Generex Biotechnology Corporation, a company engaged in the research, development, and commercialization of drug delivery systems and technologies, has entered into a non-binding Letter of Intent (LoI) to license the Generex proprietary RapidMist drug delivery technologies to Smoofi, Inc. for the delivery of medicinal and recreational cannabis derived products into the bloodstream through the buccal membrane.
The Generex RapidMist drug delivery platform administers medications directly into the mouth as a metered dose spray for rapid absorption by the buccal mucosa. Generex's most advanced product in development using RapidMist is Generex Oral-lyn, an insulin spray product for the treatment of diabetes mellitus.
SMFI is a provider of consulting and advisory services to licensed medical and recreational marijuana operators and retail dispensaries within the United States. SMFI guides clients through the "seed to retail" process, beginning with business planning, competitive strategy and technology, regulatory compliance and local permitting, site selection, setup and financing.
In exchange for the grant of the global license (excluding Canada), SMFI will issue to Generex (a) $10,000,000 worth of SMFI common stock, and (b) a warrant to acquire up to 15,000,000 shares of SMFI common stock. SMFI will be obliged to qualify the common stock, including the common stock underlying the warrant, for public distribution. The per share strike price of the warrant will be determined based on the average closing price of the SMFI common stock on the OTCQB for the 10 trading days immediately preceding the effective date of the qualifying registration statement. If that price is equal to or less than $3.00, the strike price will be $1.30. If that price is greater than $3.00, the strike price will be equal to 43.34% of that reference price.
SMFI will be solely responsible for the costs associated with the research and development of buccal cannabis products. SMFI will also be solely responsible for the regulatory endeavors associated with such products in its territory as well as the manufacturing, marketing, distribution, and sale of such products in its territory. SMFI will pay to Generex a royalty equal to 20% of SMFI's net revenues from the sale of such products in its territory.
The previously announced buccal cannabis co-development arrangement between Generex and CannScience Innovations Inc. has been revised. Under the revised arrangement, (a) Generex will grant to CannScience a license for the commercialization of buccal cannabis products in Canada in exchange for royalty equal to 15% of Canadian net revenues from product sales, (b) Generex and CannScience will undertake the research and development of buccal cannabis products for SMFI and CannScience, and (c) Generex will remit to CannScience 50% of any royalty payments paid to Generex by SMFI. SMFI will provide initial R&D funding of $1,000,000.
CannScience is an R&D biopharmaceutical company established in Toronto, Canada to conduct research and product development for formulations and extracts related to medical cannabis and its derivatives. CannScience is developing proprietary technologies and owns know-how related to the chemistry and pharmacology of cannabinoids and potentially how they integrate with various medical devices and drug delivery technologies.
Generex, SMFI, and CannScience believe that absorption of cannabis derived products through the buccal membrane offers distinct advantages to alternative routes of administration - principally, a faster onset of activity compared to oral administration, higher level of control for dosing, and more predictable absorption and pharmacodynamics.
The discussions between Generex, SMFI, and CannScience are at an early stage, and the LOI does not assure that SMFI or CannScience will enter into licenses with Generex or utilize the RapidMist technologies. Even if Generex, SMFI, and CannScience enter into formal license arrangements, any benefit from those arrangements will depend upon the abilities of Generex and CannScience to develop products, and of SMFI and CannScience to have such products approved by the appropriate regulators, and successfully commercialize them.
Smoofi, Inc. is a provider of consulting and advisory services to licensed medical and recreational marijuana operators and retail dispensaries within the United States.