TORONTO, April 13, 2016 /CNW/ - Biosign Technologies Inc. (TSXV: BIO) ("Biosign" or the "Company") announces that it has ceased its operations. Quob Park Estates ("QPE") has confirmed that it is no longer willing to advance additional funds to Biosign who cannot meet its ongoing obligations.
Over the past 18 months, the Company pursued efforts to meet its short term and long term financial obligations by increasing its short term debt, selling assets to raise cash and reducing on-going expenses. In addition, the Company's Chairman and CEO provided loans to support the Company's operations while the Biosign Directors tried a number of avenues to raise additional equity capital, but the existing Biosign debts made this option too difficult.
In January 2016, the Board of Directors concluded that there was no alternative other than to sell its German investments to QPE with the potential to provide an opportunity to repay creditors and provide a return of capital to shareholders.
Pursuant to a letter of intent dated January 21, 2016 ("LOI"), Biosign intended to sell to QPE its German investments by agreeing to sell 70% of the shares issued and outstanding of Aiomed GmbH ("Aiomed") and 100% of the shares issued and outstanding of Biosign Europe Technologies GmbH ("Biosign Europe"). Biosign owns only 38.5% of the issued and outstanding shares of Aiomed and does not have control of its operations. Biosign anticipated to acquire additional shares of Aiomed in order to sell 70% of said shares to QPE and had entered into a non-binding letter of intent to acquire additional Aiomed shares but was not able to negotiate a final agreement.
In conjunction the proposed purchase of Biosign's German operations, QPE had agreed to provide loans to Biosign up to €650,000 (circa CAD$1 million) to fund the overall operations of Biosign ("QPE Loan"). Since the completion of the LOI, QPE advanced to Biosign Europe €450,000 under the QPE Loan which is secured by a first charge over all the shares in Aiomed and Biosign Europe held by Biosign as well as an assignment of all the intercompany loans payable to Biosign and is also guaranteed by the Company. Unfortunately, after completing its due diligence process, QPE decided that the original proposed transaction did not meet its requirements and combined with the fact that Biosign was unable to secure additional Aiomed shares to complete the purchase transaction, QPE decided to terminate its funding. The assets of Aiomed were transferred to QPE in return for royalties payable to Aiomed based on future revenue. Biosign cannot currently collect any of the intercompany loans and fees due from Aiomed and Biosign Europe and cannot predict whether any such fees and loans will ever be repaid. Since Biosign has currently no financial means to meet its obligations, the Company is forced to cease operations.
About Biosign Technologies Inc. (TSXV: BIO) Biosign is a developer of world class healthcare software solutions targeted at the Home Care markets with operations in Canada and Germany.
This release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words believes, expects, anticipates, estimates, intends, plans, or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and Biosign's actual results could differ materially from those anticipated. Forward looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in the company's filings with Canadian securities regulators (www.sedar.com).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Biosign Technologies Inc.
For further information: Biosign Contact Information: Michael Gross, CEO and Chairman, Biosign Technologies Inc., Phone: (416) 218-9800, Email: email@example.com