Irwin Naturals Inc. (CSE:IWIN) said it has entered into a non-binding amended and restated Letter of Intent (LOI) for a business combination with Braxia Scientific Corp. (CSE:BRAX, OTC:BRAXF) in a move it said will create a new market leader in North American mental health.
The company noted that Braxia Scientific is a medical research and telemedicine company with clinics that provide innovative ketamine treatments for persons with depression and related disorders. Its US-based end-to-end telemedicine platform KetaMD utilizes leading technology to provide access to safe, affordable, and potentially life-changing at-home ketamine treatments for people living with depression and related mental health conditions.
“We are excited to be building North America’s leading mental health and depression network under the medical expertise of Braxia’s scientific management team, including Dr McIntyre, the world’s foremost expert in depression and ketamine research,” Irwin Naturals CEO Klee Irwin said in a statement.
READ: Irwin Naturals and Braxia Scientific partner to accelerate in-human development of new therapies for mental health
“This combination is a major accelerator and differentiator for Irwin’s network of Emergence clinics across the US as we launch clinical research services for large pharma and emerging biotechnology companies and enhance our capacity with telemedicine capabilities,” Irwin added. “Additionally, we are pleased to continue to support Braxia’s growth and access to more attractive financing making this an attractive potential business combination for Braxia shareholders.”
New market leader in US and NA mental health
Irwin said the combined business will create a new market leader with operations in multiple markets in the US and in Canada across three important business verticals:
Clinics: A large and rapidly growing network of clinics providing much-needed mental health services. The network of clinics will act as highly specialized hubs of excellence with several deployed in larger population centers, while others will be deployed more regionally to greatly improve and expand access to mental health services throughout the North American market.
International clinical research services: A leading mental health clinical research organization (CRO) providing in-human clinical study services to a growing pipeline of strategic pharmaceutical sponsors and partners looking to develop innovative therapeutic and diagnostic products to secure marketing authorization from the US Food and Drug Administration (FDA) and other health regulators.
Telehealth: A telehealth platform (KetaMD) designed to expand access to patients virtually in around 40 US states, extending the operational reach of the clinics within the network, providing services to patients directly in their own homes, and multiplying the supply of mental health services available in the market today.
“With a proven track record of execution in the wellness sector spanning nearly three decades, Irwin has established a strong foothold in mental health,” Braxia Scientific CEO Dr Roger McIntyre commented. “Its growing network of US-based clinics combined with its experienced team and access to capital makes Irwin an excellent partner for Braxia. More importantly, we will be able to quickly and better address the unmet need for treatment of millions of people living with mental health disorders across North America.”
Terms of the LOI
Under the terms of the LOI, Irwin Naturals told investors it is prepared to offer a purchase price per Braxia share based upon a valuation of the outstanding Braxia shares of US$30 million and a deemed value per subordinate voting share and/or proportionate voting share of Irwin equal to the greater of US$3.00 and the volume weighted average trading price of Irwin shares on the Canadian Securities Exchange (CSE) for the 20 trading days immediately prior to the execution of the arrangement agreement.
The final purchase price per Braxia Share and the exchange ratio will be set forth and determined at the time the Arrangement Agreement is executed, Irwin added. The LOI further provides that the consideration shares would be subject to a lock-up period and would be restricted from transfer or sale for six months after the closing date. Insiders of Braxia would be subject to a lock-up period of 12 months from the closing date.
Additionally, under the terms of the LOI and in connection with the proposed transaction, Irwin said it is expected that the convertible securities of Braxia would, under the Arrangement Agreement, either remain outstanding in accordance with their terms or be exchanged for substantially similar securities of Irwin.
The company cautioned that the LOI is non-binding and there is no assurance that the proposed transaction will be completed as proposed as it is subject to the completion of satisfactory due diligence by each company, a binding definitive arrangement agreement, receipt of all required corporate approvals from the respective companies’ boards, and the approval of the CSE and any required third-party consents.
“This combination will optimize the drive for growth of mental health services, creating a first mover advantage in many important markets in North America, while also expanding innovative drug development research to benefit from economies of scale across the businesses,” concluded Irwin Naturals president Adam Berk.
Irwin Naturals has been a household name and best-in-class nutraceutical company since 1994. On a mission to heal the world with plant medicine, it is now leveraging its brand in both the cannabis and psychedelics sectors.
Contact the author at stephen.gunnion@proactiveinvestors.com