Conference call begins at 11:00 a.m. Eastern time on August 15
- Definitive Merger Agreement signed, calling for issuance of Skyline common and preferred stock
- Skyline Medical expands revenue stream into growth markets with CytoBioscience for their ion channel screening and
protein solubility analytics, in vitro contract research services and support products; gains new opportunities for
STREAMWAY® System sales
- CytoBioscience has an order backlog of $6 million
- CytoBioscience CEO Dr. James Garvin to become president of Skyline Medical; Dr. Garvin and one other CytoBioscience
designee to be named Skyline Medical directors
- Transaction expected to close by September 30, 2017
MINNEAPOLIS, Aug. 09, 2017 (GLOBE NEWSWIRE) -- Skyline Medical Inc. (NASDAQ:SKLN) (“Skyline” or “the Company”), producer of the FDA-approved
STREAMWAY® System for automated, direct-to-drain medical fluid disposal, announces the signing
of a definitive agreement to merge with CytoBioscience, a privately held biomedical company. Under the terms of the agreement, Skyline
will pay the owners of CytoBioscience at closing 19.8% of the outstanding common shares, which based on today’s outstanding shares
would be 1,234,086 shares with a current value of approximately $1.9 million, plus shares of Class C, D and E non-convertible,
non-voting preferred stock with a total liquidation preference of $22.7 million. The acquisition has been approved by the
boards of directors of both companies and is expected to close by September 30, 2017, subject to customary conditions.
Based in San Antonio, Texas, CytoBioscience creates and manufactures instruments used in human cell research for drug development. It has a world-renowned scientific and technical
staff, collaborative partnerships with leading pharmaceutical companies and strategic alliances with key groups and academic institutions.
Its ion channel instrument was selected by the U.S. Food and Drug Administration (FDA) for its own
cardiac safety testing on preclinical new drug compounds. CytoBioscience’s current order backlog is $6 million primarily in
contract research work.
“This merger is transformative to Skyline Medical as it fulfills our goal of broadening our company’s business and
brings immediate and meaningful revenue. It also brings a host of important medical center customers and relationships,
including a Who’s Who in pharmaceutical product development, that we can leverage to increase awareness of the STREAMWAY System and
generate sales,” said Dr. Carl Schwartz, chief executive officer of Skyline Medical. “Skyline Medical and CytoBioscience’s
shared commitment to providing products and services that ensure the best possible patient outcomes will drive our operations and
our strategic planning.”
Dr. Schwartz added, “With an exceptional intellectual property estate, CytoBioscience provides cell lines for ion
channel safety testing to large pharmaceutical and biotechnology companies, a business that is expected to expand with FDA’s new
requirement that all drugs be tested for cardiac safety. In particular, CytoBioscience’s contract research business has been
growing rapidly and will allow Skyline investors to participate in this exciting sector. More than $50 million has been
invested in CytoBioscience to date, much of it in the early days through grants by the government of Germany. We are delighted to
bring these capabilities and relationships to Skyline and are very excited about the potential for our expanded operations.”
CytoBioscience designs and manufactures instruments for ion channel screening and protein solubility analytics, and
has 11 U.S. and international patents on these technologies. It also provides in vitro contract research services
and the cell lines, buffers, solutions and microchips used in the instruments it manufactures and in other instruments. In
addition, it offers the only low-cost disposable shipping unit that can transport live cell, MEA plates or tissue samples within
one-tenth a degree of 37°C for up to 100 hours.
Dr. James Garvin, chief executive officer of CytoBioscience, said, “This business combination is a positive for all
parties as we leverage the strengths of each company to achieve greater success than either of us could alone. CytoBioscience
is the leading provider of ion channel screening services in support of the CiPA initiative, which is intended by the FDA to move
safety pharmacology from a predominantly pharmacodynamics approach to in silico and in vitro toxicity assessment.
We are looking forward to converting our existing backlog to revenues and to accelerating the growth of our business. In addition,
the STREAMWAY System represents a compelling solution to the problem of medical fluid waste disposal, and we are pleased to tap our
network of contacts to raise awareness and drive sales.”
Upon the closing of the acquisition, Dr. Garvin will be named President of Skyline Medical and will be appointed to
the Skyline Medical board of directors. Dr. Schwartz will remain chief executive officer and a director of Skyline.
CytoBioscience’s 24 employees will continue to work in San Antonio and Skyline Medical’s headquarters will continue to be in
Minneapolis.
Dr. Garvin has served as CEO of CytoBioscience since its relocation to the U.S. in 2015. He has deep
experience in financing development stage healthcare companies. From 2013 to 2015 he was a managing director in investment
banking for Divine Capital Markets. From 2007 through 2013 he served as chief operating officer for the Leedom Group. From
2000 to 2013 he was CEO of Obed Corporation, a company that worked on mergers and acquisitions in biotechnology as well as did
micro finance projects in Africa and India.
Dr. Garvin holds a PhD in Urban Studies and Economic Systems and a Master’s of Administration from the University
of New Orleans, and a BA in English Literature from the State University of New York at Albany.
Financial and Legal Advisors
Dawson James Securities Inc. served as financial advisor and Maslon LLP served as legal advisor to Skyline Medical.
Maynard Cooper Gale served as legal advisor to CytoBioscience.
