This week CULT Food Sciences announced it had signed a binding letter to acquire some of Because Animals Inc.’s consumer brand assets, related patents, non-scientific intellectual property, and product formulations.
The acquisition of some of the assets of Because Animals, one of the first startups dedicated to creating pet food using cultivated meat, comes just weeks after CULT announced that Canadian entrepreneur, Marc Lustig, had acquired 15% of the company through the purchase of 27 million shares of CULT. With the deal, Lustig, a cannabis industry executive who sold his company Origin House for $1.1 billion in 2019, becomes CULT’s biggest shareholder. While the terms of Lustig’s investment were undisclosed, 27 million shares of CULT tallied to about ~$2 million based on CULT’s stock price at the time.
While it’s unclear if the two deals were connected, what is clear is the move to bring some of Because Animals’ IP into the fold has been in the works for some time, as it follows the announcement in November that Because Animals’ cofounder, Joshua Errett, was appointed as CULT’s VP of Product. Errett is one of the inventors behind some of the key patents for the company.
With the move, CULT, which describes itself as a company focused on the investment, development, and commercialization of cellular agriculture technologies and products, will expand its products into the pet food space. The company, which also has investments in a variety of different cellular agriculture-based startups, has already launched consumer-facing products such as cell-based coffee and candy.
The terms of the deal involve Further Foods Inc., a subsidiary of CULT, acquiring the assets from Joshua Errett in exchange for a USD$500,000 promissory note bearing interest at 4.35% and an initial 10% ownership stake in Further. Additional ownership stakes in Further will be issued to the vendor based on revenue generated by the assets after the closing of the transaction.
“Eliminating factory-farmed meats in the foods we feed our companion animals will have wide-ranging effects on our society, with ripples through our food chain, economy, and of course, environment,” Errett said in the announcement. “We can reimagine our entire food system, starting with what we put under our dogs’ and cats’ noses every day. I am personally devoted to this cause, as today’s announcement makes clear. I’m looking forward to continuing my important work on this amazing brand.”
But Wait a Minute…
While some of Because Animals’ assets are being sold to CULT, the remaining founder of Because Animals, Shannon Falconer, made it clear that the company is still a going concern and is still focused on creating cultivated meat-powered pet food.
Falconer and Because Animals sent the following statement to The Spoon, Green Queen and others:
“Cultured meat is what our customers and future manufacturing partners have been asking us for, and this is what we’re prioritizing. The company’s strength is our scientific prowess, and since scientific innovation is key to bringing cultured meat to market, we made the decision to apply laser focus to achieving that feat and to divest ourselves of any and all non-core assets that were not required to realize that objective.”
“We were surprised to see the announcement by CULT Food Science ‘CULT Food Science Announces Binding Letter of Intent to Acquire Because Animals Consumer Brands and Formulations’ as CULT was at no point involved in our divestiture, nor was Because Animals contacted by CULT prior to their publication. Although it’s not clear from their press release, the consumer brand ‘Because Animals’ was not acquired.”
“Because Animals retains all of its intellectual property relating to cultured meat – which is our core business – and we are committed to revolutionizing the pet food industry with this technology.”
Because Animals said in the statement the assets heading to CULT were nutritional yeast-based products it discontinued in late 2022. It was these product formulations for these products and two provisional patents related to the discontinued products it agreed to sell Errett.
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