
products utilizing HealthSport Inc.'s edible bi-layer film strip
technology and formulation patents. SMI will have four edible film
strip production lines its Tempe, Arizona facility. Forward-Looking
Statements This release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All forward-looking statements are inherently uncertain as
they are based on current expectations and assumptions concerning
future events or future performance of the company. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which are only predictions and speak only as of the
date hereof. In evaluating such statements, prospective investors
should review carefully various risks and uncertainties identified
in this release and matters set in the company's SEC filings. These
risks and uncertainties could cause the Company's actual results to
differ materially from those indicated in the forward-looking
statements. DATASOURCE: HealthSport, Inc. CONTACT: Mike Sclafani of
HealthSport, Inc., +1-303-903-2090 Web Site:
http://www.healthsportinc.com/ http://www.smimfg.net/
Copyright