SMI Manufacturing To Invest $10m Into HealthSport

HealthSport has reported that its strategic manufacturing partner, SMI Manufacturing, has agreed to invest $10m into HealthSport. The investment is expected to accelerate HealthSport’s growth and strengthen its alliances with large pharmaceutical companies to provide the next generation drug delivery technology.

SMI and HealthSport have signed a stock purchase agreement pursuant to which SMI will invest $10m into HealthSport in exchange for a 55% stake in HealthSport. Closing of the transaction is anticipated to occur in the next 15 to 20 days.

Reportedly, at the time of the closing, SMI is expected to deliver to HealthSport $2m and a promissory note for $8m that SMI will pay in five installments through the final scheduled payment on June 30, 2010.

The company said that the 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 new, GMP compliant R&D and production facility.

Kevin Taheri, CEO of SMI, said: “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 break-through technology available to the pharmaceutical industry on a worldwide basis.”

Hank Durschlag, CEO of HealthSport, said: “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. Our drug delivery platform is ideal for many drugs already used everyday.”