Tuesday, 26 June 2012

Neurobiopharm Dividend - Neptune Files Preliminary Prospectus



While a news release has not been issued by Neptune, we wanted to provide comment on the Neurobiopharm situation as a Preliminary Prospectus has now been filed at sedar.com. This is long awaited news by NTB shareholders regarding the neuro dividend.

We do not intend to discuss in detail 140 pages of Prospectus documentation on the pending dividend of Neurobiopharm stock and warrants to Neptune shareholders, but we'll touch on some of the key points.

It appears the Neuro structure is similar to that utilized for the dividend of Acasti warrants to NTB shareholders, which to this point have provided several hundred percent returns from the original $0.47 exercise price. Acasti warrant holders ended up exercising their warrants prior to the listing on the TSX Venture Exchange as the strike date for the warrants was reached before APO was publicly listed.

1) In regards to Neuro, NTB shareholders will receive the following:

Upon qualification of this Prospectus with the securities regulatory authorities in each of the provinces and territories of Canada, 2,000,000 Units of the Corporation will be distributed by Neptune by way of dividend-in-kind, to the holders of record of Neptune Common Shares as at the close of business on the Dividend Record Date (we are seeking clarification), such that each Shareholder on the Dividend Record Date will receive one (1) Unit for each lot of approximately 24.90 Neptune Common Shares held. Each Unit will consist of one (1) Class A Share and two (2) Warrants. Each full Warrant entitles its holder to purchase one (1) Class A Shares at a price of $0.40 plus a transfer premium of $0.35 payable to Neptune upon exercise (see below), and each Warrant expiring on the occurrence of the earliest of the two following events: (i) fifteen (15) days after the listing of the Class A Shares on a recognised stock exchange; or (ii) on April 12, 2014. This Prospectus is being filed to enable the Units of the Corporation held by Neptune to be delivered to the Shareholders in Canada.

The Transfer Premium ensures that in the event that the Warrants are exercised, a partial consideration be payable to Neptune, thus benefiting all shareholders of Neptune (such partial consideration being deferred in time as it is only payable to Neptune upon exercise and conversion of the Warrants).


Note: U.S. shareholders should read the sections relating to their holdings as a key phrase is "accredited investor".

2) Neuro as of April 30, 2012 had just over $1 million in cash. According to the document the next 12 months call for:
 
* $230,000 for prescription drug development program and
* $520,000 for OTC and Medical Food products development and commercialization
* $150,000 intellectual property protection, research and development costs, laboratories rental and spending, administration expenses and salaries. 
 
The Corporation does not intend to raise additional proceeds from third parties to fund any anticipated
negative operating cash flow and does not expect any material capital expenditure for the next twelve months, except as disclosed above. The Corporation estimates that it will first reach commercial production of its Medical Foods after completing preclinical/clinical studies, which the Corporation estimates should be achieved within one (1) year and representing an investment of approximately $350,000.

3) Neptune owns 8,500,990 Class A Shares, representing 99.99% of Class A Shares issued and outstanding of Neuro. Note: There are a series of classes of shares and warrants and for the exact breakdown refer to the Prospectus details.
 
4) NeuroBio’s goal is to become a leading biopharmaceutical company dedicated to the research, development and commercialization of proprietary active pharmaceutical ingredients (“API”) for the management of neurodevelopmental, memory, concentration, learning and neurological disorders, from
prevention to treatment.
 
The Corporation’s product portfolio consists of MPL VI, MPL VII, MPL VIII and MPL VIX, each a proprietary highly concentrated phospholipid extracted and purified from different marine species and each being at different development and/or validation stages before commercialization.

NeuroBio is currently developing proprietary APIs for:

1. medical foods, (MPL VI and MPL VIII) customized to fulfill nutrient deficiencies associated with ADHD (Attention deficit hyperactivity disorder is a neurobehavioral development disorder) and cognitive decline respectively;

2. OTC/medical food products (MPL VII) for memory, concentration and learning; and

3. prescription drugs (MPL IX) for the treatment/management of neurological disorders.
 
Please remember that Acasti is utilizing the intellectual property and patents around NKO (krill oil) in relation to finding an all natural answer for cardiovascular and cholesterol issues.
 
Neuro is focused on applications for neurological disorders. Alzheimers is high on the target list.
 
To view the document, go to http://www.sedar.com/, company profiles, Neurobiopharm.