CULT Food Science Corp. (CSE: CULT, OTC: CULTF, FRA: LN00), a Canadian company focused on advancing cellular agriculture and lab-grown meat technologies, has executed a binding Letter of Intent (LOI) to acquire The Better Butchers Inc. (TBB). The transaction involves CULT acquiring 100% of TBB’s shares, subject to due diligence, regulatory approvals, and other conditions.
The Better Butchers was founded in 2022 with the mission to be the first to bring cultivated meat to market in Canada, along with opening a cultivated meat butcher shop in Vancouver. Recently, however, the company has been focusing on mycelium-based meat alternatives.
Using fungi-derived mycelium proteins through biomass fermentation, The Better Butchers has introduced a range of plant-based products designed to offer both nutritional value and familiar textures. These include mycelium-based crumbles in various flavors, such as chorizo and Italian, as well as an unflavored version.
The company has indicated that it aims to eventually create hybrid products that combine mycelium and cultivated meat. However, it views these initial offerings as a way to generate revenue and fund future research into cultivated meat.
Mitchell Scott’s role
Mitchell Scott, CEO and co-founder of The Better Butchers, also serves as the current CEO of CULT Food Science. Scott joined CULT in November 2023, following the resignation of the previous CEO, Lejjy Gafour. Prior to founding TBB, Scott co-founded the plant-based meat brand The Very Good Butchers, which entered receivership at the beginning of 2023.
In a statement about the deal, Scott posted, “Fast forward to just over a year later, and I joined the team at CULT Food Science. I joined CULT for two main reasons: the breadth and strength of their portfolio companies and their focused investment in the cellular agriculture space. Along with their desire to acquire a majority position and build some of the first companies in the space to commercialize these exciting new technologies.
Under the terms outlined in the LOI, CULT will issue 40 million common shares to TBB’s shareholders, valued at $0.05 per share, for a total consideration of $2 million. In addition, CULT may issue up to 10 million additional shares based on TBB achieving certain post-closing milestones. CULT will also provide at least $300,000 in funding to support TBB’s business development efforts. Following the acquisition, Mitchell Scott and Celeste Trujillo, TBB’s co-founder, will join CULT’s board of directors, with Trujillo assuming the role of CEO of TBB.
The transaction is subject to several conditions, including the completion of due diligence, regulatory approvals, and approval from CULT’s shareholders. CULT is also required to complete a financing round, raising a minimum of $1.5 million within 60 days of the transaction’s closing.
CULT’s strategic moves
Similarly to TBB, CULT Food Science began with the goal of leading innovation in Canada’s cellular agriculture sector, focusing on partnerships with academic institutions and investments in international cultivated meat startups, including a stake in Eat Just. Last year, CULT signed an LOI to acquire the cultivated pet food brand Because, Animals and partnered with South Korean startup ‘Everything But’ to bring cultivated chicken for pet food to the US.
In light of regulatory hurdles around cultivated meat, the company went ahead and launched a line of plant-based, freeze-dried dog and cat treats under its Noochies! brand, featuring its proprietary nutritional yeast ingredient, Bmmune. These shifts reflect both companies’ efforts to bring products to market more quickly while navigating the challenges of cultivated meat development and regulation. Noochies! has recently begun taking regulatory steps to launch cultivated meat pet foods in the US, including starting the FDA approval process.
Next steps and future outlook
The acquisition of The Better Butchers is expected to bolster CULT’s position in the cellular agriculture sector. Both companies are working to finalize the terms of the deal, with a definitive agreement to be signed by February 10, 2025. CULT has stated that further updates will be provided as the transaction progresses. The deal is not expected to constitute a change of business for CULT, in accordance with Canadian Securities Exchange (CSE) policies.
Scott continued, “Today we are taking steps to bring both companies together with the announcement of a binding LOI for CULT to acquire The Better Butchers. I believe this is a great opportunity for both companies to continue growing and delivering value to their shareholders.”
