StageAcquired | Acquired
Missing: Chemstar's Product Demo & Case Studies
Promote your product offering to tech buyers.
Reach 1000s of buyers who use CB Insights to identify vendors, demo products, and make purchasing decisions.
Missing: Chemstar's Product & Differentiators
Don’t let your products get skipped. Buyers use our vendor rankings to shortlist companies and drive requests for proposals (RFPs).
Chemstar has filed 1 patent.
Geotechnical engineering, Sustainable agriculture, Environmental soil science, Organic gardening, Soil
Geotechnical engineering, Sustainable agriculture, Environmental soil science, Organic gardening, Soil
Latest Chemstar News
May 10, 2021
Proposed Disposal of Supermarket Retail Business RNS Number : 2637K and Notice of General Meeting 20 September 2016 - PuriCore plc (AIM: PURI), an emerging specialty biopharmaceutical company focused on leveraging its proprietary immunomodulatory technology, today announces that in line with its strategy to focus on Drug Development, it has agreed to sell the Group's Supermarket Retail Business subject to Shareholder approval and other customary requirements. The Disposal constitutes a fundamental change of business under Rule 15 of the AIM Rules. Accordingly, the Disposal is conditional upon approval of Shareholders at a general meeting to be held on 6 October 2016. · Supermarket Retail Business proposed sale to Chemstar Corp. for an aggregate gross consideration of US$13.5 million, payable in cash on Completion, subject to a net working capital adjustment · Disposal is in line with strategic review announced in February - PuriCore's focus is now its Drug Development strategy, which is based on the Company's patented hypochlorous acid technology and formulations at high concentrations - The Company intends to develop novel, prescription treatments for inflammatory diseases, including Dermatology, Ophthalmology and potentially rare diseases · Disposal net proceeds will be used to progress ongoing development of novel immunomodulatory therapies - To fund studies and other work necessary to support the two planned Investigational New Drug (IND) submissions - To help fund planned clinical trials in two therapeutic areas following approval of the IND applications - For general operational purposes · The Disposal is conditional on approval by Shareholders at a general meeting to be held on 6 October 2016 as well as the satisfaction of other customary closing conditions A circular, explaining the background to and reasons for the Disposal together with a notice of a general meeting (the "Circular"), is being made available to Shareholders today and is also available on the Company's website. The Company also announced today its interim financial results for the six months ended 30 June 2016. For more information please see today's separate announcement. "In February we announced that our focus going forward would be to develop novel, prescription treatments for inflammatory diseases. The proposed sale of our Supermarket Retail Business is in line with this strategy and we are delighted to have found a suitable buyer for the business. We would like to thank all of our team members who have contributed to the development of the Supermarket Retail Business for their ongoing commitment and we wish the business much future success under its planned new ownership. We remain focused on Drug Development and we are on track to submit our first two INDs in Q1 2017." A copy of the Letter to Shareholders included within the Circular is reproduced in full below without material adjustment. It was announced today that in line with its strategy as a drug development company, PuriCore, Inc. (the "Seller"), a wholly-owned subsidiary of PuriCore plc, has agreed to sell the Group's Supermarket Retail Business to Chemstar Corp. ("Chemstar") for an aggregate consideration of US$13.5 million payable in cash on Completion, subject to a net working capital adjustment and contingent on Shareholder approval and other customary requirements. Chemstar will satisfy the purchase price principally by drawing down under a new bank facility as well as from its own resources. Chemstar is a provider of food safety and sanitation products and services to retail food stores, convenience stores, quick service restaurants and food plants in the US, Canada and Mexico. Chemstar also offers chemical solutions and cleaning dispensers for retail supermarkets, food service, restaurants, hospitality, food processing and healthcare institutions. In February 2016 PuriCore confirmed that its strategic focus going forward would be to develop novel, prescription treatments for inflammatory diseases, including Dermatology, Ophthalmology and potentially rare diseases. At that time the Board also announced it was considering strategic options for the Supermarket Retail Business. Given the size of the Supermarket Retail Business relative to the Group, the Disposal is deemed to be a disposal resulting