Generex Announces Intention to Dividend a Portion of Anticipated SMFI Securities to Its Stockholders upon a Reverse Stock Split
WORCESTER, Mass. and TORONTO, May 4, 2015
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(TM) 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(TM) 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(TM) 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(TM) is Generex Oral-lyn(TM), 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(TM) 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(TM) 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.
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