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Halifax, Nova Scotia–(Newsfile Corp. – December 4, 2018) – Sona Nanotech Inc. (CSE: SONA) has signed a collaboration agreement with one of Europe’s largest lateral flow test developers, who will integrate Sona’s nanorod technology into their market-established lateral flow assays.

Operon SA, based in Zaragoza, Spain, produces a range of rapid diagnostic test and molecular diagnostic products, which it exports to more than 50 countries.

Operon and Sona have agreed to work together to improve the performance of Operon’s currently in-market lateral flow tests to help further establish their market share in the infectious disease arena.

If the feasibility study is successful, further development will take place with the expectation to launch products into the market in the first half of 2020.

Sona CEO Darren Rowles said: “Sona Nanotech is growing its presence in the lateral flow market, and this agreement with one of the largest and most respected developers in Europe demonstrates the scale of our ambition. We are confident that Sona’s unique gold nanorods will improve the performance of Operon’s tests while remaining cost-competitive, allowing expansion of their market share in this multi-billion-dollar market segment*. I am confident this collaboration is just the start of a long and productive relationship between our companies.”

Tomas Toribio, MD of Operon, said: “Operon is always looking for new innovations that will improve the performance of our diagnostic tests and provide a more cost-effective offer for our customers. Sona’s gold nanorods are a unique and impressive technology and we look forward to working together to maximise their potential in our lateral flow assays.”

About Sona Nanotech Inc.

Sona Nanotech Inc. is a nanotechnology life sciences firm that has developed two proprietary methods for the manufacture of rod-shaped gold nanoparticles. The principal business carried out and intended to be continued by Sona is the development and application of its proprietary technology for use in multiplex diagnostic testing platforms that will improve performance over existing tests in the market.

Sona’s gold nanorod particles are CTAB (cetyltrimethylammonium) free, eliminating the toxicity risks associated with the use of other gold nanorod technologies in medical applications. It is expected that Sona’s gold nanotechnologies may be adapted for use in applications, as a safe and effective delivery system for multiple medical treatments, pending the approval of various regulatory boards including Health Canada and the FDA.

Sona is a publicly listed company on the Canadian Securities Exchange existing under the laws of Nova Scotia, with its operations in Nova Scotia.

About Operon

Operon has been developing, manufacturing and selling lateral flow tests to the global market for more than 26 years. Its main product lines are:

  • Raw Materials: monoclonal antibodies and recombinant antigens.
  • Immunocromatography: rapid lateral flow tests.
  • Molecular Diagnostic tests: Opegen and OligoGen.
  • Customized services: contract manufacturing of lateral flow tests and raw materials.

For More Information
For more information about Sona, please contact:
Darren Rowles
President and Chief Executive Officer
Telephone: (902) 442-7192
Email: Darren Rowles

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If you are selling your business, your goals should dictate your approach to everything from corporate structure to tax planning. There are many ways to structure M&A transactions, each with different tax implications, so the decision of how to sell is just as important as what to sell.

Engage in business planning before negotiations go too far

There are any number of reasons to sell a business, whether personal, strategic or commercial. Understanding what is important to you and how the sale fits into your overarching strategy and objectives is an essential first step in the planning process. Does the business have special meaning to you? For example, is it a family business? Do you consider it to be a strategic asset?

Although basic, these questions will influence the entire transaction, and help you optimize after-tax returns. Those tax implications can then inform your decisions concerning the pricing, conditions, schedule, and structure of the deal. In certain circumstances, the right planning can impact the net return on a sale by 10-15% — a significant margin.

It is also important to understand that business planning should take place before the negotiations become too advanced. Once you’ve signed a letter of intent, it may be too late to make key decisions on the transaction which will maximize tax efficiencies on the overall sale.

Once negotiations are underway, you may be surprised at how quickly they unfold – the process often takes less than two months. This does not leave much time for corporate planning, so there is a balance to strike as a seller. While you don’t want tax planning to drive you’re planning as a vendor and other strategic considerations, it is still a good idea to be proactive, and not be inhibited from taking decisive action for tax reasons later on. We recommend that you start with a clear outline of your corporate objectives and optimize tax results accordingly.