in a fundamental change of business under Rule 15 of the AIM Rules and it is therefore conditional, inter alia, on approval by Shareholders in a general meeting. The General Meeting is therefore being convened at the offices of CMS Cameron McKenna LLP, Cannon Place, 78 Cannon Street, London EC4N 6AF, at 11.00 a.m. on 6 October 2016, at which an ordinary resolution will be proposed to approve the Disposal. To pass the resolution, more than half of the votes cast must be in favour of the Resolution. The Notice convening the General Meeting is set out in Part IV of the Circular. Subject, inter alia, to Shareholders approving the Disposal at the General Meeting, it is currently anticipated that the Disposal will be completed on 7 October 2016. If the Resolution is not passed, the Disposal will not proceed. PuriCore has historically built businesses based on the application of its patented hypochlorous acid technology. In June 2014, the Company sold one of these, its UK Endoscopy business, to Cantel Medical. The Board subsequently embarked upon a strategic and operational review in order to identify how best to leverage further the Company's proprietary technology so as to drive long-term Shareholder value. PuriCore worked with a leading pharmaceutical consulting firm and influential key opinion leaders to complete a comprehensive drug development strategic review to assess unmet medical needs with considerable commercial value suitable for the development of a product pipeline based on its proprietary immunomodulatory technology. This comprehensive review led to a new strategic focus for the Company and, following the appointment of Alex Martin as the Company's Chief Executive Officer in June 2015, the Group confirmed its new strategic focus in February 2016. The Company is focused on the development of novel, prescription, topical treatments for inflammatory diseases with a differentiated mechanism of action that are based on formulations containing high concentrations of hypochlorous acid. Using such formulations, the Company has generated compelling evidence in pre-clinical studies of novel immunomodulatory activity with potential application for the treatment of diseases in the target therapeutic areas. The target indications include inflammatory diseases in Dermatology, Ophthalmology and potentially certain rare diseases. During 2016, the Company has continued formulation development and conducted a series of additional pre-clinical and toxicology studies in support of two planned IND filings with the FDA, anticipated in Q1 2017. Reflecting the Company's new strategic direction, the Company appointed Dr. Christian Peters to the position of Chief Medical Officer in April 2016 and expanded the Board with the appointment of Dr. Simba Gill, an experienced biotechnology executive, in March 2016 as a Non-Executive Director. In June 2016, the Company announced that it had successfully completed a pre-IND meeting with the FDA. This meeting related to the Company's proprietary topical hydrogel, which is being developed for the treatment of inflammatory skin disease. Recently, the Company learned that additional positive pre-clinical data on Atopic Dermatitis was accepted for a poster presentation at the Second Inflammatory Skin Disease Summit to be held in New York in November of this year. In August 2016, in light of positive pre-clinical results, the Company requested and received a date in November 2016, for a pre-IND meeting with the FDA for PR013, which is being developed for the treatment of Allergic Conjunctivitis. The Group expanded its intellectual property portfolio in August upon the grant of two new patents by the US Patent and Trademark Office in connection with the method of production, formulations and method of use of hypochlorous acid at therapeutic drug concentrations for the treatment of a broad range of inflammatory skin diseases. In light of the opportunities to generate potentially significant Shareholder value through the drug development strategy, and the associated planned investments, the Board announced in February 2016 that it was considering strategic options for the Supermarket Retail Business, including a potential sale. The Supermarket Retail Business addresses a very different market segment to the new strategic direction of the Company and still requires investment to deliver growth. The Board engaged advisers to assist in identifying potential purchasers of the Supermarket Retail Business and a number of strategic and financial buyers were identified and approached to ascertain their interest. Business presentations and synergy discussions were held with certain interested parties. Accordingly, after careful consideration of the Company's strategy and market interest received, the Board concluded that a sale of the Supermarket Retail Business to Chemstar on the terms set out below was in the best interests of the Company and Shareholders as a whole. The Supermarket Retail