BioSyntech enters into loan agreement with Investissement Québec, extends maturity date on outstanding debentures and provides update on its strategic review
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LAVAL, QC, March 25 /CNW/ - BioSyntech, Inc. ("BioSyntech" or the "Company") (TSX: BSY), a biotechnology company developing biotherapeutic thermogels for regenerative medicine, today announced that it has entered into a loan agreement (the "IQ Loan") with Investissement Québec ("IQ") in the amount of $1 million to finance BioSyntech's refundable tax credits (the "Tax Credits") for 2009. The IQ Loan bears interest at a rate of prime plus 4% per annum, is repayable upon receipt by BioSyntech of the 2009 Tax Credits and is secured, among others, by a first ranking hypothec against the 2009 Tax Credits.
Concurrently with the execution of the IQ Loan, the terms of the currently outstanding subordinated secured convertible debentures of BioSyntech that were issued pursuant to the July 2008 public offering, the August 2009 private placement, and the October 2009 public offering (the "Existing Debentures") have been extended from March 31, 2010 to June 30, 1010 (the "Term Extension"). Any interest payments due to the holders of the Existing Debentures on March 31, 2010 have also been postponed to June 30, 2010 (the "Postponement of Interest").
Upon reimbursement of the IQ Loan, the Company intends to similarly finance its refundable tax credits for 2010.
The IQ Loan, the Term Extension and the Postponement of Interest have all been approved by written resolutions signed by holders of more than 66 2/3% of each of the series of the Existing Debentures.
Update on Strategic Review
The IQ Loan is expected to provide the necessary resources for BioSyntech to carry on its current operations until June 2010. During this period, the Company will continue the review of its strategic alternatives. With the assistance of its financial advisors, PricewaterhouseCoopers, BioSyntech has canvassed the market for potential partners in an effort to complete a transaction that would create value for the Company's shareholders. This process has yielded discussions with several potentially interested parties; however, the indications of interest received to date remain unsatisfactory. In parallel with these discussions, BioSyntech is also considering whether continuing its operations until it achieves its next major milestone, obtaining CE Mark in Europe, would be a preferable option, and is therefore reviewing financing opportunities. There can be no assurance that any transaction or financing will be completed.
BioSyntech is a medical device Company specialized in the development, manufacturing and commercialization of advanced biotherapeutic thermogels for regenerative medicine (tissue repair) and therapeutic delivery. BioSyntech's platform technology is a family of hydrogels called BST-Gel(R), some of which are liquid at low temperature and solid at human body temperature. These gels can be injected or applied to a specific local site and offer beneficial properties for the local repair of damaged tissue such as cartilage, bone and chronic wounds and provide the benefit of avoiding invasive surgery. The Company's lead, late-stage product, BST-CarGel(R) is currently undergoing an international pivotal trial. For additional information, visit www.biosyntech.com
This press release contains forward-looking statements and information which are subject to material risks and uncertainties. Such statements are not historical facts and are based on the current expectations of management. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking information. These risks include, but are not limited to, those associated with our capacity to finance our activities, the adequacy, timing, and results of our clinical trials, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of BioSyntech's products, the availability of government and insurance reimbursements for BioSyntech's products, the strength of our intellectual property, the success of our research and development programs, reliance on subcontractors and key personnel, and other risks and uncertainties detailed from time-to time in our filings with the Canadian securities commissions.
Readers should not place undue reliance on the forward-looking information, given that (i) our actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and (ii) certain material factors or assumptions which were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, could prove to be inaccurate. Additional information about (i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and (ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, is contained in BioSyntech's annual report and other documents filed from time to time with the Canadian securities commissions which are available at www.sedar.com. These statements speak only as of the date they are made, and we assume no obligation to revise such statements as a result of any event, circumstance or otherwise, except in accordance with law.For further information: Casey Gurfinkel, The Equicom Group, (416) 815-0700 x283, firstname.lastname@example.org