PHARMA GRADE PROCESS COULD REDUCE THE
PRODUCTION TIME FOR TARGETED CANNABINOID MOLECULE(S)
CSE: HUGE
OTC: FSDDF
FRA: 0K9
TORONTO, Feb. 5, 2019
/CNW/ -
FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) ("FSD Pharma")
and Solarvest BioEnergy Inc. (TSX-V: SVS) ("Solarvest")
(collectively, the "Parties"), a technology company which
has developed an algal-based flexible production platform capable
of producing health products, are pleased to announce that they
have signed a non-binding letter of intent ("LOI"). The
parties intend to enter into a definitive agreement (the
"Collaborative Research Agreement"), under which Solarvest
would conduct research using its algal expression technology to
develop pharma-grade cannabinoids (the "Project
Cannabinoids"), the Parties would make mutual investments into
one another, and Solarvest would grant FSD Pharma an exclusive
license over a subset of the Project Cannabinoids and certain
royalty rights over all of the other Project Cannabinoids.
The Collaborative Research Agreement
The Parties intend to use commercially reasonably efforts to
execute the definitive Collaborative Research Agreement within 30
days, provided that, subject to the receipt of any regulatory
approvals including the TSX Venture Exchange, FSD Pharma may extend
this by up to an additional 60 days.
CBD Research Project
Solarvest plans to develop and carry out a research project (the
"CBD Research Project") using its algal expression system
for the purpose of developing a proof of concept that algae can
express the Project Cannabinoids (the "Proof of Concept").
The Parties intend to develop a formal budget and timelines to
carry out the CBD Research Project under the Collaborative Research
Agreement, and will establish a joint scientific review committee,
comprised of representatives from both Parties, to assess the
progress of the CBD Research Project against these budgets and
timelines.
License and Royalties
Once Solarvest successfully develops the Proof of Concept, the
Parties intend to enter into one or more license agreements
(together, the "Exclusive License Agreement"), under which
Solarvest will grant FSD Pharma an exclusive, worldwide license
over any use of the Project Cannabinoids to produce prescription
drugs that can treat diseases affecting the central nervous system
(the "FSD Licensed Indications"). The Exclusive License will
contain terms and conditions usually contained in agreements of a
similar nature.
In addition to the licensing arrangement, Solarvest will pay a
royalty fee to FSD Pharma on Solarvest's sale or licensing of any
of the Project Cannabinoids, other than the FSD Licensed
Indications, equal to 5% of the net sales or net license fees,
provided that once Solarvest has paid an aggregate of $3,000,000 in royalty fees, the royalty
percentage will be reduced to 3%.
Mutual Investments
The Parties intend, within three days following the receipt of
all necessary approvals of the Collaborative Research Agreement, to
make the following investments into one another:
a) FSD Pharma
will issue 10,000,000 common shares in the capital of FSD ("FSD
Shares") to Solarvest at a deemed price of $0.30 per FSD Share;
b) Solarvest will
issue 3,000,000 units of Solarvest ("Solarvest Units") to
FSD Pharma at a deemed price of $0.20
per Solarvest Unit, each Solarvest Unit being comprised of one (1)
common share in the capital of Solarvest (a "Solarvest
Share") and one (1) warrant (a "Solarvest Warrant"),
each Solarvest Warrant being exercisable into one additional
Solarvest Share at an exercise price of $0.25 for a period of two (2) years following the
issuance thereof; and
c) Solarvest will
issue a convertible debenture to FSD Pharma in the principal amount
of $2,400,000 (the "Solarvest
Debenture"). The Solarvest Debenture will have a term of
five (5) years, bear interest at a rate of 3% per annum, and be
convertible into Solarvest Shares at a conversion price of
$1.00 per Solarvest Share, provided
that FSD Pharma will be required to convert the Solarvest Debenture
should Solarvest Shares close at a price of at least $1.20 for a period of 20 consecutive trading
days.
