Under the terms of the non-binding letter of intent (LOI), San West would acquire 85% of the outstanding common stock of Human BioSystems, pursuant to the contemplated merger exchange agreement. Following the closing of the anticipated merger, San West would emerge as the surviving company with a name and symbol change to follow.
In addition, Human BioSystems shareholders would retain approximately 15% of the new company’s outstanding shares upon completion of the anticipated merger. The merger is subject to a number of conditions, including the signing of a definitive merger agreement by March 1, 2009, the completion of financing arrangements between the two parties, and positive final due diligence results reported on behalf of both parties.
Harry Masuda, CEO of Human BioSystems, said: I believe that a merger with San West USA is the best option for our company given the current financial situation of Human BioSystems and the general negative economic climate for raising capital for a development stage company such as ours.
If a definitive merger agreement is signed, the ongoing products will be that of San West and the current business of Human BioSystems will be suspended and other options will be considered for its business.