While buying takes months, selling takes years. If you are the seller, you should think about the possibility of M&A at least three years in advance because this will help determine how your business grows. In contrast, buyers are usually responding to market dynamics, although they will also have long-term objectives of their own.

Understand the buyer’s motivations

As a seller, you should have a strong understanding of the value of your business, your role in the market, and what intangible factors may motivate prospective buyers. For example, some buyers are motivated by competitive factors, and will place a premium on their competitive position. These factors are quantifiable and should be well understood before the terms of the transaction are settled.

Although buyers respond to market opportunities, they also engage in long-term planning. A significant part of their strategic plan may include buying businesses to achieve their objectives. So, this is not usually a spontaneous decision, as the buyer will be identifying targets in advance.

The buyer’s strategic motivations will usually include one, or more, of the following:

  1. The targeted business is in the same sector, perhaps as a key supplier;
  2. The targeted activities are innovative and show significant promise;
  3. The acquisition may lead to economies of scale and increased profitability;
  4. There are competitive advantages to be gained in a geographic area; and
  5. The acquisition is done sooner than intended due to intense M&A activity in a sector or a geographic area.

Another important consideration in a buyer’s decision to proceed with the acquisition is whether they are capable of assimilating the target business. Although the business may seem attractive for strategic reasons, the acquisition is only advisable if the buyer has the capacity to see it through. Otherwise, they risk becoming overwhelmed if their new, sudden growth isn’t structured properly.

While this may seem counter-intuitive if you are the seller you shouldn’t focus on the transaction structure until you fully understand the buyer’s motivations. This is because it’s difficult to negotiate without compromising the value of what you’re trying to sell. So, you have better odds of maximizing your position once you truly understand what the buyer wants.

What does the transaction look like?

Once you decide to sell your business, you should consider the after-tax return on proceeds. The number of vendors may have an impact on the capital gains exemptions that are available. Further, a tax deferral may be available depending on the nature of the proceeds. The reason for this deferral is to match tax obligations with cash flows and ensure you don’t incur unexpected tax liabilities while holding relatively illiquid assets.

As well, to the extent the sale proceeds include a contingent or earn-out component, which allows the seller to participate in the future growth of the company, such a component can be taxed as a capital gain or regular income.  The outcome depends on how it is earned or realized.

Usually, it is more advantageous for a seller to sell an equity interest and for a buyer to buy assets. For each side, this choice comes with certain tax advantages. Although this is the basic dynamic at play in M&A, transactions are becoming increasingly complex in today’s competitive environment. In fact, the question of whether a sale involves equity or assets is sometimes a hard one to answer, and your professional tax advisor may help you in making this choice and in optimizing the result.

The priority for your Grant Thornton tax advisor is to help you reach your long-term financial goals, at every step of the corporate journey. When done in advance, tax planning can both support and guide your decisions in a way that will maximize returns and help you avoid unexpected pitfalls. For more information, contact us.

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Starting a technology company, setting up an R&D center in Canada or transitioning your technology company to new ownership all require dedication and substantive expertise. In addition to the expected business challenges that come with innovation and rapid growth, there are risks and potential pitfalls that await entrepreneurs and business leaders. In our work with tech companies, we decided to put together this list of common issues we see across the sector that apply to both small and large tech companies here in Canada.

The technology sector offers great opportunities for start-ups and foreign investors seeking to leverage the resources, infrastructure, and incentives available here in Canada. We have worked with R&D incubators and accelerators, municipal investment attraction agencies and foreign direct investment across the country. From hundreds of conversations, we compiled seven practical considerations based on our experience helping tech innovators to grow their businesses in Canada.

1. Foreign-owned (or acquired) corporate innovation labs and R&D centres – don’t forget to set up a transfer pricing structure

When setting up a corporate innovation centre – whether you are a domestic operation that is acquired by a foreign owner or a corporation investing in a new facility from overseas – you need to develop a transfer pricing structure and establish what is taxable in Canada. While it might seem natural to view such labs as simple innovation cost centres because they are not generating revenue, the tax laws in this area are broad in scope and in most cases will require profits to be recognized by the innovation centre, at least to some degree. This step is particularly important, as the Canada Revenue Agency (CRA) has been intensifying its enforcement of transfer pricing laws due to the worldwide focus on the 115 member country OECD Inclusive Framework on Base Erosion & Profit Shifting (BEPS).

