Perth-based biotechnology company Stirling Products has been given a financial lifeline by Alpha Securities as the company terminates two deals to streamline its focus.
Perth-based biotechnology company Stirling Products has been given a financial lifeline by Alpha Securities as the company terminates two deals to streamline its focus.
In an announcement released to the market late yesterday afternoon, the company said it has entered into an agreement with Sydney-based Alpha to raise a total of $1.76 million.
Stirling will immediately raise $260,000 through two share placement tranches to Alpha, with each share priced at 0.4 cents.
Each share will have two attaching options exercisable at 0.8c prior to December 31 2012.
Stirling will also raise an additional $1.5 million through two convertible notes issues to Alpha. The note and option issues are subject to shareholder approval.
Chief executive and managing director Calvin London said following the issue of the first tranche of shares, the current board and CEO will step down in its entirety to make way for a new executive management team.
"The current Board feels that it is time for change and the introduction of new management to guide the company moving forward as its product marketing phase develops through the course of the immediate future," Mr London said.
He also indicated that "while there would be a transition period, his employment agreement was not being renewed. Aside from a transition period, whether or not I personally continue in some capacity with the company is undecided at this point in time due to personal issues."
Meantime, Stirling said that as a result of the current economic climate and delays encountered in getting a number of products to market, it has taken a number of actions to streamline its focus.
The company said it has terminated its licensing deal with Canadian company Aquience Inc over the PetQuench product and ceased its distribution deal with South African business Afgri Operations over the R-salbutamol product.
"Stirling is also reviewing its North American operations in light of the company's resource availability to minimise its exposure for operational expenditure during the global economic crisis that is affecting most businesses," Stirling said.
"The staffing levels at Stirling's North American plant have already been reduced and plans to lease a new manufacturing facility (that was to have been built last year) have been suspended indefinitely until the company determines the outcome of its review."
The company will hang on to the ProVale product which has potential to generate significant revenue.
Late last year Stirling was teetering on the brink of administration after a $960,000 capital raising was canned and talks began on the possible disposal of its assets