Business offers products to US (and, on a limited basis, Canadian) supermarket retailers and food service operators for use in their fresh produce departments to improve freshness and quality of produce. Additionally, the Supermarket Retail Business supplies products which enhance the freshness of cut flowers in supermarket floral departments. The Supermarket Retail Business initially began by offering generator systems for supermarket retailers, producing an on-site hypochlorous acid solution (Sterilox®) which replaced water for rinsing, crisping, misting and cut fruit/vegetable applications. The Company developed a method to stabilise the hypochlorus acid in a bottled format with a commercially attractive shelf-life which led to the development of a liquid concentrate product (Produce Maxx™) and a potassium-based floral concentrate product (FloraFresh®). With the introduction of Produce Maxx™ and FloraFresh®, the Supermarket Retail Business advanced its strategy to expand its core offerings to meet changing customer needs, and to establish a base of recurring revenues. The Group also announced its Interim Financial Results today. The results for the Supermarket Retail Business appear in the Interim Financial Results as Operations Held for Sale in accordance with applicable accounting standards. A summary of the Interim Financial Results is set out below. As at 30 June 2016, net cash and cash equivalents were US$12.8 million (31 December 2015: US$15.5 million). Revenue from the Continuing Operations was US$0.4 million (H1 2015:US$0.7 million, including US$0.3 million related to Health Sciences and US$0.4 million of other revenue) due to higher royalty income from the Company's distribution arrangement for its medical device Wound Care product partially offset by no BPR income. Operating expenses increased to US$3.1 million (H1 2015: US$2.5 million) due to increased investment in research, development and regulatory activities in drug development partially offset by lower sales and marketing costs for the medical device products. EBITDA loss was US$2.5 million (H1 2015 loss: US$1.7 million) due to increased drug development spend and the absence of comparable BPR revenue. A significant growth in investment is planned for the second half of 2016 to prepare for the IND filings in early 2017. Investments are expected to increase in support of the filing of the two INDs and, following FDA acceptance, subsequent commencement of clinical studies in 2017. The Supermarket Retail Business grew revenues by 28.3 per cent. to US$10.8 million (H1 2015: US$8.4 million), driven by capital equipment sales, new concentrate customers and higher consumption. Additionally, as reflected in the improvement of gross margins to 41.2 per cent. (H1 2015: 19.5 per cent. ), the Company's actions to improve the reliability of its generators and update earlier versions of its concentrate delivery systems with lower-cost more reliable units have resulted in significantly lower service costs during the comparative periods. Operating expenses decreased to US$3.5 million (H1 2015: US$4.4 million) driven by lower overall spending including reduced sales, marketing and corporate costs. EBITDA profit was US$1.5 million (H1 2015 loss: US$2.2 million) driven by higher revenue, lower service costs and reduced operating expenditures. To grow the Supermarket Retail Business, further investment is required. Under the terms of the Disposal Agreement, Chemstar and the Seller have agreed that, among other things, Chemstar will acquire the Supermarket Retail Business. The consideration for the Disposal will be US$13.5 million payable in cash at Completion. Chemstar has paid the sum of US$500,000 to be held as a deposit which will be released to the Seller if the Seller prior to Completion terminates the Disposal Agreement in accordance with its terms other than as a result of the Resolution not being passed by Shareholders. If Chemstar terminates the Disposal Agreement in accordance with its terms as a result of the Resolution not being passed by Shareholders, the sum of US$500,000 will be released to Chemstar and additionally Chemstar will be entitled to reimbursement by the Seller of its out-of-pocket costs and expenses actually incurred in connection with the Disposal up to a maximum amount of US$300,000. On Completion the sum of US$500,000 will be released to the Seller and will form part of the purchase price of US$13.5 million to be paid to Chemstar. The consideration of US$13.5 million is subject to adjustment up or down, on a US$-for-US$ basis, to the extent that the net working capital of the Supermarket Retail Business at Completion is different from an agreed target. If the difference is less than US$100,000, no adjustment will be made to the consideration. If the difference is in excess of US$100,000, an adjustment will be made up or down equal to the amount of such excess. At Completion, the Seller and Chemstar will enter into an