ACQUISITION OPTION EXTENDED FOR USD 1 MILLION
(NGM:SCN)
Scandinavian Clinical Nutrition AB (SCN) has entered into a standstill agreement with PhytoLab Solutions, Inc., part of the Lifequest group, which extends their option to acquire the SCN subsidiary with the exclusive rights to the immune product Immulina until March 31, 2009, against an upfront consideration of USD 1 million.
SCN has previously granted the American company PhytoLab Solutions, Inc., which is part of the Lifequest group, a world-wide exclusive license for sales of Immulina through a partnership agreement. To maintain exclusivity, PhytoLab Solutions has paid a total of USD 2.5 million in cash in license fees to SCN, of which the last installment was paid in December, 2007.
The standstill agreement extends the option and share purchase agreement, which gives PhytoLab Solutions the right to acquire Nordic Immotech ApS, the SCN subsidiary with the exclusive rights to Immulina, for USD 13 million. The option was to be exercised before December, 2008, but due to the current turbulence on the financial markets, PhytoLab Solutions has offered the owners of the SCN subsidiary USD 1 million to extend the option until March 31, 2009. At the same time, the standstill agreement extends the sublicense agreement under which the SCN group markets Immulina in the EU and certain other markets until the same date.
“SCN and Lifequest have a relationship with mutually beneficial interests in which promising initiatives have been started together, and therefore we accept their offer as a sign of Lifequest’s strong commitment to take the next step. I look forward to our negotiations during the standstill period”, says Danilo Copiz, VP of Sales at SCN.
The consideration of USD 1 million will be transferred to SCN in Lifequest shares, valued at USD 0.24 per share. The payment is non-refundable should the parties not agree on terms for the acquisition of Nordic Immotech, but if an agreement is reached, it will be applied towards the acquisition. The parties have agreed in principle that the final acquisition will include a cash component. During the four-month standstill period, Lifequest has a first right of refusal to buy back shares transferred to SCN for cash at the following prices:
• On or before February 27, 2009: USD 0.48 per share
• On or before March 31, 2009: USD 0.60 per share
“As most other companies, Lifequest is also affected by the current situation on the financial markets in the world. I am glad that we have reached this standstill agreement with SCN, so that we have the necessary time to follow-through on the final acquisition agreement”, says Anthony Jurak, Chairman of Lifequest.
“We have a very good business relationship with Lifequest, and this agreement shows that both parties are interested in continuing and deepening this relationship. However, should they ultimately choose not to exercise this option, SCN will regain the world-wide exclusive rights to Immulina – an exciting opportunity of a very interesting product with great potential”, says Thomas Christensen, CEO for SCN.
SCN has sub-licensed the rights to Immulina from PhytoLab Solutions to commercialize Immulina on selected markets in Europe, Russia, CIS, Turkey, South Africa and Brazil. The product is currently sold on 8 markets world-wide, including USA.
For more information, please contact:
Thomas Christensen, CEO, tc@scnutrition.com, +47 922 55 444
Danilo Copiz, VP Sales, dc@scnutrition.com, +45 2090 8885
Scandinavian Clinical Nutrition AB (publ) works in R&D and distribution of clinically tested, scientifically documented products within the field of nutrition (nutraceuticals). Established in 2006, SCN maintains a product portfolio with established trademarks, such as CUUR, Coldizin, Immulina, Membra7 and Ledactin. Core competence and strategic alliances, within both R&D and sales, in combination with innovative and clinically proven products, create good conditions for profitable growth both in Sweden and internationally. The shares of SCN are traded under the ticker “SCN” on Oslo Axess (www.osloaxess.no) and NGM Equity (www.ngm.se).For more information, please visit www.scnutrition.com.