PENTICTON, BC / ACCESSWIRE / August 20, 2021 / EastWest Bioscience (the "Company" or "EastWest") (TSXV:EAST) reports that, on July 8, 2020, the US Securities and Exchange Commission (the "SEC") issued an order of suspension of trading in shares of EastWest traded on the US "over-the-counter" market (the "Order"). The Order referenced the accuracy and adequacy of information that was contained in the press release of EastWest distributed on May 28, 2020 regarding the U.S. Food and Drug Administration's (the "FDAs") approval of the Company's hand sanitizers (entitled "Eastwest Bioscience 80% Ethyl Alcohol Hand Sanitizer Receives FDA Approval").
This news release is a correction and clarification to the May 28, 2020 release and its prior corrective release dated July 23, 2020 to further clarify information pertaining to the Company and its operations as contained therein and to correct a disclosure about a phone call that occurred with FINRA, not the SEC as discussed below.
Hand sanitizer is considered an "over-the-counter" ("OTC") drug which requires a National Drug Code ("NDC") to be manufactured and marketed. Under FDA rules, a Domestic (US Facility) hand sanitizer manufacturer must register their establishment with the FDA and complete a hand sanitizer listing to acquire an NDC within a specified period of time. A Foreign hand sanitizer manufacturer must complete registration and drug listing before they begin marketing in the USA.
EastWest has secured hand sanitizer supply both in the US and Canada to ensure that it can meet demand in an efficient manner on both sides of the border.
Contrary to the Company's May 28, 2020 news release, the Company nor its manufacturing subsidiary in Canada, Orchard Vale Naturals, have received FDA approval for its hand sanitizer. However, the Company is abiding by the FDA's requirement, by and through the fact that hand sanitizer sourced for distribution to US consumers, is done so from a manufacturer with an NDC number listed with the FDA. The Company did not communicate this clearly in the previous news release and would like to ensure the public that our manufacturing supplier has an NDC number and is registered with the FDA.
In Canada, our raw materials supplier has procured an agreement with an existing Health Canada licensed bulk material supplier of hand sanitizer. This hand sanitizer is then shipped to our contract manufacturer in Ontario and our Penticton, BC facility for further processing, including packaging, bottling, and labelling. The product is then shipped to our Canadian customers from each facility.
Processing at the facility in Penticton is conducted by Orchard Vale Naturals ("OVN") which is the supplements and health products manufacturing subsidiary of EastWest. As a health supplement manufacturer that is Health Canada Licensed, under License #301957, OVN was able to obtain permanent Natural Product Numbers ("NPN") for the hand sanitizers. The Company wishes to highlight the ability of OVN to obtain permanent NPNs, in contrast to companies that have been granted temporary authorization by Health Canada to manufacture and sell specific hand sanitizers and hard-surface disinfectants. Health Canada conducts annual inspections of the OVN facility and approves its Standard Operating Procedures to ensure all products released by OVN are produced under the Good Manufacturing Practices guidelines.
A secondary facility in Ontario is also Health Canada Licensed and provides shipping savings to our East Coast customers and more importantly, on-site bottling production. Supply of packaging material has been a challenge globally due to COVID-19, and access to packaging materials at this facility ensures that our hand sanitizers can be packaged and delivered to our clients in a timely manner.
These hand sanitizers are marketed through Sangster's Health Centres stores under the Sangsters Brand with NPN #80101027. Sangster's Health Centres is a wholly owned subsidiary of EastWest with retail locations throughout Canada, predominantly in Saskatchewan.
The same hand sanitizers are also marketed to independent retailers, wholesalers, and distributors under the brand Natural Advancement with NPN #80101027. Additionally, OVN provides private labelling and contract manufacturing for retailers and distributors who would like to use their own brand name(s).
As a wellness company with a Health Canada licensed facility to manufacture health supplements and a national chain of Health Centres, EastWest understands firsthand the importance of consumer health and safety. It has conducted its due diligence to ensure that any products it manufactures and/or distributes are safe to be consumed by its customers and have followed regulations on both sides of the border to ensure that this is the case.
The TSX Venture Exchange ("TSXV") halted trading in EastWest stock on July 9th, 2020 as a response to the SEC suspension of trading of EastWest shares in the OTC alternative markets in the US. EastWest previously traded on the pink sheets in the US through a symbol that was not initiated by the Company.
In June, 2020, EastWest management was contacted by FINRA in relation to the Company's May 28, 2020 news release and the US market reaction to the news. FINRA had questions regarding the FDA approval process and, more importantly, they were concerned about the concurrent trading volume on the OTC alternative markets. During the call, the FINRA staff provided several names that may have been involved in suspicious trades possibly contributing to the volatility. The Company is unaware of any of the named parties. Further, all of the Company's Investor Relations arrangements have been filed with the TSX Venture Exchange and disclosed in accordance with TSX Venture Exchange Policies. FINRA also enquired about the management trading history and asked if management had sold stock in the recent run-up. EastWest management clarified that they have in fact been purchasing stock in the open market since April 2020. In addition, EastWest senior management recently completed a debt conversion at $0.05.
The company has received no further communication from FINRA. The Company is providing this corrective response to ensure information pertaining to the Company's production and distribution of hand sanitizer as disclosed to the public is clear and accurate.
About EastWest Bioscience Group
EastWest Bioscience is a vertically integrated wellness company with a multitude of business units and assets that allow for seed-to-sale supply chain management. We source our raw material, process, manufacture, test, brand, market, and distribute our products to our customers in Canada, the United States, and beyond. The Company owns and operates retail and manufacturing subsidiaries.
The Company's retail subsidiary is the award winning, Canadian, natural health retail franchise - the Sangster's Health Centre's - with over 40 years of legacy in the health and wellness industry. Sangster's goal is to provide natural choices through quality products and educated advice for a healthy lifestyle. Sangster's Health Centres occupies a unique position in the industry, the stores provide vast knowledge and safe natural remedies for the prevention and treatment of disease and ailments. Sangster's introduction and development of over 202 exclusively labeled products (vitamins, mineral, herbs, proteins, natural body care and organic foods) catapulted Sangster's name and product into a large number of Canadian households. From a solid base in Saskatchewan, Sangster's has become a national brand name with franchise stores located across Canada.
Orchard Vale Naturals is the Company's manufacturing arm that is certified with a Health Canada Site License and has GMP Certified NHP Manufacturing capabilities. Orchard Vale Naturals specialize in custom blends and production runs of all sizes, small to large, for top-quality products with quick turnaround times. Orchard Vale Naturals operate out of the 34,000 sq Health Canada licensed facility in Penticton, British Columbia that is owned by EastWest Bioscience and is the Head Office for all its Canadian operations.
SOURCE: EastWest Bioscience Inc.
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