Cluny provides details on QT with Teonan
2020-11-30 19:10 ET - News Release
Mr. Michael Frank reports
CLUNY CAPITAL ANNOUNCES ADDITIONAL DETAILS OF ITS QUALIFYING TRANSACTION WITH TEONAN BIOMEDICAL INC.
Cluny Capital Corp. has provided further details on its previously announced definitive agreement entered into on Nov. 3, 2020, with Teonan Biomedical Inc. for the proposed combination of the two companies. The proposed transaction is intended to constitute the company's qualifying transaction (as defined by Policy 2.4 of the exchange) and would result in a reverse takeover of the company by Teonan. As the proposed transaction is not a non-arm's-length qualifying transaction (as such term is defined by the exchange), the approval of the shareholders of the company is not required for the proposed transaction; however, certain ancillary matters described below will require the approval of shareholders of the company. Subject to certain conditions set out in the agreement, Teonan will amalgamate with a wholly owned subsidiary of the company in order to facilitate the completion of the proposed transaction. The full details of the proposed transaction will be included in the filing statement to be submitted in connection with the proposed transaction. Upon completion of the proposed transaction, it is the intention of the parties that the company (the company after the proposed transaction being referred to herein as the resulting issuer) will continue to carry on the business of Teonan and will be listed as a Tier 2 life sciences issuer on the exchange.
About Teonan
Teonan is a privately held, arm's-length company incorporated under the Canada Business Corporations Act (the CBCA) on Oct. 30, 2014, with its headquarters in the province of Quebec. Teonan produces instant wellness beverages under its two brands, Teonan and Velada. Inspired by the relationships ancient cultures held with functional mushrooms and in line with growing consumer trends toward functional foods, with the functional mushroom market poised to grow annually by 9 per cent for the next three years and expected to reach $34-billion (U.S.) by 2024 (1), Teonan created two lines of instant beverages that offer both delicious flavours and immune support through a custom blend of organic functional mushroom extracts. Offered in a variety of flavours, the instant beverage mixes are all probiotic, certified organic (Ecocert, U.S. Department of Agriculture), vegan, dairy free, GMO free and gluten free. In December of 2019, Teonan began direct-to-consumers sales in North America via its on-line stores, and sales to July, 2020, reached $196,918 with a limited marketing budget. Teonan's short-term marketing goals include the launch of a retail initiative to diversify its sales channels and market exposure, brand reinforcement, the revamping and optimization of its website to increase e-commerce flow through and return on ad spend rates, and increase organic traffic. In addition, Teonan anticipates adding two new non-caffeinated beverages flavours to its product line, following client demand.
Under it's Velada brand, Teonan has begun production of cannabidiol-infused beverages having the same high-quality ingredients and attributes of the Teonan beverages. The Velada beverages are produced at its facility in Quebec, in accordance with its microprocessing licence granted in November of 2019 by Health Canada. Pursuant to recent amendments to the cannabis regulations that came into force on Oct. 17, 2019, Teonan has filed for an amendment to its licence with Health Canada that would enable to it to sell its edible products to provincial and territorial authorized resellers. Teonan anticipates receiving the amendment to its licence in Spring 2021. The cannabis beverage market in Canada alone is estimated to be worth $529-million (2) and, with relatively few established suppliers and a high barrier to entry, Teonan expects its offering within the beverage category at a competitive price point will allow it to capture a share of the market.
(1) Mondor Intelligence, "Functional Mushroom Market -- growth, trends and forecast (2020-2025)"
(2) Press release (June 3, 2019), "Deloitte estimates next round of cannabis legalization will create a new $2.7-billion market in Canada"