Conference Call and Webcast
Skyline management will host a conference call with accompanying slides beginning at 11:00 a.m. Eastern time on
August 15 to discuss this announcement as well as its second quarter 2017 financial results. To access the conference call,
U.S.-based listeners should dial (844) 666-7589 and international listeners should dial (443) 961-0433. All listeners should
provide passcode 68661783. Individuals interested in listening to the live conference call via the Internet may do so by
logging on to the Company’s website at www.skylinemedical.com.
The slides that accompany the conference call prepared remarks will be posted to the Investors section of www.skylinemedical.com prior to the start of the call.
Following the conclusion of the conference call, a telephone replay will be available through August 21, 2017 and
can be accessed by dialing (855) 859-2056 from within the U.S. or (404) 537-3406 from outside the U.S. All listeners should
provide passcode 68661783. The webcast will be available for a time on the Company’s website.
About Skyline Medical
Skyline Medical produces a fully automated, patented, FDA-cleared waste fluid disposal system that virtually
eliminates staff exposure to blood, irrigation fluid and other potentially infectious fluids found in the healthcare environment.
Antiquated manual fluid handling methods that require hand carrying and emptying filled fluid canisters present an exposure risk
and potential liability. Skyline Medical's STREAMWAY System fully automates the collection, measurement and disposal of waste
fluids and is designed to: 1) reduce overhead costs to hospitals and surgical centers; 2) improve compliance with OSHA and other
regulatory agency safety guidelines; 3) improve efficiency in the operating room, and radiology and endoscopy departments, thereby
leading to greater profitability; and 4) provide greater environmental stewardship by helping to eliminate the approximately 50
million potentially disease-infected canisters that go into landfills each year in the U.S. For additional information,
please visit www.skylinemedical.com.
About CytoBioscience
CytoBioscience creates and manufactures devices that represent a convergence of bioscience, nanoscience, microchip
development, algorithms and engineering. The company’s devices allow researchers, medical institutions and pharmaceutical
companies to better understand how human cells react to medicine. CytoBioscience has a world-renown scientific and technical
staff, collaborative partnerships with leading pharmaceutical companies and strategic alliances with key groups and academic
institutions, and its technology is used exclusively by the FDA. The company was founded in Germany and moved its
headquarters and manufacturing to San Antonio, Texas in 2015. For additional information, please visit www.cytobioscience.com.
About the STREAMWAY System
Skyline's revolutionary, FDA-cleared STREAMWAY System is the first true direct-to-drain fluid disposal system
designed specifically for medical applications, such as radiology, endoscopy, urology and cystoscopy procedures. It connects
directly to a facility's plumbing system to automate the collection, measurement and disposal of waste fluids. As of March
31, 2017, Skyline Medical customers have installed 103 STREAMWAY Systems in 52 facilities across 20 states, and in Canada.
The STREAMWAY minimizes human intervention for better safety and improves compliance with Occupational Safety and
Health Administration (OSHA) and other regulatory agency safety guidelines. It also provides unlimited capacity for increased
efficiency in the operating room, which leads to greater profitability. Furthermore, the STREAMWAY eliminates canisters to reduce
overhead costs and provides greater environmental stewardship by helping to eliminate the approximately 50 million potentially
disease-infected canisters that go into landfills annually in the U.S. For a demonstration please visit www.skylinemedical.com or call 855-785-8855.
Forward-looking Statements
Certain of the matters discussed in this announcement contain forward-looking statements that involve material
risks to and uncertainties in the Company's business that may cause actual results to differ materially from those anticipated by
the statements made herein. Such risks and uncertainties include , risks related to the proposed merger, including the fact that we
may not complete the merger; we do not have complete information about CytoBioscience, including audited financial statements; the
combined company will not be able to continue operating without additional financing; possible failure to realize anticipated
benefits of the merger; costs associated with the merger may be higher than expected; the merger may result in disruption of the
Company’s and CytoBioscience’s existing businesses, distraction of management and diversion of resources; delay in completion of
the merger may significantly reduce the expected benefits; and the market price of the Company’s common stock may decline as a
result of the merger. Other risks and uncertainties relating to the Company include, among other things, current negative operating
cash flows and a need for additional funding to finance our operating plan; the terms of any further financing, which may be highly
dilutive and may include onerous terms; unexpected costs and operating deficits, and lower than expected sales and revenues;
uncertain willingness and ability of customers to adopt new technologies and other factors that may affect further market
acceptance, if our product is not accepted by our potential customers, it is unlikely that we will ever become profitable; adverse
economic conditions; adverse results of any legal proceedings; the volatility of our operating results and financial condition;
inability to attract or retain qualified senior management personnel, including sales and marketing personnel; our ability to
establish and maintain the proprietary nature of our technology through the patent process, as well as our ability to possibly
license from others patents and patent applications necessary to develop products; the Company's ability to implement its long
range business plan for various applications of its technology; the Company's ability to enter into agreements with any necessary
marketing and/or distribution partners; the impact of competition, the obtaining and maintenance of any necessary regulatory
clearances applicable to applications of the Company's technology; and management of growth and other risks and uncertainties that
may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, which are available
for review at www.sec.gov. This is not a solicitation to buy or sell securities and does not purport to
be an analysis of the Company's financial position. See the Company's most recent Annual Report on Form 10-K, and subsequent
reports and other filings at www.sec.gov.
Contacts: Skyline Medical Carl Schwartz, Chief Executive Officer (651) 389-4800 cschwartz@skylinemedical.com Investors LHA Investor Relations Kim Sutton Golodetz (212) 838-3777 kgolodetz@lhai.com