SAN FRANCISCO--(BUSINESS WIRE)-- Biomagnetics Diagnostics Corp., (PINK SHEETS:BMGP - News) a developer of revolutionary diagnostic systems and technology for HIV, hepatitis, tuberculosis and malaria detection, and other innovative technologies, today announced it has signed a letter of intent to acquire a publicly traded company for the purpose of spinning off its Low Carbon and technology operation, Hubei Tianyuan Chemical Co., Ltd. (“Hubei”), into the acquired company. The company targeted for acquisition is current on all Securities and Exchange Commission filings and is classified as an operating company and not a shell company.
As part of the transaction, Biomagnetics will receive common shares in the new company, while Biomagnetics is also expected to receive a significant amount of funding at the closing of the transaction. The funds will be used to complete the development stage of the Company’s Integrated Optical Biosensor (IOBS) diagnostic system. Biomagnetics has recently completed a collaboration with Los Alamos National Laboratory to develop the world’s first integrated optical biosensor in a portable, handheld technology format designed to substantially lower unit costs and raise the detection levels of some of the world’s most prevalent diseases. Funding from the spinoff transaction is expected to be sufficient to bring the IOBS into the commercialization stage.
Clayton Hardman, CEO of Biomagnetics Diagnostics Corp. stated, “We are very pleased with the operation we have agreed to acquire to facilitate the Hubei spinoff. The targeted company will come to us with a pristine balance sheet and a very attractive capital structure. While the final details are still being worked out, we expect the corporate Biomagnetics entity will retain an approximate 5% ownership stake in the Hubei operation. Considering the significant amount of revenues the Hubei operation is expected to produce, we believe this ownership stake holds a value that significantly exceeds the current total market capitalization of Biomagnetics Diagnostics. Because of this, we believe this transaction is strongly in the interest of our shareholders.”
Mr. Hardman continued, “Current BMGP shareholders will not only benefit from this ownership position in Hubei, but also from the significant amount of cash we expect to receive upon the transaction closing that will be used to bring the integrated optical biosensor to commercialization.”
About Biomagnetics Diagnostics Corp.
Biomagnetics Diagnostics Corporation is an advanced medical device and biotechnology company. The Company has developed a waveguide-based advanced integrated optical biosensor through its cooperative research and development agreement with Los Alamos National Security, LLC, which will initially be used for cholera and tuberculosis diagnosis. More information on Biomagnetics Diagnostics Corp. can be seen at www.biomagneticsbmgp.com.
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