Intellectual Property Licence Agreement and a Trademark Licence Agreement. Under those agreements (i) the Seller will grant to Chemstar a perpetual, fully-paid, royalty free licence to certain technology and related intellectual property necessary to make, use, market, promote and sell the products produced by the Contemplated Business; and (ii) Chemstar will grant to the Seller a licence for use of the Sterilox® trademark in the US in connection with certain specified fields. The Disposal Agreement contains certain representations and warranties from the Company and the Seller in favour of Chemstar. Under the Disposal Agreement, the Company and the Seller have jointly and severally agreed to indemnify, defend and hold harmless Chemstar from and against liabilities and losses, if any, which Chemstar may suffer or incur from a breach of representation or warranty or a breach of covenants (including non-competition and non-solicitation covenants), or from any Excluded Asset (as defined in the Disposal Agreement) or from any Excluded Liability (as defined in the Disposal Agreement). The aggregate amount recoverable for breach of the representations and warranties (except with respect to a breach of certain fundamental representations and warranties, for example those relating to corporate status, authorisation, taxes and, certain environmental matters) is limited to US$2 million. The aggregate amount recoverable for liabilities and losses from breach of a fundamental representation and warranty, a breach of covenants (including non‑competition and non-solicitation covenants) or from any Excluded Asset or from any Excluded Liability is limited to US$13.5 million (plus or minus an amount equal to the Adjustment). There is a limited period during which the Group will provide transition services to Chemstar. The principal terms of the Disposal Agreement are described in more detail in Part II of the Circular. The gross proceeds from the Disposal will be US$13.5 million, subject to Adjustment, and net proceeds are expected to be approximately US$10.8 million, following payment of both transaction costs and separation payments to employees of the Supermarket Retail Business whose employment with the Group will terminate as a result of the Disposal. In accordance with the Company's new strategic direction, the net proceeds of the Disposal will be used to progress the Company's ongoing development of novel immunomodulatory therapies in areas such as Dermatology and Ophthalmology, and potentially certain rare diseases. Specifically the funds will be used to fund studies and other work necessary to support the two planned IND submissions and ultimately to help fund clinical trials in two therapeutic areas following approval of the IND applications. The net cash proceeds may also be used for general operational purposes. Following a period during which the operations of the Supermarket Retail Business will be transitioned to Chemstar, the current team will be significantly reduced in size and will have a greater focus on the core strategy of building a biopharmaceutical business. The Continuing Group will have a modest revenue stream from the royalty associated with the Company's distribution arrangement for its medical device Wound Care product. In the event that Shareholders do not approve the Disposal, the Group will not be able to apply the net proceeds of the Disposal to its stated drug development strategy. The absence of proceeds would accelerate the need for the Group to find alternative sources of funding the investments necessary to advance the drug development strategy and fund operations of the Company. Additionally, not having access to the Disposal proceeds could delay the completion of activities needed to support the two IND filings and consequently delay their submission. Significant costs have been incurred in relation to the Disposal which would not be off-set against proceeds if the Disposal did not proceed. Further, the Board considers that the transition of PuriCore to a biopharmaceutical company requires the focus of the executive team, and the Group would have more limited resources available to pursue this strategy in the short-term if the Supermarket Retail Business remained part of the Group. Failure of the Disposal to proceed would result in the need to pursue other strategic alternatives for the Supermarket Retail Business and therefore distract the executive team. The Supermarket Retail Business, if retained rather than sold and if it were to become cash flow positive on a consistent basis, might be able to contribute cash toward the advancement of the new drug development strategy. However, the Board considers that it would take further investment and time to bring the business into consistent cash flow profitability while growing the number of concentrate placements. The associated cash burn could hinder the Company's ability to secure alternative sources of funding, including potentially