2. Big fish buying a little fish – Changes to your SR&ED tax credits on acquisition by a foreign company or larger domestic enterprise

If your business benefits from – or has applied for – research and development tax credits, it is essential to understand how these might change in the event of any merger or acquisition. The Scientific Research and Experimental Development (SR&ED) Tax Incentive Programprovides incentives for companies in Canada to conduct scientific research and experimental development. However, the size and nationality of the parent corporation can make a significant difference in what level of support is provided. For example, a Canadian-controlled private corporation (CCPC) receives a federal refundable investment tax-credit of 35% on qualified expenses up to $3 million. However, if that CCPC is bought by a large Canadian-based company or foreign-based enterprise, the SR&ED tax credit rate drops to 15%, and the tax credit is no longer refundable – i.e., it can only be applied to offset other taxes actually incurred. We have seen this change negatively impact corporate cash flow and valuation of the business.

3. Know when your company’s stock options become taxable – and who pays

Stock options can be a powerful compensation tool for start-ups and high-growth companies to retain and engage employees, but as compensation, they are eventually taxable. By understanding what triggers this tax liability and who is responsible for paying it, you and your valued employees can avoid unpleasant surprises.

4. Government grants are taxable, and the name on the cheque matters

Funds received from government grants are viewed as income by the CRA, and the recipients must account for them on their financial statements and tax returns. Further, it makes a difference how that grant is given, and there are unique considerations for when the grantee is a company, an individual or a group of individuals.

When a grant is given to a company, it becomes corporate income, but when the grant is awarded to an individual, it must be reported on their personal tax return. The situation becomes more complicated when a group of students or researchers receive a grant together, and differences of opinion on how to use the funding can create challenges. It is best to have an agreement set in advance regarding how such grants will be used if won or awarded.

In addition to income concerns, the government grants could be viewed as taxable for GST/HST purposes. A review of the funding agreement and the CRA guidelines is often required to make this determination as a grant may not always be a grant for GST/HST purposes.

5. The recent Wayfair ruling by the US Supreme Court has consequences for businesses selling online into the US

The recent US Supreme Court ruling in Wayfair vs South Dakota has changed the expectations for those selling products across state and international borders. The decision overturned precedent and may make it easier for state and local governments to require businesses that have no physical presence in a jurisdiction to collect and remit sales taxes. The impact of the protectionist Wayfair decision will make remote sellers consider US tax implications in the early revenue stages. Canadian companies should start thinking now about how they might comply with complex and nuanced requirements in the US state and local tax regimes.

While comparable provisions have yet to be implemented across Canada, Quebec has announced a similar obligation that may need to be considered when selling into that province. This may set a precedent for other provinces in Canada to follow suit.

It is important that business owners take the time to understand the potential impact of these tax obligations, which can lead to significant and often unnecessary challenges if not planned in advance.

6. Consider the pros and cons of registering for GST/HST, even before it’s required

Your business is only required to register for GST/HST once your revenue exceeds $30,000-including sales of any associated entities. Despite this, we often advise start-ups to voluntarily register earlier, as once registered, your business can claim GST/HST incurred as an input tax credit for your current business expenses – even before you generate revenue.

Once your business is registered however, GST/HST needs to be charged on all taxable supplies even if you have not met the $30,000 threshold.

There may be Provincial Sales Tax (PST) requirements that need to be considered in certain provinces (BC, SK, MB and QC) if an entity is expanding into these provinces or acquiring an existing business in these provinces.

7. Prepare now for how intangibles will be evaluated in the future

If and when the ownership of your business changes – whether it’s an exit, acquisition or merger – you will have to define and assign a dollar value to intangible assets such as goodwill. In general, the goal is to maximize the tax outcomes for entrepreneurs and family members, but you have to make your plans well before any transaction occurs, not when someone is knocking at the door ready to buy your business.

