Admedus Ltd’s (ASX:AHZ) subsidiary Admedus Vaccines Pty Ltd has entered into a letter of intent (LOI) with Hong Kong-based investor Star Bright Holding Ltd as part of negotiations for an ongoing funding arrangement.
The LOI includes payment of a non-refundable break fee of $500,000 which secures a six-month exclusivity period.
This will enable finalisation of the terms of an agreement based on a minimum initial investment of $18 million for a 60% interest, with existing shareholders retaining 40%.
Alternative finance for research division
Admedus’ focus is on investing in and developing next-generation technologies with world-class partners.
In meeting this goal, the company acquires strategic assets to grow product and service offerings, and expand revenues from its existing medical sales and distribution business.
The funding agreement aims to provide Admedus Vaccines with alternative finance to continue its research into preventative treatments and vaccines for diseases and cancers.
Chief executive officer Wayne Paterson said: “After a long period of negotiation, I am pleased that we are moving towards a new funding opportunity for Admedus Vaccines which would see it operate as a new entity with Admedus Limited maintaining an active stake.”
“The due diligence process has been completed, with the terms and construct of the deal to be negotiated over the next six months.
“We look forward to working through these negotiations and will update the market again upon signing a final agreement.”
Alternative funding for immunotherapies division
Once finalised, this agreement will also deliver on management’s earlier commitment to secure an alternative funding source for the immunotherapies division.
This arm of the company’s operations requires significant additional investment to fulfil its potential as the developer of ground-breaking vaccines.
Admedus Vaccines non-executive director Professor Ian Frazer said: “This arrangement will greatly enhance our resources and allow myself and the team to accelerate our projects as we delve further into the science that may ultimately lead to the development of ground-breaking vaccines.”