an equity capital raise, needed to advance the new drug development strategy. Accordingly, the Directors believe resources are more prudently spent on the drug development strategy. The Board considers that the risks associated with the new strategic focus are commensurate with the potential for significant value creation through the development of applications of PuriCore's proprietary hypochlorous technology, and that the potential benefit to Shareholders justifies the investment of the net proceeds of the Disposal in the manner described in this document. Following Completion, the Continuing Group will be focused primarily on activities to develop and seek approval for certain therapeutic applications of hypochlorus-based pharmaceutical formulations. Accordingly, the Continuing Group will have a significantly reduced number of employees comprising executive management, clinical and regulatory support, research and development, strategy and limited administration functions. Additionally, the Continuing Group will continue to earn modest royalty revenue associated with Vashe® wound-care product, which continues to be licensed to a marketing and manufacturing partner, SteadMed Medical, under a recently amended commercial arrangement. Importantly, the Continuing Group will retain critical research and development capability through employees with experience in hypochlorous acid and product development following Completion. The business of the Continuing Group will shift significantly if the Disposal is completed, resulting in greater cash requirements, overall less diversified business operations, and focus on the biopharmaceutical sector which is inherently riskier than an established supermarket retail sector. The Group will lose its primary source of revenue. The Company will become primarily a development company with limited revenue stream and significant costs. Additionally, a drug development strategy involves inherent risks associated with demonstrating safety and efficacy of compounds, ensuring stable formulations, demonstrating clinical efficacy, achieving regulatory approval and then delivering commercial success. Given the significance of the drug development strategy to the future of the Company following the Disposal, failure to implement a successful research and development strategy could result in an inability to deliver new products and indications, which would have a material detrimental effect on the sustainability of the business. Failure of programmes could result from lack of organisational resource or capability deficiencies, inadequate planning or anticipation of obstacles, poorly designed testing protocols, changes in the regulatory landscape, failure to achieve clinical results or regulatory approvals, or from the formulations not having the clinical benefits or safety profiles that were anticipated. Even if regulatory approvals are obtained, adoption of the Continuing Group's products could prove slow or difficult, depending upon other products or available therapies for the indications. Other drug companies could develop safer or more effective products for the same indications and secure a significant portion of the available market. Macro-economic factors could impact the pricing or payers' willingness to reimburse patients for the Continuing Group's products. There are many uncertainties and variables which could impact the timing and likelihood of the Continuing Group successfully delivering a new drug. Additionally, given the significant investment required, the Continuing Group may not be able to fund on-going development costs without additional financing from one or more sources. The new business strategy in developing drug formulations in targeted therapeutic areas will result in an increased risk associated with the necessary pre-clinical (animal) and clinical (human) studies that need to be conducted. The clinical testing could result in harm to humans for which the Continuing Group could be held responsible. If humans and/or animals were harmed as a consequence of the Continuing Group's actions, it could have a material negative effect on the Continuing Group's financial results and cash flow as well as its reputation and consequently its access to potential financing. The Continuing Group will seek to mitigate these risks with management oversight and liability insurance.
Chemstar Frequently Asked Questions (FAQ)
When was Chemstar founded?
Chemstar was founded in 1981.
Where is Chemstar's headquarters?
Chemstar's headquarters is located at 120 Interstate West Parkway, Lithia Springs.
What is Chemstar's latest funding round?
Chemstar's latest funding round is Acquired.
Who are the investors of Chemstar?
Investors of Chemstar include Ecolab.
Discover the right solution for your team
The CB Insights tech market intelligence platform analyzes millions of data points on vendors, products, partnerships, and patents to help your team find their next technology solution.