Dividend to occur after completion of reverse stock split,
definitive licensing agreement, and effective registration of SMFI
securities
WORCESTER, Mass. and
TORONTO, May 4, 2015 /PRNewswire/ -- Generex Biotechnology
Corporation (www.generex.com) (OTCQB:GNBT) today announced that it
intends to dividend to its stockholders a portion of the securities
it receives upon completion of a definitive licensing agreement to
license its RapidMist™ buccal drug delivery technologies to Smoofi,
Inc. (www.smoofi.com) (OTCQB:SMFI).
As announced on April 23, 2015,
Generex has signed a non-binding letter of intent in respect of the
licensing of its RapidMist™ buccal drug delivery technologies to
SMFI for the design, development, and commercialization of
medicinal and recreational cannabis derived products that deliver
the active pharmaceutical ingredients into the bloodstream via the
buccal membrane.
The Generex RapidMist™ drug delivery platform administers
medications directly into the mouth as a metered dose spray for
rapid absorption by the buccal mucosa (the inner lining of the
mouth). Generex's most advanced product in development using
RapidMist™ is Generex Oral-lyn™, an insulin spray product for the
treatment of diabetes mellitus.
SMFI is a provider of consulting and advisory services to
licensed medical and recreational marijuana operators and retail
dispensaries within the United
States. SMFI guides clients through the "seed to retail"
process, beginning with business planning, competitive strategy and
technology, regulatory compliance and local permitting, site
selection, setup and financing.
In consideration of the license grant, SMFI will issue to
Generex (a) $10,000,000 worth of SMFI
common stock, and (b) a warrant to acquire up to 15,000,000 shares
of SMFI common stock. The per share strike price of the
warrant will be determined based on the average closing price of
the SMFI common stock on the OTCQB for the 10 trading days
immediately preceding the effective date of the qualifying
registration statement. If that price is equal to or less than
$3.00, the strike price will be
$1.30. If that price is greater than
$3.00, the strike price will be equal
to 43.34% of that reference price.
Management of Generex intends to dividend a portion of the SMFI
common stock and a portion of the warrant to acquire SMFI common
stock to its stockholders following implementation of a reverse
stock split. Generex stockholders have previously approved the
implementation of a reverse stock split at any time prior to
December 31, 2015. The ratio of the
reverse stock split and the specific timing thereof are in the
discretion of the Generex Board of Directors.
The warrant will be exercisable by Generex stockholders for cash
only for a period of 90 days following the issuance of the
dividend. Any portion of the warrant unexercised by the Generex
stockholders during such period will revert back to Generex.
The dividend is intended to take place only after reaching a
definitive licensing agreement with SMFI, issuance of the SMFI
securities to Generex, and after a registration statement
contemplated to be filed by SMFI covering the securities to be
issued to Generex is declared effective.
The specific portion of the SMFI securities to be subject of the
dividend has not yet been finalized by Generex and SMFI, and will
be subject to Delaware rules
relating to impairment of capital, which may limit the number of
SMFI securities Generex can dividend to its shareholders. In
addition, Generex can make no prediction in respect of the inherent
value of the SMFI stock and, as SMFI has only recently became
traded on the OTCQB, the price of its shares may fluctuate
significantly.
"We look forward to the opportunity to award SMFI securities to
our fellow Generex stockholders so that they can participate more
directly in SMFI's success," commented Mark Fletcher, Generex's President & Chief
Executive Officer. "We are very enthusiastic about our buccal
cannabis venture with SMFI and hope that the project will result in
further validation of Generex's proprietary buccal drug delivery
platform technologies and set the stage for further product
development."
The discussions between Generex and SMFI are at an early stage,
and the letter of intent does not assure that SMFI will enter into
the licensing arrangement with Generex or utilize the RapidMist™
technologies. Even if Generex and SMFI establish a formal
license arrangement, any benefit from that arrangement will depend
upon the ability of Generex and SMFI to develop products, and of
SMFI to have such products approved by the appropriate regulators,
and successfully commercialize them.
About Generex Biotechnology Corporation
Generex is engaged in the research, development, and
commercialization of drug delivery systems and technologies.
Generex has developed a proprietary platform technology for the
delivery of drugs into the human body through the oral cavity (with
no deposit in the lungs). The Company's proprietary liquid
formulations allow drugs typically administered by injection to be
absorbed into the body by the lining of the inner mouth using the
Company's proprietary RapidMist™ device. Antigen Express, Inc. is a
wholly owned subsidiary of Generex. The core platform technologies
of Antigen Express comprise immunotherapeutic vaccines for the
treatment of malignant, infectious, allergic, and autoimmune
diseases. Antigen Express has pioneered the use of specific CD4+
T-helper stimulation technologies in immunotherapy. One focuses on
modification of peptides with Ii-Key to increase potency, while a
second relies on inhibition of expression of the Ii protein.
Antigen Express scientists, and others, have shown clearly that
suppression of expression of the Ii protein in cancer cells allows
for potent stimulation of T-helper cells and prevents the further
growth of cancer cells. For more information, visit the Generex
website at www.generex.com or the Antigen Express website at
www.antigenexpress.com.
About SmooFi, Inc.
Smoofi, Inc. is a provider of consulting and advisory services
to licensed medical and recreational marijuana operators and retail
dispensaries within the United
States. Smoofi guides clients through the "seed to retail"
process, beginning with business planning, competitive strategy and
technology, regulatory compliance and local permitting, site
selection, setup and financing. Smoofi will provide a wide variety
of industry education and training including business process
optimization and how to scale growth. The practice also includes
operational assistance with cannabis cultivation, offering
expertise in modern farming techniques, utilizing new technology
and conservation methods to improve quality and yield, waste
reduction and maximizing profit. For retail clients, the Smoofi
consulting practice assists with the design of retail locations,
staffing, loss prevention techniques, marketing and community
outreach. For more information please visit: www.smoofi.com.
Cautionary Note Regarding Forward-Looking Statements
This release and oral statements made from time to time by
Generex representatives in respect of the same subject matter may
contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
can be identified by introductory words such as "expects," "plan,"
"believes," "will," "achieve," "anticipate," "would," "should,"
"subject to" or words of similar meaning, and by the fact that they
do not relate strictly to historical or current facts.
Forward-looking statements frequently are used in discussing
potential product applications, potential collaborations, product
development activities, clinical studies, regulatory submissions
and approvals, and similar operating matters. Many factors may
cause actual results to differ from forward-looking statements,
including inaccurate assumptions and a broad variety of risks and
uncertainties, some of which are known and others of which are not.
Known risks and uncertainties include those identified from time to
time in the reports filed by Generex with the Securities and
Exchange Commission, which should be considered together with any
forward-looking statement. No forward-looking statement is a
guarantee of future results or events, and one should avoid placing
undue reliance on such statements. Generex undertakes no obligation
to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise. Generex
cannot be sure when or if it will be permitted by regulatory
agencies to undertake additional clinical trials or to commence any
particular phase of clinical trials. Because of this, statements
regarding the expected timing of clinical trials or ultimate
regulatory approval cannot be regarded as actual predictions of
when Generex will obtain regulatory approval for any "phase" of
clinical trials or when it will obtain ultimate regulatory approval
by a particular regulatory agency. Generex claims the protection of
the safe harbor for forward-looking statements that is contained in
the Private Securities Litigation Reform Act.
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SOURCE Generex Biotechnology Corporation