TORONTO, Nov. 17 /CNW/ - ARIUS Research Inc. ("ARIUS" or the "Company")
(TSX: ARI), wishes to announce that effective November 30, 2006, the expiry
date of 2,224,125 common share purchase warrants (the "Warrants") issued to
Xmark Opportunity Fund, Ltd. Xmark JV Investment Partners, LLC, and Xmark
Opportunity Fund, L.P. (collectively, "Xmark") will be extended from
December 12, 2007 to December 31, 2008.
The Warrants were issued pursuant to a credit agreement (the "Credit
Agreement") dated December 9, 2005 between ARIUS and Xmark whereby Xmark
provided to ARIUS a convertible bridge loan facility in the amount of
US$2,000,000 (the "Loan Facility"). The Loan Facility is convertible into
common shares of ARIUS ("Common Shares") at a price of Cdn$0.80 per share at
any time on or before December 14, 2007 and bears an annual interest rate of
13.25% which is payable in cash or Common Shares at the option of ARIUS. The
Credit Agreement does not provide the Company with the right to prepay the
Loan Facility prior to its maturity.
ARIUS and Xmark have agreed that, subject to an extension of the expiry
date of the Warrants to December 31, 2008, ARIUS will be permitted to redeem
the Loan Facility. Upon the extension of the Warrants on November 30, 2006,
the Company intends to repay the Loan Facility. ARIUS intends to pay the
principal amount of the Loan Facility in cash, and to repay the amount of
accrued and unpaid interest on the Loan Facility by issuing Common Shares to
Xmark. The number of Common Shares to be so issued will be based on the volume
weighted average price for the 5-day trading period immediately prior to the
date on which the Loan Facility is repaid. As of November 30, 2006, the amount
of accrued and unpaid interest owing to Xmark under the Loan Facility will be
approximately US$123,000.
"The repayment of this loan is in the best interests of ARIUS given the
high interest rate" said Dr. David S. Young, President and Chief Executive
Officer of ARIUS.
The Toronto Stock Exchange (the "TSX") has conditionally accepted the
proposed amendment to the term of the Warrants subject to certain conditions
including the approval of a majority of disinterested shareholders (i.e.,
those shareholders other than Xmark) for such amendment to extend. Approval of
a majority of disinterested shareholders for such extension has been received.
Under Ontario Securities Commission Rule 61-501 - Insider Bids, Issuer
Bids, Business Combinations and Related-Party Transactions ("OSC Rule 61-501")
the extension of the expiration of the Warrants and the issuance of Common
Shares to Xmark each constitute a "related party transaction". Xmark is a
"related party" in respect to the Company since Xmark owns more than 10% of
the outstanding Common Shares of the Company. The Company has determined that
(i) the value of the repayment of the Loan Facility represents not more than
25% of the Company's market capitalization as at October 31, 2006, and (ii)
the value of the Common Shares to be issued to Xmark in satisfaction of the
interest portion of the Loan Facility represent not more than 25% of the
Company's market capitalization as of October 31, 2006. Accordingly, the
Company is relying on the market capitalization exemptions from the formal
valuation and minority shareholder approval requirements under OSC Rule 61-501
in respect of both the extension of the expiration of the Warrants and the
issuance of Common Shares to Xmark.
About ARIUS
ARIUS Research Inc. is a biotechnology company dedicated to personalizing
cancer therapy through the discovery and development of novel anticancer
monoclonal antibodies (MAbs). Established in 1999, ARIUS has built a
proprietary technology platform, FunctionFIRST(TM), that rapidly identifies
powerful MAbs targeting a variety of cancer indications. This antibody
generation engine has enabled ARIUS to assemble a growing pipeline, which is
used for commercial collaborations and in-house development. ARIUS has ongoing
partnerships with key biotechnology and drug development companies. The
company is listed on the TSX under the symbol "ARI".
Forward-Looking Statement
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, which involve known and unknown risks, uncertainties and other
factors that may cause our actual results to be materially different from any
future results, performance or achievements expressed or implied by such
statements. Forward-looking statements in this release include, but are not
limited to, ARIUS successfully advancing its new product programs as well as
licensing opportunities. These statements are only predictions and actual
events or results may differ materially. Factors that could cause such actual
events or results expressed or implied by such forward-looking statements to
differ materially from any future results expressed or implied by such
statements include, but are not limited to: early stage of development;
technology and product development; dependence on and management of current
and future corporate collaborations; future capital needs; uncertainty of
additional funding; no assurance of market acceptance; dependence on
proprietary technology and uncertainty of patent protection; intense
competition; manufacturing and market uncertainties; and government
regulation. These and other factors are described in detail in ARIUS' Annual
Report, forthcoming news releases and other filings with Canadian securities
regulatory authorities available at www.sedar.com. Forward-looking statements
are based on our current expectations and ARIUS is not obligated to update
such information to reflect later events or developments.
%SEDAR: 00013708E
