Core One Labs Inc. has entered into a letter of intent (LOI) dated Oct. 1, 2020, to acquire all of the outstanding share capital of Vocan Biotechnologies Inc.
Vocan is a genetic engineering and biosynthesis research firm developing a proprietary fermentation system for the production of psilocybin API. Vocan's mission is to use science and technology to advance the knowledge of natural-based medicines for the treatment of mental health illnesses, including addictions. Vocan's team of scientists, specializing in protein expression and biosynthetic fermentation, has discovered a patentable method of producing psilocybin, the active ingredient in psychotropic mushrooms, and its technology will produce cGMP (current good manufacturing practices) API-grade psilocybin, which can be used by pharmaceutical companies, API manufacturers and medical research organizations conducting clinical trials. Vocan's management expects that the unique optimized DNA (deoxyribonucleic acid) construct and producer strain will allow for time-efficient and cost-effective cGMP (current good manufacturing practices) API-grade psilocybin at commercial scale. Psilocybin production methods developed by Vocan could provide more affordable access to organizations looking to acquire cGMP API-grade psilocybin.
Chief executive officer and founder of Vocan Biotechnologies
Dr. Robert E.W. Hancock, chief executive officer and chairman of Vocan, is a leading researcher at the University of British Columbia, a Killam professor of microbiology and immunology, and a Canada Research chair in health and genomics. He is a co-founder of several companies, both private and public, including: Migenix, Inimex, ABT Innovations and Sepset Biotherapeutics. He has won major health research awards and is an officer of the Order of Canada. Dr. Hancock will continue as chief executive officer of Vocan following completion of the acquisition.
Dr. Jan Burian, founder and chief technology officer of Vocan, is a successful biochemist and molecular biologist with extensive knowledge and an exclusive skill set in fermentative API-grade research, development and production. He has been cited in numerous academic publications. Dr. Burian previously held a site directorship with Pfizer Canada, where he was responsible for a vaccine-manufacturing facility that relied on his advanced fermentation techniques.
Dr. Hancock and Dr. Burian first began collaborating over 20 years ago and bring a unique combination of broad scientific know-how and skill as they get set to take Vocan's exclusive psilocybin production capabilities to commercial scale.
"We are honoured and privileged to work with scientists of Dr. Hancock's and Dr. Burian's calibre," commented Joel Shacker, chief executive officer of the company. "Combined with the company's existing infrastructure and the integration of its intellectual property related to psychedelic treatments and novel drug therapies, an acquisition of Vocan and its talented research team only furthers the company development in the alternative psychedelics medicine market."
Terms of the letter of intent
Under the terms of the LOI, in consideration for all of the outstanding share capital of Vocan, the company is expected to issue 23.5 million common shares and four million common share purchase warrants to the existing shareholders of Vocan. Each consideration warrant will be exercisable to acquire an additional common share of the company at a price of 30 cents for a period of 24 months.
In addition to the consideration shares and the consideration warrants, the existing shareholders of Vocan will also be eligible to receive bonus payments of up to five million common shares. The bonus shares will be issuable in two tranches, of which 2.5 million bonus shares will be issuable upon the successful synthesis of psilocybin and a further 2.5 million bonus shares will be issuable upon the filing of a patent application for such synthesis method in at least one jurisdiction.
It is anticipated that a portion of the consideration shares will be subject to the terms of a pooling arrangement, during which time they may not be transferred or traded without the prior consent of the company. The consideration shares will be released from the arrangement in tranches over a period of nine months following the completion of the acquisition.
The completion of the acquisition of Vocan remains subject to a number of conditions, including: the satisfactory completion of due diligence; the receipt of any required regulatory approvals; and the negotiation of definitive documentation. The acquisition cannot be completed until these conditions have been satisfied.
The company is at arm's length from Vocan and each of its shareholders. The acquisition of Vocan is not expected to constitute a fundamental change for the company, nor is it expected to result in a change of control of the company, within the meaning of applicable securities laws and the policies of the Canadian Securities Exchange. No finders' fees or commissions are payable in connection with the acquisition of Vocan. An administrative fee of 470,000 common shares is owing to a third party consultant who will be assisting with the completion of the acquisition.
About Core One Labs Inc.
Core One Labs is a research and technology company with a state-of-the-art cannabis production and packaging facility located in Southern California. The company's technology produces infused strips (like breath strips) that are not only a safer, healthier option to other forms of delivery, but also superior bioavailability of cannabis constituents. The technology provides a new way to accurately measure the dosage and assure the purity of the selected product. The company holds an interest in walk-in medical clinics located in Vancouver and West Vancouver, B.C., which maintain a database of over 200,000 patients combined. The company intends to further develop its product offerings through research and development in these clinics, including the integration of intellectual property related to psychedelic treatments and novel drug therapies.