Concurrently Renegotiates Agreement with Animal Genetics Firm
TORONTO, Feb. 20, 2014 /CNW/ - Microbix Biosystems Inc. (TSX: MBX), an innovator of biological products and technologies, today announced that it has closed on new financing for the development of LumiSort® and also renegotiated a 2010 agreement with an animal genetics company.
Microbix confirms that the recently announced financing for the development of its LumiSort® prototype has now closed with the Company's existing debenture holder and that $1,500,000 in new funding has been advanced to the Company by way of 9% secured convertible debenture in the principal amount of $1,500,000 convertible at $0.35 per share.
The terms related to the financing include an option that, if exercised by Microbix, would require the debenture holder to make additional payments of up to $1.25 million based on the achievement of certain development milestones. In exchange, the debenture holder would then earn up to 9.25% of the gross revenue from LumiSort®. It is important to note that this option is exercisable entirely at the discretion of Microbix.
This new Lumisort® financing replaces an earlier commercial agreement with an animal genetics company. That earlier agreement required that partner to invest up to $2,000,000 based on the achievement of certain milestones. In exchange, the partner would have been eligible for 11.25% of the gross revenue derived from the use of LumiSort® technology.
As the agreement between Microbix and the animal genetics company has been revised, the investment of the animal genetics company is capped at its current level of $750,000 with no requirement for additional milestone payments. In exchange, the partner's share of future gross revenue is also capped at 2.0%, a reduction from the 4.2% of the original agreement. Furthermore, the revisions remove a prior right of first refusal on future Lumisort® partnering arrangements in favour of animal genetics company.
Vaughn Embro-Pantalony, President and Chief Executive Officer said, "Our LumiSort® financing agreement provided a unique opportunity to re-open negotiations with our animal genetics partner. With both of these agreements concluded, we can now consider other, more attractive, financing alternatives to complete the necessary development of Lumisort®. I am also pleased that we have restored our ability to independently decide on future partnering opportunities for Lumisort®. We are now planning to begin development work in the coming days and I look forward to providing progress reports on our way to completion of the Lumisort® prototype later this year."
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 and is protected by a strong intellectual property position.
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. 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 information.
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).