Neptune Tech (NEPT) Enters Prepayment Agreement, Will Increase Acasti Pharma Stake

December 4, 2012 9:52 AM EST
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Neptune Technologies & Bioressources Inc. (Nasdaq: NEPT) has entered into a prepayment agreement with Acasti Pharma Inc. ("Acasti"), a majority-owned subsidiary of Neptune, pursuant to which Acasti has exercised the option embedded in its exclusive technology license agreement dated August 7, 2008 entered into between Acasti and Neptune (the "License Agreement") to pay in advance all of the future royalties payable under the License Agreement (the "Prepayment").

The Prepayment will have the effect of increasing Neptune's equity participation in Acasti (from approximately 57% to approximately 61% if shares were issued on this date), given that Neptune, subject to required approvals, will be issued 6,750,000 Class "A" shares in the share capital of Acasti (the "Shares"), issuable at a price of $2.30 per Share, upon the exercise of a warrant delivered to Neptune at the signature of the Prepayment Agreement. This reflects a Prepayment value, confirmed by an independent valuation expert using the pre-established Prepayment formula set forth in the License Agreement, that amounts to approximately $15.5 million.

The Prepayment and the issuance of the Shares to Neptune are subject to the approval of the TSX Venture Exchange and of the disinterested shareholders of Acasti (excluding Neptune and non-arm's length parties to Neptune) at the next annual meeting of shareholders of Acasti. If approved by disinterested shareholders, Acasti will no longer be required to pay any royalties to Neptune under the License Agreement during its term for the use of Neptune's intellectual property under license.

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