GST/HST should also be factored into any potential ownership change, as it will generally apply on the value of assets being sold, including intangibles.   Relief from sales tax may be available in certain instances but being proactive and ready in advance will help ensure there are no surprises to you or the potential buyer.

Don’t hesitate to seek advice

Your Grant Thornton advisor understands the challenges you face in starting and growing your technology business. We assist entrepreneurs and leaders in the tech sector by helping them maximize potential and identify financial opportunities – while avoiding these pitfalls and mitigating their risk.

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The Volta Cohort program awarded a total of $150,000 to six companies on Wednesday night, handing out an extra $25,000 bundle due to the strength of the pitches.

In its third pitching event, the Volta Cohort advertised that it would invest as much as $25,000 to as many as five companies, but it added a bonus investment to a sixth company at the event. Volta Labs, the Halifax startup house, organizes the event to help out early-stage companies that need their first equity investment to help them reach the market.

Thirteen companies pitched at the event, and the winners were:

Aurea Technologies (Halifax)

Byos Cybersecurity (Halifax)

iLokol Technologies (Halifax)

Milk Moovement (St John’s)

Neothermal Energy Storage Inc. (Bridgewater, NS)

Tranquility Online (Halifax) – Tranquility offers an online, Software-as-a-Service solution that uses the gold standard therapy approach for anxiety: Cognitive Behavioural Therapy, or CBT. Tranquility’s interactive CBT software was built by experts and can also be accompanied by coaching from real people, who will be trained with an internally developed training protocol. The company recently launched a $1400-a-month pilot project with Volta-resident entrepreneurs.

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Dental technology company BlueLight Analytics has closed a $3 million funding round and plans to use the money to launch a new data analytics product that can be installed in any dental office.

The Halifax company released a statement Wednesday saying the lead investor in the funding round was CIC Capital Ventures, the North American venture capital arm of French private equity firm CM-CIC Investissement. Innovacorp, the Nova Scotia government’s early-stage venture capital agency, also joined the round.

It was the first time BlueLight has raised venture capital financing, though it has raised about $3 million in equity funding from angel investors.

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After taking his online treatment for anxiety through an initial pilot, Joel Muise is now working with those at the coalface of anxiety—entrepreneurs—before launching TranquilityOnline to the general public in the new year.

TranquilityOnline aims to make getting treatment for anxiety affordable and timely by allowing users to access online support through a coach rather than a therapist. Coaches use Cognitive Behavioural Therapy, or CBT, to show sufferers how to shift negative thought patterns to balanced ones, and how to face challenges rather than avoid them.

Muise said the new paid pilot with Halifax’s Volta Labs startup house will allow Tranquility to work with seven entrepreneurs over six months. Volta will pay Tranquility $1,400 each month — money which will go toward covering the costs associated with launching to the general public in the new year.

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Halifax, Nova Scotia–(Newsfile Corp. – November 22, 2018) – Sona Nanotech Inc. (CSE: SONA) has relocated its laboratory facilities to Halifax as it seeks to capitalise on recent business success and further expand its business in the diagnostics market.

Following a period of recent growth, the company agreed a three-year lease with Innovacorp on October 1 for space at the Technology Innovation Centre on Research Drive.

Previously, Sona’s laboratory operations had been based at Saint Francis Xavier University in Antigonish, where the company was originally founded in 2014.

The recent signing of a global distribution agreement and collaborations with industry-leading businesses has led to increased demand for Sona’s products and services. Sona’s move to larger premises ensures customers’ requirements are met while allowing continued business growth and new product development.

Sona’s full staff began moving into the Centre this week after several weeks of work to outfit the new facility with state-of-the-art laboratory equipment.

The move was funded in part from a loan from the Atlantic Canada Opportunities Agency (ACOA), which was provided to Sona in May this year (2018).

Sona CEO Darren Rowles said: “This move represents a significant step towards realising our strategic plans through to 2020. Sona has achieved some incredible successes in recent months, including signing several exciting new partnerships and distribution agreements. To keep up with the growing demand for our products and services it was clear we needed larger premises to increase our manufacturing and distribution capacity to support long term growth. Innovacorp’s Technology Innovation Centre fit our needs perfectly; the space is flexible and scalable, and the Centre’s location, close to the airport and other transport links, is ideal for distributing our products globally. This will provide us with an excellent space in which to develop new and innovative products for the diagnostic and healthcare markets and a base from which to continue our growth as a strong, successful and sustainable business.”

