CALGARY, Aug. 28, 2017 /PRNewswire/ - Resverlogix Corp.
("Resverlogix" or the "Company") (TSX:RVX) announced today the
following update on its corporate activities.
Extension of Maturity Date of Loan
The Company announced that the maturity date of the Company's
CAD$68.8 million Loan (the "Loan")
will be extended from August 28, 2017
to December 26, 2017. In addition,
interest on the Loan shall continue to accrue, but shall not be
payable until the new maturity date. The Loan is secured by an
irrevocable CAD$68.8 million Standby
Letter of Credit (the "Letter of Credit") in favour of the lender
arranged by Eastern Capital Limited ("Eastern") which will be
maintained until maturity of the Loan. In conjunction with the Loan
extension, the Loan will be assigned from Citibank, N.A. to a
lender affiliated, directly or indirectly, with Eastern (the
"Lender").
The Company previously agreed to indemnify Eastern for any
amounts drawn under the Letter of Credit, pledged its issued
patents and certain tax loss pools to Eastern as security for its
obligations under the indemnity and agreed to pay a fee in the
amount of 0.03 percent per annum on the undrawn amount of the
Letter of Credit. In connection with the extension of the Loan, the
Company will grant to the Lender a security interest in all of its
assets as security for the Loan and the Company will increase the
fee payable to Eastern on the undrawn amount of the Letter of
Credit from 0.03 percent to 12 percent per annum.
The Loan extension is subject to execution of definitive
agreements and satisfaction of customary closing conditions which
is expected to occur on or before August 31,
2017.
Mr. Donald McCaffrey, President
and CEO stated, "We are pleased that the loan has been extended for
four months as we expect, within that period of time, to close the
contemplated transaction we also announced today and close or
significantly advance other similar initiatives that we have been
diligently pursuing. Closing of any of these transactions would be
anticipated to provide funding more than sufficient to retire the
loan in full. Our goal remains to create long-term value for our
shareholders."
The agreement to indemnify and grant security interests to
Eastern or its affiliates in connection with the Loan extension is
a "related party transaction" within the meaning of Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101") as Eastern is an insider of
the Company. The Company is relying on the "financial hardship"
exemption from the minority approval requirement under MI 61-101
based on the board of directors having unanimously determined that
the Company is in serious financial difficulty, the Loan extension
is designed to improve the financial position of the Company and
the terms of the Loan extension are reasonable in the circumstances
of the Company. The Company anticipates filing a material change
report less than 21 days prior to the closing of the Loan extension
as closing must occur expeditiously in order to comply with the
terms of the Loan.
Strategic Transaction
The Company also announces that it has received a letter of
intent regarding a significant potential regional licensing
arrangement (the "License") for apabetalone (RVX-208), and/or a
significant equity investment in the Company. The License is
expected to include an upfront payment and on-going milestone and
royalty payments. Management will continue to diligently pursue
this opportunity. Additional licensing opportunities are also in
discussion.
About Resverlogix
Resverlogix is developing apabetalone (RVX-208), a
first-in-class, small molecule that is a selective BET (bromodomain
and extra-terminal) inhibitor. BET bromodomain inhibition is an
epigenetic mechanism that can regulate disease-causing genes.
Apabetalone is the first and only BET inhibitor selective for the
second bromodomain (BD2) within the BET protein called BRD4. This
selective inhibition of apabetalone on BD2 produces a specific set
of biological effects with potentially important benefits for
patients with high-risk cardiovascular disease (CVD), diabetes
mellitus (DM), chronic kidney disease, end-stage renal disease
treated with hemodialysis, neurodegenerative disease, Fabry
disease, peripheral artery disease and other orphan diseases, while
maintaining a well described safety profile. Apabetalone is the
only selective BET bromodomain inhibitor in human clinical trials.
Apabetalone is currently being studied in a Phase 3 trial,
BETonMACE, in high-risk CVD patients with type 2 DM and low
high-density lipoprotein (HDL), and is expected to be initiated in
a Phase 2a kidney dialysis trial designed to evaluate biomarker
changes and safety parameters in up to 30 patients with end-stage
renal disease treated with hemodialysis.
Resverlogix common shares trade on the Toronto Stock Exchange
(TSX:RVX).
Follow us on Twitter: @Resverlogix_RVX
(https://twitter.com/resverlogix_rvx), or on our blog at
http://www.resverlogix.com/blog
For further information please contact:
Investor Relations
Email: ir@resverlogix.com
Phone: 403-254-9252
Or visit our website: www.resverlogix.com
This news release may contain certain forward-looking
information as defined under applicable Canadian securities
legislation, that are not based on historical fact, including
without limitation statements containing the words "believes",
"anticipates", "plans", "intends", "will", "should", "expects",
"continue", "estimate", "forecasts" and other similar expressions.
In particular, this news release includes forward looking
information relating to an extension of the maturity date of the
Company's loan, the expectation that the Company will close
a strategic transaction involving a licensing arrangement prior to
the amended maturity date of the Loan, and the potential
role of apabetalone in the treatment of CVD, DM, chronic kidney
disease, end-stage renal disease treated with hemodialysis,
neurodegenerative disease, Fabry disease, peripheral artery disease
and other orphan diseases. Our actual results, events or
developments could be materially different from those expressed or
implied by these forward-looking statements. We can give no
assurance that any of the events or expectations will occur or be
realized. In particular, there is no assurance that the Company
will complete a strategic transaction or that the proceeds from any
such transaction will be sufficient to enable the Company to repay
the Loan by the amended maturity date. By their nature,
forward-looking statements are subject to numerous assumptions and
risk factors including those discussed in our Annual Information
Form and most recent MD&A which are incorporated herein by
reference and are available through SEDAR at www.sedar.com. The
forward-looking statements contained in this news release are
expressly qualified by this cautionary statement and are made as of
the date hereof. The Company disclaims any intention and has no
obligation or responsibility, except as required by law, to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
SOURCE Resverlogix Corp.