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Oculus Innovative (OCLS) to Spin-Off Ruthigen Unit

January 10, 2013 8:12 AM EST
Oculus Innovative Sciences, Inc. (NASDAQ: OCLS) announced that its board of directors has unanimously approved a spin-off of its novel biotechnology business, Ruthigen, Inc.

Oculus management is currently working with securities counsel and bankers on a plan to provide equity in Ruthigen to Oculus shareholders. Oculus expects the spinoff to be a tax-free stock distribution and ultimately anticipates Ruthigen to become an independent NASDAQ-traded company. Oculus has retained bankers and financial advisors for the spinoff, and expects the spinoff to be completed in 2013. Execution of the transaction requires further work relative to structure, governance and other significant matters and risks.

Upon completion of the spinoff, Hoji Alimi, founder and current chief executive officer of Oculus, will remain on the board of directors at Oculus and serve as chairman and chief executive officer of Ruthigen, Inc. Jim Schutz, the current chief operating officer and director of Oculus, will assume the role of chief executive officer of Oculus, with a new board chair to be elected shortly. Each company will operate with independent management teams and boards of directors to establish separate governance and financials as required by accounting rules. Additional details regarding structure will be determined and disclosed at a later time.

Oculus will retain all Microcyn drug and device indications while Ruthigen will focus on RUT58-60, a drug candidate intended for the prevention of infection in trauma and surgical procedures. RUT58-60 is a new unique chemical formulation containing twice the concentration of hypochlorous acid, along with magnesium and no sodium hypochlorite.

The completion of the proposed spinoff is subject to certain customary conditions, including final approval by Oculus' board of directors, the filing and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission including a registration statement on form S-1, and any necessary third-party consents, as well as certain other matters relating to the spinoff, receipt of legal opinions, execution of intercompany agreements, and final approval of the transactions contemplated by the spinoff, as may be required under Delaware law. Oculus notes that there can be no assurance that any separation transaction will ultimately occur, or, if one does occur, its terms or timing.


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