CULT Food Science
CULT Food Science Corp. (“CULT” or the “Company”), an innovative investment platform with an exclusive focus on cellular agriculture that is advancing the development of novel technologies to provide a sustainable, environmental, and ethical solution to the global factory farming and aquaculture crises, is pleased to announce it has entered into a binding Letter of Intent (the “LOI” or the “Transaction“), dated February 25, 2022 with Cella Food Systems Inc. (“Cella“). The Transaction will enable the Company to accelerate its proprietary, cell-based, product development capabilities via Cella’s patent portfolio, machine learning data and prototyping IP toolkits, all while crystalizing turnkey research collaborations and leveraging the methodologies of Cella’s accomplished inventors. CULT continues to build defendable moats around its leading cellular agriculture (“CellAg“) intellectual property (“IP“), patent and investment platform through the additive commercial arrangement.
Management Commentary
“CULT has long recognized that the goal is to build a CellAg ecosystem, not just a portfolio of investments. We believe that, while competitive, actors in the cell-based arena are dedicated to a sustainable and collaborative future. The Company’s trusted relationship as an investor and partner across many verticals allows the Company to bring to bear, where applicable, its own platform technologies to aid and augment its rapidly growing investees. This is expected to ultimately result in multiple future revenue and royalty streams for CULT as it contributes not just capital, but also cutting-edge technologies across its portfolio. This is the first step in the Company’s strategic plan to harness the upside of the nascent cell-based foods markets not only as an investor, but as a principal,” commented Lejjy Gafour, President of CULT.
“This is a transformational step forward for CULT, which lays the foundation for mutually beneficial research and development collaborations as we expand our own internal platform to become a strongly positioned as a leading-edge provider of cellular agriculture IP, machine learning and breakthrough science around cell-based foods. This access gives us a first-mover advantage that we will work to strategically leverage across our portfolio companies as well as to protect technological CellAg superiority. We look forward to rapidly deploying Cella’s IP and patents across our ongoing initiatives in our pursuit to provide our growing shareholder base with preeminent access to the future of food,” added Lejjy Gafour.
Transaction Terms
Pursuant to the terms and conditions of the LOI, CULT and Cella will exchange CAD 300,000 worth of common shares (the “Shares“) of their respective companies, with such shares being valued as follows:
- Each of CULT’s shares will be valued based on the volume weighted a price of CULT’s shares on the Canadian Securities Exchange (the “CSE“) for the 15 trading days prior to the date of execution of the Definitive Agreement, subject to the minimum price per share allowed under the policies of the CSE; and
- CELLA’s shares will be valued at a CAD 10,000,000 pre-money valuation.
The Shares issued by the parties under the share exchange shall be subject to resale restrictions in accordance with applicable securities laws and the policies of the CSE, if applicable. In addition, the CULT shares issued to Cella will be subject to a voluntary six-month hold period.
In addition, Cella will grant CULT, CULT’s current or future subsidiaries, a 15-year license to utilize all of Cella’s intellectual property at the date of the signing of the definitive agreement, including without limitation Cella’s registered patents, under preferential commercial terms to be further defined in the License Agreement. The scope of use shall be defined in the License Agreement, but shall include the portfolio companies of CULT, with a quarterly review by the parties.
Intellectual Property
Cella’s patents were developed by leading synthetic biology scientists and experts from MIT and Yale University. They focus on, but are not exclusively around, systems and methods for producing novel proteins from fungal cell lines. Cella’s proprietary cell-based food and beverage IP toolkits can be a baseline that can help companies disrupt the emerging cell-based marketplace. Cella’s machine learning data aims to help CULT transform food systems with more cost-effective manufacturing processes while using fewer resources than current food and beverage companies.
The fungal cell line methodologies patent portfolio includes the following potential capabilities and applications:
- Bleeding feature in meat: proteins that make cell-based meat bleed like animal-based proteins;
- Lab grown collagen: proteins with multiple health boosting properties including optimizing immunity and maintaining skin health;
- 3D scaffold: creates structural elements for use in cell-based meats for a more realistic mouth feel through supporting muscle, fat and tissue development; and
- Peptides: a method for producing mammalian cell adhesion properties on cell surfaces; used to improve structure in cell-based meat applications.
Transaction Rationale
The Transaction is designed to accelerate CULT’s proprietary cell biology and bioprocess engineering capabilities, as well as complement its existing cell-based investment platform holdings. Further, the Transaction potentially allows for cost savings, increased yields, faster times to market and decentralized CellAg product development across the Company’s evolving investment portfolio and IP platform.
The development of Cella’s foundational portfolio was led by Dr. Kate Krueger. She is a technical expert for the XPRIZE Feed the Next Billion project, a former Research Director of New Harvest and a former employee of Perfect Day Foods, which was the first precision fermentation company to make milk proteins where she contributed to their foundational patent. The patents centre fundamentally around her filing for Cella entitled “Systems and methods for producing meat from fungi”. Finally, CULT believes that Cella’s leading science around machine learning data and open-source prototyping IP toolkits will help empower its portfolio companies to accelerate their innovations on a global level.
About Cella Food Systems
Cella Food Systems (“Cella“) is the perfect OS platform for innovative cell-based food companies to advance technologies that can solve the world’s biggest food supply challenges, which are being lost in commercialization bottlenecks today. Cella speeds up the development process so that we can find solutions in time to feed our growing population in the near decades.
About CULT Food Science
CULT Food Science Corp. (CSE: CULT) is an innovative investment platform with an exclusive focus on cellular agriculture that is advancing the development of novel technologies to provide a sustainable, environmental, and ethical solution to the global factory and aquaculture crises.The first-of-its-kind in North America, CULT Food Science aims to provide individual investors with unprecedented exposure to the most innovative start-up, private or early-stage cultivated meat and cultured dairy companies around the world.
Additional information can be found by viewing the Company’s website at www.cultfoodscience.com or its regulatory filings on www.sedar.com.
