BioPorto’s short-term financing is secured by the conclusion of an agreement on a loan of DKK 8 million. The loan is due for payment on September 16, 2013 and the Company's continued operations after this date are still planned to be secured by a rights issue, which is planned in the third quarter of 2013.
Strategy
As previously announced, BioPorto’s newly elected board has initiated an evaluation of the Company’s business and operations to ensure that strategies, action plans, IP protection (IP) and other activities are coordinated and optimized. The aim is to strengthen the Company's position, financial performance and value creation. As part of this evaluation, assessments by external experts are obtained.
The core of BioPorto’s strategy is the implementation of NGAL as a marker for acute kidney injury and sale of The NGAL Test™ for the routine diagnostics market. Many factors affect the development of the NGAL-market, including the laboratories’ possibility of obtaining reimbursement for the NGAL Test™, results of health economic analyzes, clinical validation, development of guidelines for the use of the test, marketing efforts, competition, IP, and treatment options. It is therefore subject to considerable uncertainty to estimate the market development and penetration of The NGAL Test™ and the Company's other NGAL products.
As market development and implementation of NGAL is still associated with significant risks, the company will seek to strengthen sales of the entire product portfolio to ensure the company's earnings. At the same time, all options to improve the efficiency of the company will be explored. These actions do not give rise to a change of the company's financial outlook for 2013, which is stated in the annual report for 2012, including the related requirements for new funding to ensure continued operation.
Ensuring short-term debt financing
In order to cover the Company’s short-term funding, as stated in the interim report for the first quarter published on May 7, 2013, three investors, who are also shareholders in the Company, have signed an agreement of a loan to BioPorto A/S DKK of 8 million. The loan is due for payment on September 16, 2013.
The loan, which is used for the ongoing operation of BioPorto A/S and the subsidiary BioPorto Diagnostics A/S, bears interest at 1% per month and may at any time be redeemed by the Company. As security for the loan, BioPorto A/S and BioPorto Diagnostics A/S have provided a series of securities to the lenders, including security in the following assets: BioPorto A/S’ shareholding in BioPorto Diagnostics A/S, BioPorto A/S’ group receivables from BioPorto Diagnostics A/S, BioPorto Diagnostics A/S’ shareholding in BioPorto A/S, deposits and prepayment for the lease of the location Grusbakken 6-8, 2820 Gentofte and security in certain patents and trademarks. Finally, BioPorto Diagnostics A/S provide company security, which include claims from sales, stock, operating equipment, and IP.
The cost of registration is DKK 260.600 and there are also costs associated with counseling.
In connection with the loan, the lenders have given notice to convert the principal amount of DKK 8 million into BioPorto shares at a forthcoming rights issue in the second half of 2013, provided that revenues of at least DKK 40 million is achieved (including the converted amount of DKK 8 million.).
The short-term debt financing is assessed to finance BioPortos operations until the completion of the rights issue, which is planned for the third quarter of 2013. The assessment is based on the Company's recent budgets as well as an assumption of unchanged costs to the usual operation and an earnings trend in the loan term, which is consistent with the Company's previously disclosed guidance for the full year.
Rights issue
Ensuring the continued operation after September 16, 2013, remains subject to the Company being replenished with additional capital, which is scheduled to take place through the above mentioned rights issue. As previously announced, the Company has started the preparation of the rights issue, including the writing of a prospectus. BioPorto will publish the procedure for the rights issue as soon as it has been finally decided by the Board.
This announcement contains statements regarding expectations for future development. Such statements are uncertain and involve risks, as many factors, some of which will be outside BioPortos control, may cause actual developments to differ materially from the expectations contained in the message.
For further information please contact:
Thea Olesen, CEO
Christina Thomsen, Investor Relations
Tel. +45 45 29 00 00, mail investor@bioporto.com
