- Organic skincare company Skin Elements has dropped 50 per cent after losing a Chinese distribution deal
- In March, the company partnered with a Chinese health company to sell its skin care products on the Chinese market
- Skin Elements says the deal wouldn’t be continuing due to the parties disagreeing on a number of matters
- The company is down 50 per cent today and is selling shares at one cent each
Organic skincare company Skin Elements has dropped 50 per cent after announcing it won’t be continuing with its China distribution deal.
In March, the company announced a deal with Henan Huatoa Health Management to sell its skin care products on the Chinese market. The deal also included a strategic equity investment by Henan in Skin Elements.
Henan is an advanced technology enterprise specialising in research and development of Chinese medicine health products, physiotherapy services, health management, and vocational skills training in Chinese medicine.
The completion of the agreement was under a number of conditions, which included a distribution agreement.
Under the distribution agreement, Henan was to place initial orders of $20 million over a three year period for Skin Elements products such as; Soleo Organics sunscreen, Complete Esscience natural skincare and PaypayaActivs therapeutic creams.
Skin Elements has said that the deal would not be continuing due to the parties not reaching an agreement on a number of matters, including the form of guarantee for delivery of the minimum sales orders.
“Despite significant effort by both parties and advisors, initial convertible loan note deposit of $200,000, and initial order of $300,000 for product delivered into China, Skin Elements advises that the parties were not able to reach agreement,” the company stated.
The convertible note of $200,000 is repayable by December 31, 2019, though Hena’s Chairman, Zeling Li, is seeking repayment within seven days.
With the agreement not proceeding, Zeling is resigning from the Board of Skin Elements as soon as possible.
The company has also announced it will be undertaking a placement to raise $1 million for working capital to support stock production. Details on the placement will be announced once its finalised.
Skin Elements is dedicated to designing and formulating natural and organic health and wellness products.
Its products include the award winning Soléo Organics (natural and organic sunscreen), PapayaActivs (natural therapeutic range), Esscience natural skincare, and Elizabeth Jane Natural Cosmetics brand.
The company has completed the development of an extended range of its Soléo organics sunscreen products. It now has three new formulas.
After acquiring the papaya based products from McMarthur Health, it now has two new natural skincare ranges. These include the PapayaActiv Therapeutic range of six products including arthritis, eczema and associated products and the Complete Esscience skincare range of 16 products.
Skin Elements is down 50 per cent on the Australian Securities Exchange and is selling shares for one cent apiece at 1:19 pm AEDT.