TIDMSPSY TIDMSPSC
RNS Number : 5164I
Spectra Systems Corporation
14 December 2020
Spectra Systems Corporation
("Spectra" or the "Company")
Acquisition of interest in Solaris BioSciences, Inc.
("Solaris")
Spectra Systems Corporation, a leader in machine-readable
high-speed banknote authentication and brand protection
technologies, is delighted to announce that it has increased its
equity interest in Solaris (the principal shareholder of which is
Dr. Lawandy, CEO of Spectra) from 4.79 per cent to 48.65 per cent
(on an as-converted basis), for an aggregate consideration of
c.USD700,000 (c.GBP522,000 ) (the "Acquisition"). This transaction
is expected to be the first of several over time which are expected
to be a vehicle for building additional value for investors in
business areas outside the authentication business which have
rapidly evolving valuations. Spectra seeks to find early stage
technology companies in the healthcare, biotechnology and energy
sectors which draw on its core technology capabilities and where it
can minimize the use of cash consideration.
Solaris, which is targeting the medical and biotech markets, has
developed and patented a new, high sensitivity, rapid and compact,
optically based technology for the characterisation of bio-fluids
and as an assay for the detection of proteins, RNA/DNA, antibodies,
and other biomolecular moieties using extremely low sample volumes.
The technology has been demonstrated and uses nano-particle
consumables (particles with sizes less than a micron) and an all
solid-state laser source to interrogate the ultra-small samples
volumes. When used with precision nano-particles, the method is
capable of determining the viscosity of pin-prick volumes obtained
using modified test strip methods of biological fluids such as
blood plasma, which have been directly correlated with Covid-19
(SARS-2) associated hyper-viscosity, cardio-metabolic risk factors,
proteinuria, and homeostasis in cardiac surgery patients in the
early postoperative period. The technology can also be utilized
with surface functionalized nano-particles with biological samples
containing target molecules specific to a virus or pathogen to act
as an ultrasensitive assay. This application is adaptable and can
be readily used for new, yet undiscovered pathogens.
The technology is protected by two issued United States Patent
and Trademark Office (USPTO) patents and associated foreign
fillings (USPTO 9,970,854 and 10,379,114, "Nondegenerate two-wave
mixing for identifying and separating macromolecules"). These
patents will be in force for another 16 and 18 years respectively.
Solaris also holds three additional patents, two of which are
relevant to the area of commercial focus.
An Executive Summary of the Solaris technology, its
applications, and the composition of the board of directors of
Solaris is available on the Spectra website at:
https://www.spsy.com/investments-in-early-stage-companies . During
the prototype development phase financed by this transaction, Dr.
Lawandy will serve as the Chief Executive Officer of Solaris
without compensation from Spectra or Solaris.
The aggregate consideration, in respect of the Acquisition, of
USD700, 000 (c.GBP522,000) was satisfied:
-- As to USD305,942.26 (c.GBP228,000), through the subscription
by Spectra of new Solaris shares of Convertible Preferred Stock,
the consideration being the issue to Solaris of 126,252 shares of
new Spectra common stock ("Consideration Shares") , which will be
used by Solaris in settlement of all of its outstanding debt,
amounting to USD305,942.26 (c.GBP228,000), provided by five note
holders, including three venture capital funds; and
-- As to USD394,057.74 (c.GBP294,000), through the further
subscription by Spectra of new Solaris shares of Convertible
Preferred Stock, to be settled as to USD294,057.74 (c.GBP219,000)
in cash and as to the balance through the provision by Spectra to
Solaris of USD100,000 (c.GBP75,000) of research and administration
services, to be provided at cost over the ensuing 24 months.
As a result of the Acquisition, the interest (on an as-converted
basis) in Solaris of Dr Lawandy has declined from 84.54 per cent to
46.01 per cent. and that of Spectra has increased to 48.65 per
cent.
Whilst the transaction is with a related party, the values
associated with Solaris relative to Spectra are such that the
requirements of AIM Rule 13 are not triggered. The parties assigned
a USD 850,000 pre-money valuation of Solaris, which is supported by
an independent third party valuation of the two key patents which
underpin the technology being commercialized. These patents were
independently valued at $535,000.
In accordance with Delaware law, the transaction was (a)
unanimously approved by all three of Spectra's non-executive
Directors and (b) specially approved by a majority-in-interest of
the disinterested stockholders of Solaris. In addition, going
forward Spectra's shares in Solaris will be voted as directed by
Spectra's non-executive Directors.
In the year ended 31 December 2019, Solaris incurred a loss
after taxation of c.USD 10,000 (c.GBP7,000 ) on nil revenue. Its
net liabilities at that date amounted to c.USD450,000 (c.GBP336,000
), including the aforementioned loans which at that date amounted
to USD305,942.26 (c.GBP294,000 ).
Application has been made for the Consideration Shares to be
admitted to trading on AIM of the London Stock Exchange
("Admission"). Admission is expected to occur at 8am on or around
15(th) December 2020. Following the issue of the Consideration
Shares, the issued share capital of Spectra comprises:
820,485 shares in the Regulation S stock line ISIN number
USU8457D1091 (AIM:SPSC); and
44,734,239 shares in the unrestricted line ISIN number
US84756T1060 (AIM:SPSY).
Spectra Systems has no Shares in treasury, therefore upon
Admission, 45,554,724 may be used by shareholders as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.
Commenting on the Acquisition, The Honourable BJ Penn, Chairman
of Spectra, stated:
"Solaris intends to deploy, in new markets, technologies related
at a core level to those utilized by Spectra in its current
markets. This is therefore an exciting acquisition by Spectra which
is intended to introduce it into biotech and healthcare
markets.
The Directors of Spectra are confident that the transaction
described herein will enable Solaris to launch its first prototype
device within 24 months."
Enquiries:
Spectra Systems Corporation
The Honourable BJ Penn, Chairman Tel: +1 (0) 401 274 4700
WH Ireland Limited
Chris Fielding, Managing Director, Corporate Finance Tel: +44
(0) 20 7220 1650
Further information on Solaris can be found on the Spectra
website at https://www.spsy.com
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
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END
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