Empower Clinics Inc. (CSE:EPW, OTCQB:EPWCF) has said its previously announced LOI (letter of intent) to create and operate a Dallas-based Site Management Organization (SMO) has accelerated in the first 30 days with the official formation of a joint venture (JV) company in Delaware.
The JV is a Delaware LLC between a US corporation owned by Empower (51%) and a Nevada LLC owned by Dr Mocherla (49%) formed together as EPW Curesearch, LLC.
"This is a significant step forward in the first 30 days from first announcing our LOI with Dr Mocherla and serves as a clear indication of our mutually shared intention to rapidly proceed forward with the business of operating a Site Management Organization,” Steven McAuley, chairman and CEO of Empower said in a statement.
READ: Empower Clinics ends Q4 2022 with $193,144 in cash; continues to focus on clinical trial services
“This intention is fueled by the fact that both Empower with its Dallas facility, clinics, patient management expertise and access to capital markets, and Dr Mocherla with big pharma relations and research expertise, bring together the elements necessary to achieve scale in the massive and growing industry of clinical trial management services," he added.
Under the terms of the LOI, the company and Dr Mocherla intend and expect to complete a definitive agreement in which each party will provide US$200,000 in seed capital for the JV.
The definitive agreement is expected to include a right of first refusal providing Empower first right to purchase Las Vegas Medical Research, controlled by Dr Mocherla, and providing Dr Mocherla first right to purchase Empower’s interest.
A definite agreement also envisages Empower issuing 2 million company shares to Dr Mocherla. At such time as the JV achieves US$5 million in revenue and subject to Empower's stock option plan and the policies of the Canadian Securities Exchange, Empower intends to grant 750,000 incentive stock options to Dr Mocherla with a five-year term.
Progress
Empower said that the operational side of the partnership has also experienced rapid advancement with the identification and engagement of over 50 Principal Investigator (PI's) candidates. PI's are practicing medical doctors who are specialists or internists with previous research and clinical trials experience.
Empower's presence in Dallas serves as the perfect hub to launch and scale JV company under the guidance of Dr Mocherla.
“Our proposed Dallas-based SMO is expected to generate 7-digit revenue from clinical trial management services for the pharmaceutical, biotechnology and medical device industries in 2023,” the company added.
The company is also looking to achieve its longer-term goal of becoming a powerhouse to the Contract Research Organization (CRO) healthcare segment.
Empower Clinics as an integrated healthcare company is developing into a leading provider of clinical trials and research solutions in the US and Canada.
Contact the author at jon.hopkins@proactiveinvestors.com