Element 79 Capital Inc. Enters into Letter of Intent with Mondias Natural Products Inc. in Respect of a Proposed Qualifying Transaction

Montreal, Quebec (FSCwire) - Element 79 Capital Inc. (TSXV: EMS.H) (“Element 79”) is pleased to announce that it has signed a non-binding letter of intent (the “LOI”) with Mondias Natural Products Inc. (“Mondias”), a corporation existing under the laws of Canada, which outlines the general terms and conditions pursuant to which Element 79 and Mondias would be willing to complete a transaction that will result in a reverse take-over of Element 79 by the shareholders of Mondias (the “Transaction”). Element 79 is a capital pool company and intends for the Transaction to constitute its “Qualifying Transaction”, as such term is defined in the policies of the TSX Venture Exchange (the “TSXV”). The LOI was negotiated at arm’s length and is effective as of July 6, 2017.

Acquisition of Holizen Business

Prior to completion of the Transaction, Mondias intends to acquire (the “Holizen Acquisition”) all the assets of Laboratoire Holizen Inc., a company incorporated under the Canada Business Corporations Act, which company carries on the business of the manufacture and sale of homeopathic and natural products.

Transaction, Consolidation and Concurrent Financing

Prior to completion of the Transaction, Element 79 intends to consolidate (the “Consolidation”) its common shares (each, an “Element 79 Share”) on a 1 for 1.5 basis, and close a non-brokered private placement (the “Concurrent Financing”) of a minimum of 12,000,000 post-Consolidation Element 79 Shares at a price per share of $0.105, for minimum gross proceeds of $1,260,000.  Element 79 may pay a cash commission of 7% of the gross proceeds of the offering and may issue an aggregate of 1,500,000 post-consolidation Element 79 Shares as a finder fee as consideration for the finders introducing Element 79 to Mondias.

Pursuant to the Transaction, an aggregate of 35,000,000 post-consolidation Element 79 Shares, at a deemed value of $0.105 per Element 79 Share, will be issued to the Mondias Shareholders in exchange for all of the Mondias Shares issued and outstanding as at the effective date of the Transaction.

The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the “Definitive Agreement”) to be signed on or around August 31, 2017 (or such other date as may be mutually agreed in writing between Element 79 and Mondias). The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the Transaction will be structured as an exchange of securities.

The Transaction is subject to a number of conditions, including: completion of the Holizen Acquisition, the Consolidation, and the Concurrent Financing; requisite regulatory, corporate, and third-party approvals, including TSXV approval; all required board and shareholder approvals by Element 79, and director approval by Mondias; and completion of due diligence investigations to the satisfaction of each of Element 79 and Mondias.

Since the Transaction is not a non-arm’s length transaction, Element 79 is not required to obtain shareholder approval for the Transaction. Element 79 intends to apply to the TSXV for an exemption from the requirement to obtain a sponsor in connection with the Transaction.

Trading in the common shares of Element 79 is halted at present. It is unlikely that the common shares of Element 79 will resume trading until the Transaction is completed and approved by the TSXV.

About Mondias

Mondias is a company specialized in the development and commercialization of evidence-based botanical products for the health care and agriculture markets.  The company is developing both oral and topical botanical drug agents to help manage unmet medical needs, such as fungal infections of nails and skin, insomnia, and products that provide a safe and effective alternative to synthetic drugs for the management of conditions such as acne and wound healing. The company adheres to pharmaceutical industry standards for manufacturing and clinical development.

Mondias is also in the process of acquiring a retail health product distributor (Laboratoire Holizen).  This division will allow Mondias to rapidly generate revenues and the ability to commercialize and launch new health products across Canada and the USA.  Holizen is also a recognized brand within the natural health market.  Mondias will be able to leverage this brand to expand sales of its acne, sleep, antifungal and wound care products to consumers across North America. 

Mondias is commercializing botanical based specialty fertilizers with label claims of improving plant growth and crop yield.  The Canadian Food Inspection Agency (CFIA) declared that this first product meet the specialty fertilizer exemption set out in Section 3.1 (3)(g) of the Fertilizers Regulations.  With this exemption, Mondias can commercialize this fertilizer for use on household plants, urban gardens, lawns or golf courses or in nurseries or greenhouses.  This botanical based ingredient can also be used as an adjunct to organic fertilizers to help plants resist fungal infections and boost growth and yield. 

In addition, the company is actively developing botanical agents to help prevent and treat fungal infections of plants.  These products would be commercialized for the organic farming industry and would provide novel approaches to prevent and treat fungal infections.  Mondias has a research partnership with Department of Plant Sciences, McGill University that is partially financed by Canadian government research grants (i.e., NSERC ENGAGE, MITAC). 

Mondias plans to use the same approach as with its drug development strategy: create botanical agents to be used as adjuncts to synthetic fungicides and other antimicrobials.  The strategy is aimed at helping to reduce the use of synthetic pesticides in agriculture.  Botanical agents are natural and readily decompose in the environment providing a new approach to helping reduce exposure of consumers and wildlife to pesticide residues.

Mondias is preparing its audited consolidated financial statements, which will be included in the filing statement that will be submitted to the TSXV and released in a subsequent press release.  Description of the management team and the board of directors will also be included and released at the same time.

Further Information

All information contained in this news release with respect to Element 79 and Mondias was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

For further information regarding the Transaction, please contact:

Edward Ierfino, Director, Element 79 Capital Inc.

Telephone:       514-562-1374

Email: eierfino@gmail.com

Andre Rancourt: CEO Produits Naturelles Mondias

Téléphone 819-574 8690

Email : andre.rancourt@videotron.ca

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. 

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation.  Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Private Placement; use of funds; and the business and operations of the Resulting Issuer after the proposed Transaction.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the Resulting Issuer to execute and achieve its business objectives. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  Element 79 and Mondias disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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