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
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.
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.
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.