SEMBIOSYS CLOSES $4,000,000 FINANCING
TSX symbol: SBS
CALGARY, March 18 /CNW/ - SemBioSys Genetics Inc. ("SemBioSys" or the "Company") (TSX:SBS) a development stage
biotechnology company that utilizes its patented plant seed oilbody technology platform to develop biosimilar drug candidates and
high value proteins, today announced that it has closed its previously announced $4 million financing. Under the final terms of the
financing, SemBioSys has received $4 million of funding from Concept Capital Management Ltd. ("Concept Capital"), which is
beneficially owned by Mr. Bernd Högel, in the form of bonds with an aggregate principal amount face value of $4 million (the
"Bonds") and detachable warrants (the "Warrants") to purchase common shares of SemBioSys. The exercise price of the
Warrants is initially
.06 per share, subject to adjustment.
We believe that the financing will allow SemBioSys to regain compliance with the financial condition continued listing
requirements of the Toronto Stock Exchange (the "TSX").
SemBioSys will use the proceeds of the offering for general operating capital and to negotiate one or more partnership
transaction(s) for its biosimilar human insulin, next generation cardiovascular candidate, Apo AIMilano and/or additional products
enabled by its novel plant based technology platform to make biosimilar drugs.
The Bonds issued in the transaction bear interest at a rate of 7% per annum, compounded annually, have a maturity date of 10
years from the date of issuance and are secured by certain intellectual property assets of SemBioSys. The Bonds include a "call"
provision that provides that they can be called by the holder after three years or redeemed at 120% of their face value, plus
accrued interest, at any time by SemBioSys.
The Warrants entitle the holder to purchase, with either all or a combination of, cash, Bonds and/or accrued interest (at 7%
compounded annually), the equivalent of $4 million, plus accrued interest, worth of common shares of SemBioSys for a period of
10 years after the closing of the proposed financing at an initial exercise price of
.06 (the "Initial Exercise Price") per common
share. The Initial Exercise Price can be reduced on each six month anniversary of the date of issuance of the Bonds if the simple
average daily closing price of the common shares on the Toronto Stock Exchange for the previous six month period is less than
.06, subject to a floor price of
.05 (the "Floor Price") per common share. If the Initial Exercise Price is adjusted downward in
accordance with the previous sentence, it shall not thereafter be adjusted upwards, except in connection with proportional price
adjustments required in connection with, for example, a share consolidation. In the event the Company undertakes certain dilutive
common share issuances, the Floor Price may be adjusted downwards and the maximum number of common shares issuable
may be increased.
Assuming the holder exercised all Warrants as at today's date, the holder would acquire 66,666,667 common shares at an
exercise price of
.06, representing approximately 129.8% of the current issued and outstanding share capital of the Company
(in the event that all Warrants were exercised at
.06 at the end of the 10 year term and the interest paid in cash, the holder
would hold approximately 56.5% and existing shareholders would hold approximately 43.5% of the then issued and outstanding
share capital of the Company) and a maximum of 157,372,109 common shares at
.05 per common share or approximately
306.3% of the current issued and outstanding share capital of the Company (in the event that all Warrants and accrued interest
were exercised at
.05 at the end of the 10 year term, the holder would hold approximately 75.4% and existing shareholders
would hold approximately 24.6% of the then issued and outstanding share capital of the Company).
The terms of the transaction were unanimously approved by the directors of the Company who were free from any interest and
unrelated to the parties involved in the proposed transaction. The Company applied for and received, an exemption from the
Toronto Stock Exchange, in accordance with Section 604(e) of the TSX Company Manual, from the requirement to obtain
shareholder approval for the transaction in consideration of the serious financial circumstances of the Company, as previously
described in the Management's Discussion and Analysis for the period ended September 30, 2010. Closing of the financing by
the investor was conditional upon receipt of such exemption from the TSX. Shareholder approval for the proposed financing
would have otherwise been required by the TSX since the number of common shares to be issued on the exercise of the
Warrants exceeds the maximum 25% dilution permissible under TSX rules, the exercise price of the Warrants is subject to a
reset, the initial exercise price of the Warrants is lower than the market price and the transaction can materially affect the control
of the Company because of the large potential share ownership of the investor, Concept Capital. The Company's reliance on the
financial hardship exemption provisions under the TSX Company Manual is based on determinations by the board of directors of
the Company, acting in good faith, that the Company is in serious financial difficulty, that the transaction is designed to improve
its financial position and that the terms of the transaction are reasonable under such circumstances.
About SemBioSys
Calgary, Alberta-based SemBioSys is a development stage biotechnology Company that utilizes its patented plant seed oilbody
expression technology platform to develop biosimilar drug candidates and high value proteins. SemBioSys' seed-based protein
expression system can enable exceptionally low cost of production with unprecedented scalability and reliability. SemBioSys is
focusing the platform selectivity to develop biosimilar product candidates with tremendous commercial value. The Company's
current pharmaceutical development programs include insulin (SBS-1000, regulated as a biosimilar in Europe) and Apo AIMilano,
a new chemical entity and next-generation cardiovascular therapy with blockbuster revenue potential if it reaches market for
treatment of atherosclerosis. SemBioSys' Apo AIMilano is a des-1,2- variant of Apo AIMilano as previously described in scientific
literature. SemBioSys is listed on the Toronto Stock Exchange under the ticker SBS. More information is available at
www.sembiosys.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words
"believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which
constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the
Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but
not limited to, the current financial position of the Company, the Company's ability to continue as a going concern and its ability to
raise the funds necessary to continue its operations, the status of the TSX's de-listing review, the continued listing of the common