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Alliqua BioMedical, Inc. to Acquire Soluble Systems, LLC

06 Oct 16

Alliqua BioMedical, Inc.(“Alliqua” or the “Company”), a regenerative technologies company committed to restoring tissue and rebuilding lives, today announced that the Company has signed a definitive agreement to acquire the business of Soluble Systems, LLC (“Soluble”) through a series of transactions. As part of the transactions, Soluble will contribute and transfer substantially all of its assets into a newly formed subsidiary of Alliqua (“New Alliqua”) and Alliqua will complete a holding company reorganization resulting in New Alliqua becoming the new public parent of Alliqua. New Alliqua will remain publicly traded and change its name to “Alliqua BioMedical, Inc.”

Under the terms of the agreement, Soluble will receive consideration with a total value of approximately $35 million, plus warrants to purchase 4 million shares of New Alliqua common stock at an exercise price of $1.07. The transaction consideration consists of the issuance of approximately 17.6 million shares of Alliqua common stock, valued at $0.89 per share, the assumption of $12.4 million of senior debt, the cash payment due at closing of $5.4 million to retire Soluble’s subordinated debt, $1 million of cash payments by Alliqua to Soluble prior to closing, and $500,000 of other consideration. In addition, Soluble will have the right to appoint one new director to the Company’s board of directors. The transaction is expected to close in the first quarter of 2017 and is subject to certain closing conditions that are described below.

Soluble is a privately held company with 60 employees, formed in 1999 and headquartered in Newport News, Virginia. Soluble markets and distributes a human skin allograft with living cells under the brand name, TheraSkin®. Soluble employs a direct distribution model supported by approximately 40 selling resources that primarily target hospital and wound care customers in outpatient facilities, and generated end-user revenue at an annual run-rate in excess of $18 million during the six months ended June 30, 2016.

“We could not be more excited to announce this transaction, as we believe the combination of Alliqua BioMedical and Soluble Systems will enhance our competitive position with a world-class portfolio of regenerative solutions,” said David Johnson, Chief Executive Officer of Alliqua BioMedical. “I believe this transaction offers the opportunity to combine two strong regenerative technologies companies where the sum of their parts should be greater than the parts themselves.”

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