Tonisity International Provides Update On Business Growth And Commercial Milestones

March 3, 2022, 3:00 pm

Dublin, Ireland (March 3, 2022) – Tonisity International Limited (“Tonisity”), an animal health and nutrition company based in Ireland, is pleased to provide an update on its commercial milestones as it continues to rapidly grow its business across the globe.

Tonisity is currently focusing its patented technology in two specific markets: (1) protein drink products for the enhancement of swine production; and (2) novel companion animal (dogs and cats) drink products that leverage the existing ‘healthy drink’ marketspace that currently exists for humans.

Global Footprint

Since 2017, Tonisity has established a growing distribution network across the United States, Europe, the Asia-Pacific and South America. For its swine products, Tonisity currently has distribution agreements with 45 distributors in 54 countries and over 40 million pigs have consumed Tonisity’s products worldwide.

Europe

Tonisity commercialized its swine business in Europe in 2017, and currently has a number of customers and distribution agreements on the continent.

Tonisity’s companion animal products were soft launched commercially into the European market in the first quarter of 2021. The companion animal product range became available for resale in January 2021 and was distributed along with promotional materials such as leaflets and point-of-sale displays to continental European, British and Irish distributors. Particular emphasis was placed on Italy and Spain, along with Britain and Ireland, as these markets had shown the most promising initial feedback. Since this initial launch, companion animal products have been sent to Hong Kong, the Netherlands, France, Germany, Denmark, Iceland, Romania, Portugal, Switzerland and Iceland.

In the second half of 2021, Tonisity signed supply agreements with Fressnapf, the largest pet chain in Europe, to sell Tonisity’s companion animal products through their 1,400 retail stores in 12 countries across Europe. Sales are expected to commence in mid-April of this year. In the first quarter of 2022, Tonisity signed agreements with another leading retail chain in Europe to sell its companion animal products through their 130 retail stores in Germany and Austria. With respect to the latter, sales are anticipated to commence in late March of this year.

Expansion in the United States

In August 2021, Tonisity signed a distribution agreement with one of the largest distributors of animal health products in the United States. Under the agreement, the distributor is expected to introduce all of Tonisity’s swine products to every pig farm in North America under this distributor’s umbrella. At present, the Tonisity team is actively working with the distributor to educate their sales force on the
benefits of the swine products, sales strategies and holding joint meetings with potential customers. With respect to its companion animal business in the United States, in August 2021, Tonisity signed a distribution agreement with the largest distributor for pet veterinary clinics and pet hospital customers in the United States. The distributor currently has over 40,000 clinic and pet hospital customers. It is expected that the distributor will also distribute Tonisity’s companion animal products through its extensive in-store retail channel. The distributor has conducted extensive trials on Tonisity’s companion animal products and this agreement is a tremendous milestone for Tonisity’s business and a validation of its products. Legally compliant packaging for Tonisity’s companion animal products became available in the United States in the third quarter of 2021, and since such time, five 40-foot containers of companion animal products have been shipped to Tonisity’s US operations in preparedness for sales to distributors and direct to large retailers. The potential sales that these shipments could yield to Tonisity is US$560,000. We expect repeat sales and increased sales velocity as we increase marketing and education spend. In Q1 2022, Tonisity began selling its companion animal products on www.chewy.com, which is an American online retailer of pet food and other pet-related products with annual sales of over US$7 billion.

Joint Venture in China & Taiwan

In July 2020, Tonisity entered into a joint venture agreement, as the controlling partner, with a Chinese minority partner in order to market Tonisity’s swine and companion products in China and Taiwan, including Hong Kong. Tonisity contributed technology and intellectual property to the joint venture, while the joint venture partner contributed funding, senior local management and a sales, marketing and logistics team. China is the largest consumer of pork worldwide, accounting for over 54 million tonnes of consumption of the global 112 million tonnes of pig consumption (1).

Tonisity companion animal products were launched in Hong Kong in January 2021, while Tonisity Px was simultaneously being soft-launched with select swine producers in China. Tonisity Px was granted product registration by the Chinese Ministry of Agriculture and Rural Affairs in December 2021 and we expect full registration of the remainder of our products in Q1 2022. In anticipation of this milestone, our Chinese partners have placed orders and are building inventory to meet their expected marketing spend.

Expansion Into Brazil

In February 2022, Tonisity entered into a memorandum of understanding with a minority joint venture partner to produce and distribute locally Tonisity’s swine and companion animal products. The joint venture partner is part of a group of companies with over 20 years in the cattle and swine industries and includes a pet pharmaceutical company in Brazil. Tonisity is expecting to enter into related binding agreements in connection with this memorandum of understanding in Q2 of 2022, and in respect of the companion animal products, expects to be producing 15,000 pouches of product per shift, once fully operational. Brazil is the third largest global swine producing country (2) and under this commercial arrangement, Tonisity expects to produce finished products from a pre-mix (supplied from Ireland) to minimize import taxes which are currently the major barrier to Tonisity competing in this large market. In addition, Brazilian-produced product could then supply the broader South American market, saving on costs and delivery timelines.

Amazon

Tonisity is now selling its companion animal products on amazon.com in the United States and the UK and is expecting to begin selling its companion animal products on Amazon in France, Germany, Italy and Spain in March 2022.