Michael Kabalen, Manager, Properties & Incubation for Innovacorp, said: “We are delighted to welcome Sona Nanotech to Innovacorp’s Technology Innovation Centre. Sona is an innovative tech company with a unique offering and we have been watching its development with keen interest. We look forward to helping take Sona’s business to the next level.”

About Sona Nanotech Inc.

Sona Nanotech Inc. is a nanotechnology life sciences firm that has developed two proprietary methods for the manufacture of rod-shaped gold nanoparticles. The principal business carried out and intended to be continued by Sona is the development and application of its proprietary technology for use in multiplex diagnostic testing platforms that will improve performance over existing tests in the market.

Sona’s gold nanorod particles are CTAB (cetyltrimethylammonium) free, eliminating the toxicity risks associated with the use of other gold nanorod technologies in medical applications. It is expected that Sona’s gold nanotechnologies may be adapted for use in applications, as a safe and effective delivery system for multiple medical treatments, pending the approval of various regulatory boards including Health Canada and the FDA.

Sona is a publicly listed company on the Canadian Securities Exchange existing under the laws of Nova Scotia, with its operations in Nova Scotia.

About Innovacorp

Innovacorp is Nova Scotia’s early stage venture capital organization. It works to find, fund and foster innovative Nova Scotia start-ups that strive to change the world. Target industries include information technology, life sciences, clean technology and ocean technology. In addition to risk capital, Innovacorp gives entrepreneurs access to world-class incubation facilities, expert advice and other support to help accelerate their companies.

For More Information
For more information about Sona, please contact:
Darren Rowles
President and Chief Executive Officer
Telephone: (902) 442-7192
Email: Darren Rowles

TruLeaf’s purpose

To improve public health and the environment by growing nutritious food using multi-level indoor farming technology.

Greens for everyone

TruLeaf uses their proprietary indoor vertical farming technology to grow and sell pesticide-free, nutrient-rich leafy greens all year round. The company sells to major food retailers, food service and distributors in Atlantic Canada, and is expanding to Ontario this fall. Their produce is sold under the GoodLeaf brand, through a wholly owned subsidiary.

But Gregg Curwin, CEO and founder of TruLeaf, sees potential for the company beyond simply growing greens. In addition to owning and operating farms across North America, TruLeaf sees how their indoor farming technology could be used to improve food security around the world. “Think of the Caribbean and the devastation last year. Every one of those islands could use one of our farms,” he says.

TruLeaf grows produce without the use of pesticides, herbicides or fungicides. The growing system is designed to drastically reduce water usage compared to traditional farming methods, and because the farms are indoors and can be built anywhere, they offer local produce 365 days a year. As well as reducing the environmental costs of transporting food, TruLeaf is also supporting local employment throughout the year. “There’s nothing better for a provincial GDP than 12-month agricultural production,” says Curwin.

The company also sees significant potential for TruLeaf’s approach in Northern communities, giving access to locally grown nutritious food all year round and providing employment opportunities.

When your purpose is personal

Curwin believes that using vertical farming to develop a fairly priced nutritious product is the most effective way for him to make an impact on the public health crisis he witnessed during the decades he worked in the healthcare industry.

“I was deeply disturbed by what I was seeing – the incredible amount of inefficiency and the incredible acceleration of disease, our emergency rooms lined up with people in the hallways,” he says.

It was around this time that Curwin was introduced to the concept of vertical farming. He quickly became interested in the connection between nutrient-rich food, self care and health. “I couldn’t get it out of my head and I actually divested out of my other businesses. I think my wife thought I was bona fide crazy. She supported me fully and so I took a couple of years just researching it and I just deeply felt that this is the future.”

Curwin’s passion for TruLeaf’s purpose has seen him through the ups and downs of the business, and he’s seen this same motivation help his team members on hard days as well. It’s also played a role with their investors, who, says Curwin, might not have started out as impact investors but have turned into them after they’ve bought into TruLeaf’s social mission – and the company.

