Welcome to your Monday Biotech Deal Review for October 21, 2013! After a busy few weeks in September and October, the past week saw a slow in activity across the sector. Nonetheless, hit the break to get a rundown on this week’s major stories!
Financing
SQI Diagnostics Inc. (TSX-V: SQD) announced that it has received approval from the TSX Venture Exchange to extend the expiry of 2,276,000 outstanding common share purchase warrants (“the Warrants”) of the Company, which were issued in connection with the Company’s October 2011 private placement financing. Each warrant, as amended, entitles the holder thereof to purchase one common share of the Company at a price of $2.50 per common share at any time until the close of business on October 25, 2016, provided that if on any day that is 12 months following October 26, 2011 the 20-day volume weighted average trading price of the Common Shares on the TSX Venture Exchange equals or exceeds $3.25, then upon the Corporation sending the Holder written notice of such date and issuing a news release announcing such date, the Warrants shall only be exercisable for a period of 30 days following the date on which such written notice is sent to the Holder.
Imperial Ginseng Products Ltd. (TSX-V: IGP) (the “Company”) announced that it has entered into a debt settlement and debt reorganization agreement (together the “Debt Settlement Agreement”) with certain officers, directors and significant shareholders of the Company (the “Debt Holders”). As at June 30, 2013, the Company was indebted to the Debt Holders in the amount of $2,984,944 consisting of a current debt of $2,707,578 and unpaid dividends on Class “A” preference shares of $277,366. Under the Debt Settlement Agreement, $1,114,944 of the indebtedness will be settled by the issuance of 4,129,422 common shares of the Company at the deemed price of $0.27 per share and the remaining $1,870,000 of the indebtedness will be repaid under the terms of debentures (the “Debentures”) having a term of eight years commencing January 1, 2014, and to be secured by all of the assets of the Company. The Debentures will be subordinate to the Company’s indebtedness to its commercial bank. During the first four years of the term of the Debentures, they will not bear interest and no repayments of principal will be required. During the next four years of the term of the Debentures, principal shall be repayable as to 25% per annum each January 1, commencing January 1, 2018, and shall bear interest thereafter at the rate of 9% per annum.
Other
Primera Bioscience Research Inc. (the “Company”) announced that the Company is proposing to consolidate its common shares (the “Shares”) on the basis of a range between one (1) post-consolidation Shares for between two (2) and five (5) pre-consolidation Shares (the “Consolidation”), subject to the approval of the Company’s shareholders (the “Shareholders”). Implementation of the Consolidation will not materially affect the percentage ownership of the Shareholders and the Consolidation will merely proportionally reduce the number of Shares held by the Shareholders. As at the date hereof, there are an aggregate of 4,375,000 pre-Consolidation Shares are issued and outstanding. It is expected that, upon implementation of the Consolidation, the aggregate number of shares issued and outstanding will be between 875,000 Common Shares on the basis of a five-to-one ratio, and 2,187,500 Common Shares on the basis of a two-to-one ratio. The Company further announces that, subject to the approval of the Shareholders, it will change its name to “Primera Research Inc.” (the “Name Change”) or such other name as may be determined to be appropriate by the Company’s board of directors. The management is proposing to change the Company’s name because the Company is considering a number of initiatives in the area of technology and development outside of the biotechnology sector and it is believed that a name change to reflect this broader strategy is appropriate. Shareholders will be asked to approve the Consolidation and the Name Change at the special meeting of the Shareholders to be held on November 12, 2013 (the “Special Meeting”).
Valeant Pharmaceuticals International, Inc. (NYSE: VRX; TSX: VRX) announced the interim final award in its previously disclosed arbitration with Anacor Pharmaceuticals, Inc. to resolve a breach of contract dispute arising out of services provided by Dow Pharmaceutical Sciences, Inc., prior to its acquisition by Valeant. As a result of the September 2013 arbitration hearing, Valeant has been ordered to make a one-time payment of $100 million in damages plus costs and fees to Anacor. The arbitrator did not grant an injunction or ongoing royalty, which means that, while still subject to regulatory approval, nothing in the arbitrator’s order prevents the launch of Jublia® (efinaconazole 10% topical solution).
Axxess Pharma Inc. (PINKSHEETS: AXXE) announced it has incorporated a wholly-owned subsidiary AllStar Health Brands Inc. This new company will specialize in the online and retail sales of all sports-branded products and other to-be developed natural health products owned by Axxess. AllStar Health Brands expects to be a strong presence in the online marketplace for Axxess Pharma focussing on international and domestic sales.
