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Vivione Biosciences Inc. Announces Loan Agreement


9/13/2013 8:44:08 AM

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CALGARY, Sept. 12, 2013 /CNW/ - Vivione Biosciences Inc. ("Vivione") (TSXV: VBI) is pleased to announce that it has entered into a loan agreement (the "Loan Agreement") with Mr. Glenn Smith, a director of Vivione (the "Lender"), whereby the Lender has agreed to provide Vivione with a revolving line of credit facility up to a maximum amount of CDN $1,000,000 for a two-year term (the "Loan"). The Loan will bear interest at a rate of 1% per month on the daily outstanding balance under the Loan, with interest calculated and payable monthly. The Loan is subject to the acceptance of the TSX Venture Exchange.

Pursuant to the terms of the Loan Agreement, Vivione intends to issue and allot to the Lender 400,000 non-transferrable warrants to purchase Class A common shares (the "Bonus Warrants") in the capital of Vivione at an exercise price of $0.35 per share for a two-year term. If the Class A common Shares of Vivione trade on the TSX Venture Exchange at a closing price above $0.42 for 20 consecutive days, the Bonus Warrants will be subject to accelerated expiry, such that the Bonus Warrants will expire 30 days after the public announcement of such trading event.

Kevin Kuykendall, Chairman and CEO of Vivione said "The Loan will be utilized to purchase additional Apogee units, which are the hardware platform for Vivione's RAPID-B technology. This large volume acquisition enables Vivione to achieve a higher volume discount, resulting in decreased costs and reduced delivery timeframes to the end user (16 weeks to almost immediate once a customer places an order). Normally Vivione would have three to four units in inventory at any one time, but Vivione will be utilizing its current Apogee inventory for the AOAC and FSIS certification programs which are underway for our E coli O157 and STEC assays." Mr. Kuykendall went on to say "We're pleased that Mr. Smith has shown further confidence in Vivione's business plan by providing Vivione with the $1,000,000 Loan. The additional funding permits Vivione to have the inventory required for immediate delivery of Apogee units on new orders while not having to utilize the working capital it raised in the $6MM prospectus offering."

Mr. Smith said "I'm pleased to provide Vivione with the $1,000,000 Loan as I believe it will be important for Vivione to provide the Apogee units quickly once a customer makes a decision. Although Vivione is in the early stages of its certification and commercialization program, Vivione has recently demonstrated achievement of some significant milestones, being the collaborative relationships with both the University of Arkansas and Kirkegaard & Perry Laboratories, Inc. I'm confident that if the food safety market realizes the potential benefits the RAPID-B technology can provide, Vivione will be better positioned to realize its business objectives."

On the basis that the Lender is a director of Vivione, the Loan and the proposed issuance of Bonus Warrants are "related party transactions" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

Vivione is not required to obtain a formal valuation under MI 61-101 with respect to the Loan because the Loan is a related party transaction described in paragraph (j) of the definition of "related party transaction" in MI 61-101. Section 5.4(1) of MI 61-101 provides that only related party transactions described in paragraphs (a) to (g) of the definition of related party transaction are subject to the formal valuation requirement. Vivione is also exempt from the minority approval requirement of MI 61-101 in respect of the Loan, as pursuant to Section 5.7(1)(f) of MI 61-101, the Loan was negotiated on reasonable commercial terms and does not feature an equity conversion privilege or allow for Vivione to repay the Loan in securities.

The Bonus Warrants will fall under the definition of a related party transaction described in paragraphs (a) to (g) of the definition of related party transaction. Vivione is exempt from the formal valuation requirement in respect of the Bonus Warrants pursuant to Section 5.5(a) of MI 61-101, on the basis that the fair market value of the Bonus Warrants (when issued) will not exceed 25% of the market capitalization of Vivione. Vivione is also exempt from the minority approval requirement of MI 61-101 in respect of the Bonus Warrants pursuant to Section 5.7(1)(a) of MI 61-101 because the fair market value of the Bonus Warrants (when issued) will not exceed 25% of the market capitalization of Vivione.

The Bonus Warrants will be subject to a four-month hold period from the date of issue.

About Vivione

Vivione's business is centered on the commercialization of the RAPID-B technology, which is an integrated system of hardware, software and chemical reagents that tests bacteria in key environments. This technology could have potentially diverse applicability from food safety to clinical diagnostics, by identifying and quantifying microorganism levels more rapidly and with greater precision than currently employed techniques.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws. Although Vivione believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based on factors and assumptions concerning future events that may prove to be inaccurate. These factors and assumptions are based upon currently available information to Vivione. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include the ability of Vivione to sell Apogee units to repay the Loan based on sales and working capital and general economic, market or business conditions. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release and, except as required by applicable law, Vivione does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. Vivione undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Vivione, or its financial or operating results or (as applicable), their securities.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Vivione Biosciences Inc.



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