Agreement Includes Refinancing of Existing Long-Term Debt
TORONTO, Jan. 22, 2014 /CNW/ - Microbix Biosystems Inc. (TSX: MBX), an
innovator of biological products and technologies, announced today it
has signed a letter of intent to finance the development of the
LumiSort® prototype instrument for its semen sexing technology.
LumiSort® is a completely new instrument-based livestock sex selection
technology that will significantly improve the yield and quality of
sexed semen leading to higher conception rates and better economics
compared to current methods. LumiSort® employs novel and innovative
instrument designs that address fundamental problems with existing
commercial sex selection technologies, based on established Microbix
The new financing for the development of the prototype instrument is
being provided by a holder of $4.5 million of existing Microbix
convertible debentures. The new financing agreement represents total
new money of $2.75 million, comprised of: 1) a new $1.5 million
convertible debenture at 9% interest due in 2028 that is convertible
into Microbix common shares at $0.35 per share, and 2) a balance of
$1.25 million that will be payable, at the option of Microbix, upon the
achievement of certain development milestones.
The debenture holder has also agreed to refinance $2.0 million of the
$4.5 million of existing debentures, removing their convertibility
option and making this debenture callable by Microbix upon 3 months
The incremental impact of these debenture changes adds approximately
2,000,000 shares to the Company's total share count on a converted
basis. In addition, the debenture holder acquires a 10% interest in the
The Company also announced the involvement of Lathrop Engineering of
California in the LumiSort project. Lathrop helped Microbix develop the
LumiSort® proof-of-concept in 2011 and has now been engaged to design,
build and test the prototype. Lathrop will initiate the prototype
development work in the very near future and the Company anticipates
completion of the prototype later this year.
Vaughn Embro-Pantalony, President and Chief Executive Officer said, "Our
new agreement with the debenture holder is the culmination of several
months of review and negotiation which has resulted in a comprehensive
and balanced solution addressing many key objectives of our Company.
First, we now have the required funding to demonstrate the superior
features of our LumiSort® technology. Second, we have negotiated more
favourable terms on a significant portion of our existing debt load
-thereby reducing the carrying costs and strengthening our balance
sheet. Finally, we have accomplished both of these important objectives
with minimal dilution impact on our existing shareholders, while at the
same time retaining 90% ownership of the LumiSort® venture."
Embro-Pantalony continued, "We are very excited to be launching the
development of the LumiSort® prototype in the coming days, and we look
forward to providing ongoing progress reports during 2014."
Microbix' semen sexing technology will enter the livestock artificial
insemination market estimated at $2 billion. Microbix has already
negotiated term sheet agreements for its technology with 25% of global
livestock genetics companies, agreements that will become effective
once LumiSort® is commercially available. Protected by a strong
intellectual property position, Microbix expects LumiSort® will become
the industry standard for livestock producers.
About Microbix Biosystems
Microbix Biosystems Inc. specializes in the development of biological
solutions, including products for vaccine and diagnostics markets
worldwide. The company owns intellectual property for an approved
biological drug, a vaccine technology and an animal reproduction
technology. Established in 1988, Microbix is headquartered in Toronto.
Microbix' pipeline of innovative technologies and products includes
LumiSort® semen sexing technology for the livestock industry,
Kinlytic®, a thrombolytic drug with several approved and potential
applications including the treatment of life-threatening blood clots,
and VIRUSMAX®, a proprietary technology for increasing virus yields in
influenza vaccine manufacture.
This press release may contain forward-looking statements which are
subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in the forward-looking
statements including the risks associated with litigation, operations
in foreign jurisdictions, foreign currency and exchange rate risk, and
risks of raising capital on acceptable terms or at all. These
statements reflect management's current estimates, beliefs, intentions
and expectations; they are not guarantees of future performance. The
Company cautions that all forward-looking information is inherently
uncertain and the actual performance may be affected by a number of
material factors, many of which are beyond the Company's control.
Accordingly, actual future events, conditions and results may differ
materially from the estimates, beliefs, intentions and expectations
expressed or implied in the forward-looking information. All
statements are made as of the date of this news release. The Company
is under no obligation to update or alter any forward-looking
Please visit www.sedar.com for recent Microbix Biosystems Inc. filings on its pipeline products
and financial information.
SOURCE: Microbix Biosystems Inc.
For further information:
Visit www.microbix.com or contact: Vaughn C. Embro-Pantalony, CEO, (905) 361-8910 (ext. 350) or Charles Wallace, CFO (905) 361-8910 (ext. 255).