eSense-Lab Limited announced that it has entered into a binding Joint Venture with ANC Enterprises Pty Ltd. The deal will see ANC formulate and manufacture a range of skin care, hair care and hand sanitiser products containing eSense's proprietary terpene mixes. Under the agreement, eSense will provide specific terpenes uniquely developed for each product category and ANC will manufacture the resulting products. ANC has had over 10 years of operating history and has significant experience in manufacturing unique products for uses including skincare, sports and nutritional supplements, infant milk powders, bath salts, essential oils and pharmaceuticals. Their 100% owned, 600 square-metre GMP certified facility is capable of producing 16,000 - 20,000 bottles from two 8-hour shifts per day, leading to 5 million bottles produced annually. ANC currently manufactures natural plant focussed products including New Age BotanicalsTM, a skin-care brand which contains no artificial colours or ingredients. The range includes regenerating creams, nourishing creams, face masks and vitamin C creams. ANC has invested heavily in innovative equipment and continues to make improvements to their processes so as to minimise waste and efficiently deliver more output to meet consumer demand from its GMP certified facilities. ANC operates a team of 6 full-time employees and between 10-20 casual employees at any one point in time. The key terms of the agreement are: the agreement remains subject to certain conditions precedent, including mutual due diligence, receipt of any regulatory and shareholder approvals, and executing certain definitive agreements, including a shareholders' agreement, supply agreements, manufacturing and distribution agreement; the JV company will be owned 95% by eSense and 5% by ANC, based on an initial cash contribution to the JV of $95,000 by eSense and $5,000 by ANC; ANC shall have a 12 month option to increase its holding to 50% through an additional capital contribution. The amount that ANC will pay to acquire such shares will be $90,000 after 1 month and increase by $10,000 each calendar month thereafter, eg. if ANC exercises its option after 6 months, it will pay $140,000; if required, eSense will make additional loan funds available to the JV for working capital purposes; eSense will supply terpenes to the JV Co for an Initial 10-year term on a cost plus arrangement; ANC will grant JV Co a royalty-free, irrevocable, perpetual, license for use throughout the world of any formulations, service marks, trademarks and trade names for the products produced for the JV purpose, provided the JV Co pays ANC a formulation fee for any product it develops. This fee will agreed between and the JV Co before the commissioning of any new products; on formation of the JV Co, the parties have agreed that the following minimum initial orders will be made: 500,000 units of Terpenes for hand sanitiser; 100,000 units of Terpenes for skin care; 100,000 units of Terpenes for hair care. These minimum orders are based on the anticipated initial production run for products to be undertaken by the JV Co. Whilst the detail has not been agreed as yet, ESE anticipates that the payment terms for the supply of Terpenes to the JV Co will operate prior to sales occurring. It is anticipated the JV will pay $100,000 upfront for the Terpenes and remainder upon sales occurring; and terpenes based skin care, hair care and hand sanitiser products to be manufactured exclusively by ANC under a cost-plus arrangement. ANC was introduced to eSense-Labs Limited through EverBlu Capital. EverBlu was not paid any fees in relation to this transaction.