"If successful this could dramatically disrupt current cannabis
cultivation methods for medical purposes. It could reduce the
majority of time, space and costs associated with cannabis
cultivation for medical purposes specifically cannabis with GMP
Certification. We are very pleased to collaborate with
Solarvest on the development of promising alternative methods of
cannabinoid production using algal technology" said Zeeshan Saeed, President and Founder of FSD
Pharma. "We have been impressed by Solarvest's management knowledge
and operations and believe that future commercial production of
cannabinoids using their algal-based production platform combined
with our proposed investment in Solarvest have the potential to
create significant value for our shareholders."
"This is an exciting opportunity for FSD Pharma and is in line
with our company's strategic direction. We are continuing to focus
our attention and efforts on advanced synthetic cannabinoid R&D
and production for the purpose of finding better treatment outcomes
for certain diseases of the central nervous system, sleep
disorders, certain skin conditions and also looking into effective
ways of combating the scourge opioid epidemic in North America. We look forward to working with
Solarvest and anticipate positive results from their research study
using algae technology to produce pharma-grade bio-synthetic
cannabinoids," added Dr. Raza
Bokhari, Executive Co-Chairman of the Board of Directors of
FSD Pharma.
About FSD Pharma
FSD Pharma is focused on the development of the highest quality
indoor grown, pharmaceutical grade cannabis and on the research and
development of novel cannabinoid-based treatments for several
central nervous system disorders, including chronic pain,
fibromyalgia and irritable bowel syndrome. The Company has 25,000
square feet available for production at its Ontario facility with an additional 220,000
square feet currently in development (with an estimated cost of
$250 per square foot to be completed
in 2019).
FSD facilities sit on 72 acres of land with 40 acres primed for
development and an expansion capability of up to 3,896,000 square
feet.
FSD's wholly-owned subsidiary, FV Pharma, is a licensed producer
under the Cannabis Act and Regulations, having received its
cultivation license on October 13,
2017. FV Pharma's vision is to transform its current
headquarters in a Kraft plant in Cobourg,
Ontario into the largest hydroponic indoor grow facility in
the world. FV Pharma intends to cover all aspects of this exciting
new industry, including cultivation, legal, processing,
manufacturing, extracts and research and development.
About Solarvest
Solarvest is an algae technology company whose production
platform provides it with an extremely flexible system capable of
being adapted to produce numerous products. The company has
successfully produced "Organic Omega 3 DHA" fruit gummies and food
boosting powders. The platform has also successfully
demonstrated (news release dated March 16th,
2015) the expression of bone morphogenetic protein, a high
value therapeutic protein. The Company has successfully produced
recombinant viral antigens (immune stimulating proteins), Cecropins
(antimicrobial peptides/protein) and has completed a feasibility
study for the expression of CBD and THC as a way to produce
cannabinoids in sterile GMP facilities.
Neither the Canadian Securities Exchange (the "CSE") nor
its Market Regulator (as that term is defined in the policies of
the CSE) accepts responsibility for the adequacy or accuracy of
this release.
Certain statements contained in this press release constitute
forward-looking information.
These statements relate to future events or future performance.
The use of any of the words "could", "intend", "expect", "believe",
"will", "projected", "estimated" and similar expressions and
statements relating to matters that are not historical facts are
intended to identify forward-looking information and are based on
the FSD Pharma's current belief or assumptions as to the outcome
and timing of such future events. Actual future results may differ
materially. In particular, this release contains forward-looking
information relating to the Parties' plans to develop and carry out
the CBD Research Project, Solarvest's development of the Proof of
Concept, the ability of the Parties to commercialize the Project
Cannabinoids, the execution of the Exclusive License Agreement, and
the Parties' intentions to make equity investments into one
another. Actual results and developments may differ materially from
those contemplated by these statements depending on, among other
things, the risk that the requisite regulatory and board of direct
approvals are not obtained, the failure of Solarvest to develop the
Proof of Concept, and the failure of the Parties to successfully
commercial the Project Cannabinoids. The forward-looking
information contained in this press release is made as of the date
hereof, and the neither FSD Pharma nor Solarvest is obligated to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by applicable securities laws. Because of the risks,
uncertainties and assumptions contained herein, investors should
not place undue reliance on forward looking-information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
SOURCE FSD Pharma Inc.