VANCOUVER, Feb. 22, 2013 /CNW Telbec/ - Akela Pharma, Inc. (the "Corporation") has announced that its wholly owned subsidiary, Formulation Technologies, LLC received a notice of default and that on February 13, 2013, the Subsidiary also received a Notice of Disposition of Collateral on Default from a secured creditor.
On December 13, 2012, Formulation Technologies, LLC d/b/a PharmaForm (the "Subsidiary"), the primary operating entity of Akela Pharma, Inc., entered into a facility lease (the "Lease") with Alliance Diversified Holdings LLC, a Delaware LLC, ("Alliance") for a facility located in San Diego, California. In connection with the execution of the lease, the Subsidiary entered into a Loan and Security Agreement with Biotech Investment Group, LLC, a Delaware LLC, ("Biotech") relating to the funding of certain tenant improvements, relocation costs, security deposit, portions of rents related to the leased San Diego facility and certain other cash needs. On December 31, 2012, the Corporation defaulted on its interest payments due to its senior secured creditors. Over the past several months, the Corporation, Biotech and a senior secured creditor of the Corporation (collectively, the "Parties") had been negotiating a transaction in an attempt to reach an acceptable settlement of the default claims of the Corporation's senior secured creditors and for the funding of future operations. While several agreements by and amongst the Parties were executed in January 2013, the Parties were ultimately unable to reach an agreement on all the issues and the intended results of the negotiations failed to materialize.
On February 5, 2013, the Corporation was notified that Biotech was discontinuing discussions with the Corporation and the senior secured creditor. On February 7, 2013, the Subsidiary was notified by Alliance that the Subsidiary was in default of the Lease entered into on December 13, 2012 between the Subsidiary and Alliance. On February 7, 2013, the Subsidiary was notified by Biotech as a result of being in default of the Lease, the Subsidiary was in default of terms of the Loan and Security Agreement dated December 13, 2012.
On February 13, 2013, the Subsidiary received a Notice of Disposition of Collateral on Default (the "Notice") from Biotech. The Notice was issued by Biotech as the Secured Party to the Loan and Security Agreement between Biotech and the Subsidiary. The Subsidiary was also notified that Biotech intended to foreclose and enforce is security interest on the Collateral (as defined in the Loan and Security Agreement between the Subsidiary and Biotech) which includes substantially all the assets of the Subsidiary.
Upon the conclusion of these transactions, the Corporation does not anticipate there to be any recovery for the shareholders or creditors of Akela Pharma, Inc.
The Corporation has not made the required filings of the Corporation's interim financial statements, management's discussion and analysis nor the CEO and CFO certifications for the period ended September 30, 2012 and was placed on the list of delinquent filers. The Corporation's securities remain under a cease trade order that was originally put in place on November 23, 2012 by the Investment Industry Regulatory Organization of Canada (IIROC). The Corporation voluntarily delisted from the Toronto Stock Exchange on December 7, 2012.
About Akela Pharma, Inc.
Akela Pharma, Inc.'s common shares are not registered for trading on any regulated exchange. There are approximately 32.4 million shares outstanding.
This press release contains statements which may constitute forward-looking information under applicable Canadian securities legislation or forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1955. Such forward-looking statements or information may include financial and other projections as well as statements regarding the company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect", anticipate", "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only expectations, and that the company's actual future results or performance may be materially different.
Such forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause our actual results, events or developments to be materially different from results, events or developments expressed or implied by such forward-looking statements or information. Such factors include, among others, the possibility that risks associated with requirements for approvals by government agencies; the possibility that such government agency approvals will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to advance development; our dependence on suppliers, collaborative partners and other third parties and the prospects and timing for negotiating supply agreements, corporate collaborations or licensing arrangements; our ability to attract and retain key personnel; and other factors as described in detail in our filings with the Canadian securities regulatory authorities at http://www.sedar.com.
In the event that any of these assumptions prove to be incorrect, or in the event that we are impacted by any of the risks identified above, we may not be able to continue in our business as planned.
For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with Canadian securities regulatory authorities, filed on SEDAR at http://www.sedar.com.
All forward-looking statements and information made herein are based on our current expectations as of the date hereof and we disclaim any intention or obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.
SOURCE AKELA PHARMA INC.