The deal, announced in October, called for Arden Hills, Minn.- and Yokneam, Israel-based Galil to pay $1 per share plus 2¢ per warrant for Perseon, formerly known as BSD Medical. Shareholders had tendered roughly 5.9% of Perseon’s stock and no warrants as of the close of business Dec. 1, Galil said at the time. The company extended the deal’s deadline by 10 days in a bid to meet the minimum tender requirement, but as of 11:59 p.m. Dec. 21 the offer expired without meeting that bar.
“Accordingly, the merger will not be pursued at this time,” Perseon said in a regulatory filing. “Consequently, the holders of common stock and public warrants will remain as shareholders and warrant holders, respectively, of the company and the company will continue to operate under its current structure.”
That’s very bad news for investors in the Salt Lake City-based company, which reported 3rd-quarter losses of -$3.0 million on sales of $556,000. Perseon president & CEO Clint Carnell said this month that the $1.3 million on hand as of Nov. 30 is enough to carry it for only 2 months.
“If this transaction is not completed, we will not have sufficient liquidity to sustain operations and the most likely outcome would be a bankruptcy filing. In such a scenario, Perseon’s shareholders and warrantholders would likely receive no value for their ownership position. Aside from the tender offer from Galil, there are currently no other viable financing options or transaction opportunities available to us. The transaction with Galil provides the best opportunity for Perseon to continue operations and pursue our mission to fight cancer, humanity’s worst disease, and Perseon’s board has determined that such transaction is in the best interest of Perseon and its shareholders,” Carnell said. “We urge all holders of Perseon shares and publicly traded warrants to accept the tender offer, realize cash value for your investment, and enable our important work to continue.”