Cytos Biotechnology AG

DGAP-Adhoc: Cytos Biotechnology Ltd updates on a key transaction and plans going forward

EQS Group-Ad-hoc: Cytos Biotechnology AG / Key word(s): Financing
Cytos Biotechnology Ltd updates on a key transaction and plans going

06.01.2015 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.


Cytos Biotechnology Ltd updates on a key transaction and plans going
forward - successful bondholders' meeting key to avoid liquidation and
ensure going concern

  - Repayment of subordinated convertible bonds at maturity impossible -
    total loss for bondholders highly likely unless bonds are converted
    into equity

  - Going concern of Cytos subject to successful bondholders' meeting
    agreeing to convert all subordinated convertible bonds into equity at
    market prices

  - Proposed conversion of subordinated convertible bonds into equity
    allows the bondholders to participate in any equity upside

  - Licensing transaction - subject to going concern - provides upside
    potential to shareholders

Schlieren (Zurich), Switzerland, January 6, 2015 - Cytos Biotechnology Ltd.
(SIX:CYTN) ("Cytos" or the "Company") announced today that it proposes a
mandatory conversion of the outstanding subordinated convertible bonds and
convenes a bondholders' meeting on January 26, 2015 in
Schlieren/Switzerland. Furthermore, Cytos announced the signing of a
transaction in conjunction with its efforts to monetize on its asset base.

Key considerations of the subordinated convertible bond restructuring:

  - According to the present financial forecast, holders of subordinated
    convertible bonds cannot expect any payment at maturity as cash in
    February 2015 is estimated to be max. CHF 16 million whereas the
    repayment obligation to loan note holders - which are senior to those
    of the bondholders - amounts to CHF 22.2 million. Hence, even loan note
    holders will not receive full repayment of their loans and therefore,
    holders of subordinated convertible bonds cannot expect any payment.

  - Access to new financial means for a small biotech company without
    sustainable revenues remains very challenging in the current financial
    market environment.

  - With the planned conversion of its subordinated convertible bonds into
    equity, Cytos remains a going concern and liquidation can be avoided.
    In addition, the licensing transaction as mentioned below will take

Key elements of the proposed subordinated convertible bond restructuring:

  - More than 30-fold reduction of the conversion price from CHF 7.71 to
    CHF 0.25 per share which is about the current market share price.

  - Each outstanding subordinated convertible bond of nominal CHF 2,500 is
    mandatorily converted into 10'000 Cytos shares of nominal CHF 0.10.

  - An incentive payment of CHF 25.00 per subordinated convertible bond is
    paid in case the bond restructuring becomes valid and binding. The
    incentive payment is subject to 35% withholding tax.

  - Two thirds of all outstanding subordinated convertible bonds need to
    support the bond restructuring.

  - Maximum 77'490'000 shares to be issued for bond conversion. Such
    issuance is subject to shareholder approval in an extraordinary
    shareholders meeting to be held.

The conversion of the CHF 19'372'500 subordinated convertible bonds
maturing on February 20, 2015 into Cytos shares is essential for Cytos to
remain a going concern. In order to approve the conversion, a bondholders'
meeting is scheduled to take place on January 26, 2015 in Schlieren/Zurich,

The notice to the bondholders as well as the detailed content of the
conversion of the outstanding subordinated convertible bonds can be
downloaded at The invitation to the
bondholders' meeting will be mailed within the next few days.

The terms for the conversion of the subordinated convertible bonds have
been carefully considered and represent, in the view of the Board of
Directors and the management, a fair and reasonable proposal which serves
to avoid liquidation and ensure that Cytos remains a going concern.

The Board of Directors and the management unanimously support approving the
conversion, which is in the best interest of bondholders, shareholders, and
other stakeholders, and will do their utmost to realize a solution that
enables Cytos to deliver shareholder value - for example by means of a
reverse merger in which Cytos would purchase another company with intact
operations and products.

In addition, Cytos announced today that it has executed an agreement
granting OnCore Biopharma, Inc. ("OnCore") an exclusive license to Cytos'
clinically validated virus like particle (VLP) platform to develop and
commercialize products for the treatment and prevention of hepatitis B
viral infections. Cytos also granted OnCore an option to extend the license
to additional viral diseases other than influenza.

For the first product in each of six possible product categories in the
field of hepatitis B that may be developed under the agreement, Cytos may
receive up to USD 67 million in development milestones, or a maximum of USD
402 million if one product in each product category is developed. In
addition, Cytos is eligible to receive commercial milestone payments of up
to USD 120 million upon achievement of certain sales levels, and up to
double-digit royalties on net sales from any successfully developed

The agreement will become effective with the achievement of certain closing
conditions, including a successful conversion of the subordinated
convertible bonds into equity.

For further information, please contact:

Cytos Biotechnology Ltd
Harry Welten, MBA
Chief Financial Officer
Tel: +41 44 733 46 46

About Cytos Biotechnology Ltd

Cytos is a public biopharmaceutical company located in Schlieren (Zurich),
Switzerland. The Company is listed according to the Main Standard on the
SIX Swiss Exchange Ltd under the symbol CYTN.

Forward Looking Statements
This media release contains certain forward-looking statements that involve
risks and uncertainties that could cause actual results to be materially
different from historical results or from any future results expressed or
implied by such forward-looking statements. You are urged to consider
statements that include the words "will" or "expect" or the negative of
those words or other similar words to be uncertain and forward-looking.
Factors that may cause actual results to differ materially from any future
results expressed or implied by any forward-looking statements include
scientific, business, economic and financial factors, Against the
background of these uncertainties, readers should not rely on
forward-looking statements. The Company assumes no responsibility for
updating forward-looking statements or adapting them to future events or

End of ad hoc announcement

Additional features:

Document title: Cytos_Press_E_150106_Bondholder


06.01.2015 News transmitted by EQS Schweiz AG. - news

The issuer is responsible for the contents of the release.


Language:    English
Company:     Cytos Biotechnology AG
             Wagistr. 25
             8952 Schlieren
Phone:       +41 44 733 4747
Fax:         +41 44 733 4740
ISIN:        CH0011025217, CH0029060735
Valor:       -
Listed:      Freiverkehr in Berlin, München, Stuttgart; Frankfurt in
             Open Market ; SIX

End of News    EQS Group News-Service
310107 06.01.2015

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