News

SMI Invests $10 Million in HealthSport

SMI Manufacturing (Booth 1709) has agreed to invest $10 million into HealthSport, Inc., a formulator and developer of edible, multi-layer film strips that deliver drug and dietary supplement actives through buccal and sublingual absorption as well as oral ingestion. The investment is expected to accelerate HealthSport's growth and strengthen its alliances with large pharmaceutical companies.

"The first phase of our relationship with HealthSport was accomplished in July of this year with the signing of the manufacturing agreement between the two companies. This investment represents the next step in that relationship, which is to begin the process of making this breakthrough technology available to the pharmaceutical industry on a worldwide basis," stated Kevin Taheri, SMI's chief executive officer.

"It has been apparent for some time that there is a very strong synergistic relationship between SMI and HealthSport. We are looking to take advantage of that relationship to not only produce dietary supplement and OTC film strip products, but also to begin working with pharmaceutical companies to enter the highly profitable prescription pharmaceutical market," stated Hank Durschlag, chief executive officer of HealthSport. "Our drug delivery platform is ideal for many drugs already used everyday."

SMI and HealthSport signed a stock purchase agreement pursuant to which SMI will invest the $10 million into HealthSport in exchange for a 55% percent stake in HealthSport. Closing of the transaction is anticipated to occur in the next 15 to 20 days. At the time of the closing, SMI will deliver to HealthSport $2 million and a promissory note for $8 million that SMI will pay in five installments through the final scheduled payment on June 30, 2010. Funds from the investment will be used to strengthen HealthSport's working capital position, provide funds for R&D and enhance HealthSport's current manufacturing plant, creating a state-of-the-art, GMP compliant R&D and production facility.