$1.3 million balance repaid, improving cash flow and resulting in non-cash charge
MISSISSAUGA, CANADA, October 4, 2021 – Microbix Biosystems Inc. (TSX: MBX, OTCQX: MBXBF, Microbix®), a life sciences innovator and exporter, announces that it has completed the early repayment of a debenture series on which it owed C$ 1.3 million and was paying an interest rate of 9.0%.
This debenture was issued on January 31, 2014 for an outstanding amount C$ 2.0 million and was subsequently being repaid via quarterly payments of interest and principal of $61,100. At October 1, 2021, the balance owing on this debenture was C$ 1,331,758 which has now been fully-repaid. The repayment was made on the basis of a debenture provision permitting early repayment given at least 90 days’ notice.
Microbix elected to fully repay this debenture due to its strong cash flow generation, which has resulted in a positive cash balance of C$ 10.0 million at September 30, 2021, additional to which Microbix has an undrawn line of credit of up to C$ 2.0 million on which it would pay an interest rate of 4.45%. It therefore made little sense to keep this 9% debenture outstanding until its scheduled maturity date of January 31, 2029. Management calculates that this early repayment will add C$ 244,400 to annual cash flow, also meaningfully reducing interest-related outlays and improving the strength of Microbix’s balance sheet.
As a counterpoint to the very real financial benefits of the early repayment of this debenture, there will be a one-time and non-cash charge upon Microbix’s earnings in the fiscal first quarter ending December 31, 2021 (“Q1 2022”). This one-time and non-cash charge is created due to this early and complete repayment expunging capitalized costs associated with the terms of issuance of the debenture that were being expensed over the full term of the debenture. Under the associated “IFRS” accounting rules, the amount of that one-time and non-cash expense is estimated at $0.5 million, which will be charged against Microbix’s earnings for Q1 2022 and the fiscal-year ending September 30, 2022 (“Fiscal 2022”). For clarity, Microbix expects that it will remain strongly net earnings and cash flow positive for Q1 2022 even with this one-time and non-cash charge, as it should be for the broader 12-months of Fiscal 2022.
Cameron Groome, CEO and President of Microbix, stated, “Over the course of fiscal 2021, our team has realized long-planned improvements in margins on Microbix’s antigens business, driven triple-digit percentage growth of our sales of innovative, proprietary, and branded QAPs, and successfully-delivered upon creating a secure domestic supply of highest-quality viral transport medium for Ontario. As a direct consequence of those achievements, we now have the ability to repay higher-cost corporate debt.”
Jim Currie, CFO of Microbix, also commented, “The growing financial success of Microbix enables us to provide early repayment of more expensive debt, and still have ongoing availability of lower-cost debt capital if it proves to be needed for future corporate initiatives. The current debenture repayment provides a lasting improvement to Microbix’s cash flow and helps demonstrate our financial stability to current and prospective customers and business partners.”
About Microbix Biosystems
Microbix develops proprietary biological technology solutions for human health and well-being, with about 90 skilled employees and sales nearing C$ 2.0 million per month. It makes a wide range of critical biological materials for the global diagnostics industry, notably antigens for immunoassays and its laboratory quality assessment products (QAPs™) that support clinical lab proficiency testing, enable assay development and validation, or help ensure the quality of clinical diagnostic workflows. Microbix antigens enable the antibody tests of over 100 international diagnostics companies, while its QAPs are sold to clinical laboratory accreditation organizations, diagnostics companies, and clinical laboratories. Microbix QAPs are now available in over 30 countries, distributed by 1WA (Oneworld Accuracy Inc.), Alpha-Tec Systems, Inc., Diagnostic International Distribution SpA., Labquality Oy, The Medical Supply Company of Ireland, R-Biopharm AG, SDT Molecular Pte Ltd, Seegene Canada Inc., and Thomas Scientific LLC. Microbix is ISO 9001 and 13485 accredited, U.S. FDA registered, Australian TGA registered, Health Canada establishment licensed, and provides CE marked products.
Microbix also applies its biological expertise and infrastructure to develop other proprietary products and technologies, most notably viral transport medium (DxTM™) to stabilize patient samples for lab-based molecular diagnostic testing and Kinlytic® urokinase, a biologic thrombolytic drug used to treat blood clots. Microbix is traded on the TSX and OTCQX, and headquartered in Mississauga, Ontario, Canada.
This news release includes “forward-looking information,” as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, discussion of the debenture repayment and its relevance, Microbix’s business and business results, goals or outlook, risks associated with financial results and stability, development projects such as those referenced in its corporate presentation, regulatory compliance and approvals, sales to foreign jurisdictions, engineering and construction, production (including control over costs, quality, quantity and timeliness of delivery), foreign currency and exchange rates, maintaining adequate working capital and raising further capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management’s current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward-looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company’s control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company’s judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.
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For further information, please contact Microbix at:
|Cameron Groome, CEO
Adelaide Capital Markets
(647) 203-8793 firstname.lastname@example.org
Torrey Hills Capital
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Microbix®, DxTM™, Kinlytic®, and QAPs™ are trademarks of Microbix Biosystems Inc.