Competing on purpose

Their purpose has also given TruLeaf a strong competitive edge, enabling them to compete successfully against other well-known brands in the health and organic space.

TruLeaf’s customers – retailers and distributors – are responding to consumer demand for the types of products that TruLeaf offers, but that demand goes beyond a simple desire for lettuce. Curwin sees consumers making informed decisions about what they buy, attracted to the story told by TruLeaf about their purpose in their marketing.

“So I think the more we tell our story, the more the consumer understands it, it will directly affect our revenue,” says Curwin. “If we don’t tell the story well, if we don’t say that we’re doing all these great things, then shame on us and then it will probably have a negative effect on revenue.”

Getting the timing right

Curwin believes that the time is right for purpose-led businesses to prosper, and TruLeaf is benefiting from this. “The demand is incredible. And I think it’s a testament to our quality, but also to the market demographic and what’s going on socially. People want to care about their food.”

But it wasn’t always this way. He remembers in the early days of TruLeaf when discussions with a government department about his idea ended in ridicule. Thankfully, times have changed – be it conscious consumers creating a market demand, investors wanting to pursue a social purpose with their money, or employees searching for meaningful work that reflects their values.

“Don’t be afraid of purpose-led. Embrace it and back it with a sound business case and then you’re going to have a lot of fun,” says Curwin. “Never has there been a better time to start a purpose-led business.”

Read the original press release here.

The Proposed Transaction is expected to provide Tetra:

  • With the most robust Pharmaceutical and Natural Health Products (NHP) pipeline of any Cannabinoid company;
  • With more pharmaceutical and natural health products;
  • The ability to sell these products worldwide; and
  • Access to Panag’s NHP portfolio which is not included in the present in-licensing agreement with Panag. 

ORLEANS, Ontario, Nov. 06, 2018 (GLOBE NEWSWIRE) — Tetra Bio-Pharma Inc., (“Tetra” or the “Company“),  a leader in cannabinoid-based drug discovery and development (TSX VENTURE: TBP) (OTCQB: TBPMF), today announced it has entered into a non-binding proposal (the “Proposal“) with the shareholders (the “Vendors“) of Panag Pharma Inc. (“Panag“) for the acquisition by Tetra of all of the issued and outstanding shares in the capital of Panag (the “Proposed Transaction“).  Panag is a Canadian-based life sciences company focused on the development of novel cannabinoid-based formulations for the treatment of pain and inflammation.  Panag has developed innovative and patented formulations for the treatment of ocular diseases and other pain conditions such as general neuropathic pain. Their significant formulation expertise in the wellness market will allow Tetra to expand its commercial operations. 

Dr. Guy Chamberland, CEO and CSO of Tetra stated, “We are very pleased to announce this news to our shareholders.  We have been working with Panag for over a year and as a combined entity we will have a robust product pipeline of cannabinoid derived drugs for development as prescription or OTC drugs.  Tetra is not just acquiring assets and intellectual property, we are joining a group of world-renowned cannabinoid experts that will help take Tetra to the next level as a pharmaceutical company.”

Panag will remain a separate subsidiary owned 100% by Tetra and will provide Tetra with additional discovery and early phase drug development capacity.  With this robust product pipeline, Tetra intends to continue to implement its out-licensing program to generate additional revenues via upfront payments, milestone payments, and royalties and actively pursue the clinical development of lead products.

“Panag will bring Tetra Natural Health a unique pipeline of products, thereby strengthening our role as a key player in the cannabinoid wellness market,” said Richard Giguere, CEO of Tetra Natural Health. “We look forward to working with Panag to commercialize these products globally and expect to generate revenues from these products by Q4 2019 following completion of the acquisition.”

According to Dr. Orlando Hung, a co-founder of Panag, “We are very excited to have the opportunity to continue our decades of cannabinoid research work and partner for commercialization with Tetra Bio-Pharma. The timing is perfect as there is an urgent need for non-opioid medications to treat pain and inflammation. We expect the Panag-Tetra Bio-Pharma combined portfolio of cannabinoid products to play a significant role in the management of pain and inflammation.  We are particularly pleased to have the support of Tetra Bio-Pharma to advance the development and research of Panag cannabinoid products.”

