Spectra Systems Corporation acquires interest in Solaris BioSciences
LONDON: Spectra Systems Corporation has increased its equity interest in Solaris (the principal shareholder of which is Dr. Lawandy, CEO of Spectra) from 4.79 percent to 48.65 percent for an aggregate consideration of c.USD700,000.
This transaction is expected to be the first of several over time which are expected to be a vehicle for building additional value for investors in business areas outside the authentication business which have rapidly evolving valuations.
Spectra seeks to find early stage technology companies in the healthcare, biotechnology and energy sectors which draw on its core technology capabilities and where it can minimize the use of cash consideration.
Solaris, which is targeting the medical and biotech markets, has developed and patented a new, high sensitivity, rapid and compact, optically based technology for the characterisation of bio-fluids and as an assay for the detection of proteins, RNA/DNA, antibodies, and other biomolecular moieties using extremely low sample volumes.
The technology has been demonstrated and uses nano-particle consumables (particles with sizes less than a micron) and an all solid-state laser source to interrogate the ultra-small samples volumes.
When used with precision nano-particles, the method is capable of determining the viscosity of pin-prick volumes obtained using modified test strip methods of biological fluids such as blood plasma, which have been directly correlated with Covid-19 (SARS-2) associated hyper-viscosity, cardio-metabolic risk factors, proteinuria, and homeostasis in cardiac surgery patients in the early postoperative period.
The technology can also be utilized with surface functionalized nano-particles with biological samples containing target molecules specific to a virus or pathogen to act as an ultrasensitive assay. This application is adaptable and can be readily used for new, yet undiscovered pathogens.
The technology is protected by two issued United States Patent and Trademark Office (USPTO) patents and associated foreign fillings (USPTO 9,970,854 and 10,379,114, “Nondegenerate two-wave mixing for identifying and separating macromolecules”). These patents will be in force for another 16 and 18 years respectively. Solaris also holds three additional patents, two of which are relevant to the area of commercial focus.
As a result of the Acquisition, the interest (on an as-converted basis) in Solaris of Dr Lawandy has declined from 84.54 per cent to 46.01 per cent. and that of Spectra has increased to 48.65 per cent.
Whilst the transaction is with a related party, the values associated with Solaris relative to Spectra are such that the requirements of AIM Rule 13 are not triggered. The parties assigned a USD 850,000 pre-money valuation of Solaris, which is supported by an independent third party valuation of the two key patents which underpin the technology being commercialized. These patents were independently valued at $535,000.
In accordance with Delaware law, the transaction was (a) unanimously approved by all three of Spectra’s non-executive Directors and (b) specially approved by a majority-in-interest of the disinterested stockholders of Solaris. In addition, going forward Spectra’s shares in Solaris will be voted as directed by Spectra’s non-executive Directors.
In the year ended 31 December 2019, Solaris incurred a loss after taxation of c.USD 10,000 (c.£7,000) on nil revenue. Its net liabilities at that date amounted to c.USD450,000 (c.£336,000), including the aforementioned loans which at that date amounted to USD305,942.26 (c.£294,000).
Application has been made for the Consideration Shares to be admitted to trading on AIM of the London Stock Exchange.
Commenting on the Acquisition, The Honourable BJ Penn, Chairman of Spectra, stated: “Solaris intends to deploy, in new markets, technologies related at a core level to those utilized by Spectra in its current markets. This is therefore an exciting acquisition by Spectra which is intended to introduce it into biotech and healthcare markets.
The Directors of Spectra are confident that the transaction described herein will enable Solaris to launch its first prototype device within 24 months.”
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