Zecotek Photonics Inc(TSXV:ZMS) , a developer of leading-edge photonics technologies for healthcare, industrial and scientific markets, is pleased to announce that the financing for an equity stake for its wholly owned subsidiary, Zecotek Imaging Systems Pte Ltd. (Imaging Systems), as previously announced on October 20, 2016, has been scaled up to $15 million. The Company also announces a concurrent $10 million financing for an equity stake in its wholly owned subsidiary Zecotek Display Systems Pte Ltd. (Display Systems). The increase in the Imaging Systems financing is due to an improved valuation of the wholly owned subsidiary and the growing demand for Zecotek's patented LFS scintillation crystals by the Chinese PET OEM industry. The Display Systems financing is to raise the necessary funds to complete the integration of its patented 3D display monitor for automotive applications. Both divisional financings will be conducted on a best efforts basis.
"Recent events in China's medical scanning markets and the interest in our 3D Display technology for automobile applications have given us a unique opportunity to raise funds at the divisional level to build out two distinct and self-sustaining business units," said Dr. A.F. Zerrouk, Chairman, President, and CEO of Zecotek Photonics Inc. "China is experiencing a renaissance in medical imaging where three factors are converging to create the ideal environment for our imaging technologies: the government is encouraging the development of homegrown medical scanners, local OEMs have acquired the necessary technology and management to develop leading edge medical technology, and new PET medical scanners which require our components, are coming on the market. With respect to our 3D display technology, recent developments with the automotive industry have attracted investment groups interested in a potential strategic equity position in our Display Systems division. We avoid significant dilution to our shareholders by completing the two financings at the higher valued divisional level, and we look forward to creating two businesses which will operate autonomously and will have their own corporate and management structures."
The funds raised for the Imaging Systems division will be used to add crystal growing capacity to its laboratory and crystal cutting facility in Singapore. The Shanghai EBO Crystals Assembly Company is the largest crystal array producer and supplier in China, and has committed to use only Zecotek's LFS scintillation crystals in their crystal arrays for PET medical scanner. As previously announced on January 25, 2017, EBO ordered over USD21 million worth of scintillation crystals to be delivered over the next three years. This exclusive agreement will make Zecotek the main supplier of lutetium silicate based scintillation crystals to EBO. In order to ensure a consistent and high quality supply of crystals, additional crystal growing capacity is necessary. A valuation of the Imaging Systems division was completed by a reputable North American investment bank, which resulted in a value of approximately $80 million.
Expansion of the site in Singapore will be accomplished through the installation of specialized crystal growing ovens. Using the Czochralski method with certain modifications, LFS crystals are grown in these ovens, over a shorter time period. Zecotek's proprietary growing method produces very large-diameter boules with uniform properties and without cracks, a problem plaguing other competing scintillation materials. The result is a large number of high quality elements from each boule thus keeping manufacturing costs to a minimum.
Zecotek has also gained the support of the Singapore Economic Development Bank. The expansion to the facilities in Singapore will receive certain government support of up to 40% of capital and installation costs of new equipment.
The funds raised for the Display Systems division will be used to establish the necessary management, organizational and operational infrastructure to create a stand alone organization, and to produce a scalable 3D display for the automotive industry.
In addition, the Company also announces that the non-brokered private placement previously announced on November 9, 2016, has been increased by $375,000.
Each unit of the non-brokered private placement consists of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of $0.43 per common share at any time on or before the 24-month anniversary of the closing of the offering.
Net proceeds from the funds raised from the non-brokered private placement will be used to complete the transfer of technology for the purpose of immediate commercialization, strengthen and maintain patents of the Company's IP portfolio, and used for purchase order financings and general working capital purposes. Pursuant to the financing, the Company may pay a finder's fee. All shares and warrants are subject to a four-month hold period.
Zecotek Photonics Inc. (TSX VENTURE: ZMS) (FRANKFURT: W1I) is a photonics technology company developing high-performance scintillation crystals, photo detectors, positron emission tomography scanning technologies, 3D auto-stereoscopic displays, 3D metal printing, and lasers for applications in medical, high-tech and industrial sectors. Founded in 2004, Zecotek operates three divisions: Imaging Systems, Optronics Systems and 3D Display Systems with labs located in Canada, Korea, Russia, Singapore and U.S.A. The management team is focused on building shareholder value by commercializing over 50 patented and patent pending novel photonic technologies directly and through strategic alliances, the European Organization for Nuclear Research (Switzerland), Beijing Opto-Electronics Technology Co. Ltd. (China), NuCare Medical Systems (South Korea), the University of Washington (United States), and National NanoFab Center (South Korea). For more information visit www.zecotek.com and follow @zecotek on Twitter.
This press release may contain forward-looking statements that are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what may have been stated.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the content of this news release. If you would like to receive news from Zecotek in the future please visit the corporate website at www.zecotek.com.
For Additional Information Please Contact:
Zecotek Photonics Inc.
T: (604) 783-8291
Source: Marketwired (Canada) (March 14, 2017 - 6:40 AM EDT)
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