Pursuant to the Proposal, Tetra would acquire 100% of the issued and outstanding shares of Panag for an aggregate consideration of $12,000,000, on a debt-free basis and subject to customary post-closing adjustments. The purchase price would be payable by Tetra delivering to the Vendors, on the closing date of the Proposed Transaction, (i) $3,000,000 in cash and (ii) $9,000,000 payable in common shares of Tetra. The Proposal also contemplates the payment by Tetra to the Vendors of an aggregate amount of up to $15,000,000 in cash in milestone payments upon the achievement of operational targets associated with marketing approvals and commercialization of both human and veterinary drug products by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). The milestone payments would be accelerated in the event of a bankruptcy, insolvency, change of control or sale of all of the assets of Tetra.

Two of the Vendors, Bill Cheliak and Gregory Drohan, are non-arm’s length parties to Tetra within the meaning of the rules of the TSX Venture Exchange. Mr. Cheliak is the Chairman of the Board of Directors of the Company and Mr. Drohan is a Director of the Company. The Proposed Transaction will not result in the issuance of securities to non-arm’s length parties as a group as payment of the purchase price exceeding 10% of the number of outstanding shares of the Company on a non-diluted basis.

The Company expects that the Proposed Transaction will be completed by the end of the 2018 calendar year. 100% of the shareholders of Panag have signed the term sheet.  Completion of the Proposed Transaction remains subject to a number of conditions, including the completion of a satisfactory due diligence investigation by Tetra, the negotiation of a definitive purchase agreement, the approval by Panag’s shareholders in accordance with the shareholders’ agreement of Panag, the receipt of all required regulatory approvals, including that of the TSX Venture Exchange and such other closing conditions as are customary in transactions of this nature.  There can be no assurance that such conditions will be satisfied and that the Proposed Transaction will be completed as described or at all.

About Tetra Bio-Pharma:

Tetra Bio-Pharma (TSX-V: TBP) (OTCQB: TBPMF) is a biopharmaceutical leader in cannabinoid-based drug discovery and development with a Health Canada approved, and FDA reviewed, clinical program aimed at bringing novel prescription drugs and treatments to patients and their healthcare providers. The Company has several subsidiaries engaged in the development of an advanced and growing pipeline of Bio Pharmaceuticals, Natural Health and Veterinary Products containing cannabis and other medicinal plant-based elements. With patients at the core of what we do, Tetra Bio-Pharma is focused on providing rigorous scientific validation and safety data required for inclusion into the existing bio pharma industry by regulators, physicians and insurance companies.

For more information visit:

About Panag Pharma:

Panag Pharma Inc. is a Canadian based bio-tech company focused on the development of novel cannabinoid-based formulations for the treatment of pain and inflammation. Panag believes that pain relief should be safe, non-addictive and above all; effective. The Panag Pharma team of PhD scientists and medical doctors are among the world’s leading researchers and clinicians in pain treatment and management. They bring a combined experience of over 100 years in research and clinical care of people dealing with chronic pain and inflammatory conditions. Panag’s current pipeline of pain relief products include formulations for the topical application to the skin, the eye and other mucous membranes. Recently approved by Health Canada and currently undergoing clinical trials, Panag Pharma’s Topical AOTC provides a new approach to the treatment of chronic pain and inflammation.

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Halifax-based Panag Pharma, which is making pain-relief products from natural compounds found in cannabis plants, has agreed to be bought for as much as $27 million by Ontario’s Tetra Bio-Pharma.

Based in the Ottawa suburb of Orleans, Tetra is a drug discovery company that specializes in developing treatments based on such compounds – known as cannabinoid-based drug discovery. The company, which is listed on the TSX Venture Exchange, said in a press release that the acquisition will allow Tetra to develop more natural healthcare products and sell them world wide.

The Panag Team – which is led by healthcare professionals Mary Lynch, Melanie Kelly and Orlando Hung – will continue to conduct research into cannabinoid-based treatments for Tetra, and receive extra payments for hitting specific milestones. The buyer said it believes it will gain revenues from Panag’s products by late 2019.

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