Med BioGene Reports Financial Results for Q2 2014 - Seite 2

Liquidity and Capital Resources

At June 30, 2014, MBI had cash and equivalents totalling $83,102 and a working capital deficiency of $18,316, compared to cash and equivalents of $181,507 and working capital of $112,624 at December 31, 2013.

Cash used in operating activities was $97,967 for the period ended June 30, 2014 compared to cash used in operating activities of $182,779 for the period ended June 30, 2013.

On August 12, 2014, the Company announced that it has received signed subscription agreements and funds for a non-brokered private placement of $200,000 of units. Each unit will be issued at a price of $0.05 and will consist of one common share and one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to purchase one common share at a price of $0.10 for a period of 24 months. The securities issued pursuant to the private placement will be subject to a four-month hold period from the date of closing. As a finder's fee, the Company may issue compensation options to acquire the Company's common shares equal to 10% of the units sold pursuant to the private placement. The closing of the private placement is conditional upon, among other things: (a) receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange, and (b) at least three of the four persons, including the Executive Chairman of the Company, nominated by management for re-election to the board of directors of the Company at the at the upcoming annual and special meeting of shareholders to be held on September 5, 2014 (the "Meeting"), being elected as directors of the Company at the Meeting (this condition being required by the key subscribers to the proposed financing). It is important to note that there can be no assurances that the financing will close. The subscription funds are being held by the Company in trust and if the conditions to closing of the private placement, including re-election of a majority of the board of directors, are not met the subscription proceeds will be returned to the subscribers pursuant to the terms of the subscription agreements.

Since March 2014, as a result of MBI's cash position, management and directors of MBI have voluntarily elected to defer their cash compensation (not including reimbursement of expenses in the ordinary course) to provide an extended runway for the company pending the anticipated payment by Precision of the first milestone payment under the commercialization agreement. The cash compensation owing but not paid to management and directors is being accrued and is due and payable upon demand. The debt amount owing to management and directors as of June 30, 2014 was $50,500 and continues to accrue.