Awards

Tonisity continues to win awards with its products from a number of leading, globally-recognized organizations:

New Products

In 2022, Tonisity is on track to launch several new products focused on the swine and companion animal segments. With regard to additional swine products, Tonisity is far advanced in the development of Tonisity PxM, a product that combines with milk replacer, which is widely used in farrowing barns to supplement the sows’ milk. Roll out of the product is expected in Q3 of 2022. PxM will be highly complementary to Tonisity’s existing Px and PxW products, which are both focused on the farrowing and weaning stages of the lives of piglets. Tonisity’s suite of Px products provides for a better survival rate for the piglet’s life, especially, during the first month of the piglet’s life, in which, more than 15% of piglets die much due to a lack of nutrition. The increased survivability of the piglet better enables the farmer to sell the piglet into the market with return of investments of between 5-10x to the farmer. These benefits are
especially important in an age of Africa swine fever and increased labor and feed cost inputs.

With respect to its companion animal products, in 2021, Tonisity began to develop a range of prebiotic dog chew sticks. These ‘DoggyRade Chewies’ combine the key beneficial ingredients from DoggyRade Pro into a solid ‘treat-type’ product that can easily be administered on a daily basis to further promote gastrointestinal health in dogs, which is a major concern of dog owners. As of Q1
2022, the DoggyRade Chewies have been formulated, manufactured in sample quantities and are in the final stages of palatability testing. DoggyRade Chewies are expected to be in production in Q2 2022 and will be sold through the various sales distribution channels mentioned above and across the various regions discussed.

In January 2022, Tonisity developed a formula for a simple bland powdered diet that will be mixed with DoggyRade Pro, which can be given at home by the owners of dogs with minor gastrointestinal upsets. Commercial launch is expected to be in Q2 2022 as a digestive first aid kit and will sit in the complementary feed class as do the other Tonisity ‘Rade products. In Q2 2022, Tonisity expects to launch a ‘travel kit’ for dog owners, which is simply a re-packaging of existing ‘Rade products in different combinations, so as to be convenient for owners who are away from home with their pets.

For More Information on Tonisity

Tonisity is an animal health and nutrition company based in Ireland that is currently focusing its patented technology in two specific markets: (1) isotonic products for the enhancement of swine production; and (2) novel companion animal nutrition products. Tonisity is focused on creating positive physiological changes by addressing the issue of intestinal health of young animals, thus improving
their overall health, leading to better lifetime performance. With respect to novel companion animal products, Tonisity is poised to become the first mover and market leader in a targeted nutrition approach for pets – which is a rapidly growing market across the globe. For more information on Tonisity’s isotonic business, visit www.tonisity.com. For more information on Tonisity’s companion
animal business, visit www.doggyrade.com.

ON BEHALF OF THE BOARD

“Arie Halpern”

Arie Halpern
CEO and Chairman
Email: arie@tonisity.com

Forward-Looking Statements

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Tonisity’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.

The forward-looking statements and information in this press release include information relating to the business plans of Tonisity, including expansion in Europe, the United States, China and Taiwan and Brazil, and the development of new product lines in both the swine and companion animal product lines.

Such statements and information reflect the current views of Tonisity. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: Tonisity’s ability to raise capital to maintain its growth and business objectives, Tonisity’s ability to negotiate and enter into binding agreements with counterparties in geographic markets that are part of its expansion plans, changes in laws and regulations that could adversely affect Tonisity’s business, growth or results of operations, Tonisity’s ability to attract and retain customers and consumers and impacts of the COVID-19 pandemic.

There are a number of important factors that could cause Tonisity’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: limited business history of Tonisity; risks related to Tonisity’s corporate strategy including that previous and future acquisitions do not meet expectations; disruptions or changes in the credit or security markets; results of operation activities; unanticipated costs and expenses, fluctuations in commodity prices, and general market and industry conditions; protection of Tonisity’s intellectual property; disruption at any of Tonisity’s facilities including as a result of the current COVID-19 pandemic; effect of public health crises, including the current COVID-19 pandemic; Tonisity’s supply chain management; availability of suppliers of raw materials; limited or disrupted supply of key ingredients; the availability of key ingredients for Tonisity’s products; failure to expand production capacity; effect of product innovation; failure to retain current customers and/or recruit new customers potential volatility of share price; no assurance of active market for shares; dividends; global financial conditions; the effect of product labelling requirements; price of raw materials; consumer trends; publication of inaccurate or unfavourable research and reports; management and conflicts of interest.

Tonisity cautions that the foregoing list of material factors is not exhaustive. When relying on Tonisity’s forward-looking statements and information to make decisions, readers should carefully consider the foregoing factors and other uncertainties and potential events. Tonisity has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

The forward-looking information contained in this press release represents the expectations of Tonisity as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While Tonisity may elect to, it does not undertake to update this information at any particular time, except as required by applicable laws.

 

(1) https://ourworldindata.org/meat-production

(2) Shahbandeh M. Pig population worldwide 2021 | Statista. Apr. https://www.statista.com/statistics/263964/number-of-pigs-inselected-countries/

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