Laval, Quebec, October 25, 2012 - Warnex Inc. (TSXV: WNX) ("Warnex" or the "Corporation") is pleased to announce that it has entered into a binding agreement (the "Agreement") for the sale to Biotrial Research S.A.S. ("Biotrial"), an arm's length privately-owned contract research organization headquartered in Rennes, France, of its Bioanalytical Services division (the "Business"). Closing of the sale of the Business (the "Transaction") is expected to occur on or about December 10, 2012 and is subject to a number of conditions, including the approval of the Transaction by the TSX Venture Exchange (the "TSXV") and by the shareholders of Warnex.
"The sale of the Bioanalytical Services division represents the final step in our process to resolve the challenges related to the balance sheet and eliminate all Company debt for the benefit of all stakeholders," said Michael Singer, Chairman of the Board of Directors of Warnex. "We want to thank the employees of the Bioanalytical Services division for their valuable contributions over the years and are confident that the customers of this business will continue to enjoy the same high quality and professional service that they are accustomed to receiving."
Key Terms of the Transaction
As consideration for the sale of the Business to Biotrial, Warnex will receive a base price of C$6,000,000, subject to working capital adjustments and certain other revenue and net book value-based adjustments. In addition, Warnex will be eligible to receive an additional payment equal to the amount, if any, by which the adjusted revenues of the Business during the calendar year ending December 31, 2012 exceed C$6,000,000.
The Board of Directors of Warnex may terminate the Agreement upon the payment of a break fee of C$200,000 in the event that a third party makes a superior offer for the Business prior to the closing of the Transaction and Biotrial does not exercise its right under the Agreement to match such offer.
Bloom Burton & Co., a healthcare-specialized investment banking group, has provided an opinion to the Board of Directors of Warnex that, subject to the assumptions and limitations set out therein, the Transaction is fair from a financial point of view to the shareholders of Warnex.
As required by the Canada Business Corporations Act and the policies of the TSXV, Warnex must seek approval of the Transaction by way of a special resolution adopted by not less than 66 2/3% of the votes cast at a meeting of holders of Warnex common shares (the "Meeting"). The Corporation currently anticipates that the Meeting will take place on or about December 10, 2012. The management information circular of Warnex to be delivered to shareholders in respect of the Meeting will include detailed information on the Transaction, as well as the unanimous recommendation of the Board of Directors of the Corporation that the shareholders vote to approve the Transaction.
Following the closing of the Transaction, the Corporation will cease to have any material active business operations, but will maintain its corporate head office. The Board of Directors will then consider the appropriate course of action to be taken with respect to the remaining assets of the Corporation, which are expected to consist principally of the net cash proceeds remaining after the Transaction, estimated to be between C$1,000,000 and C$2,000,000. The potential options to be considered by the Board of Directors will range from identifying new commercial opportunities towards which to deploy the Corporation's resources to liquidating the Corporation and distributing any remaining assets to the shareholders.
Additionally, as Warnex will no longer have any material active business operations, the listing of Warnex's common shares is expected to be transferred from the TSXV to the NEX, being the separate board of the TSXV for issuers who fall below the ongoing listing requirements of the TSXV. Trading of shares on the NEX takes place on the same fully electronic system as the TSXV, and is governed by identical trading rules.
Founded in 1989 by Jean-Marc Gandon, PharmD (President & CEO), Biotrial (www.biotrial.com) is an independent and privately-owned contract research organization. With a large range of services including Phase I studies, Clinical Trial Management Phase II-IV, Non-Clinical Pharmacology (discovery and safety pharmacology), Oncology, Data Management, Biostatistics, ECG & Imaging Core Labs (QT/QTc Trials, Psychometric Testing, Imaging, EEG/PSG Assessment), Medical Writing, QA & advice in Regulatory Affairs, Biotrial can manage every step of the drug development process. With 150 beds and a staff of 250 throughout several subsidiaries in France, the United Kingdom and the U.S.A., Biotrial runs over 80 studies per year, either in its own clinics in Paris, Rennes, France and soon in Newark, New Jersey or in cooperation with hospital specialists and general practitioners (in Europe and in the U.S.A.).
Warnex (www.warnex.ca) is a life sciences company which, operating out of facilities located in Laval, Quebec, and currently specializes in bioequivalence and bioavailability studies for clinical trials.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown, including the risk that the sale of the Bioanalytical Services division might not occur on the terms and conditions described in this news release, or at all, and that the listing of the common shares of Warnex may not be accepted for listing on the NEX following the closing of the Transaction. For further information identifying known risks and uncertainties, relating to financial resources, liquidity risk, key customers and business partners, credit risk, foreign currency risk, government regulations, laboratory facilities, volatility of share price, employees, suppliers, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.