NEW YORK, March 5 -- Interleukin Genetics of Waltham, Mass., today announced a strategic alliance with Alticor, of Ada, Mich., the parent company of Amway.
Interleukin, in dire financial straits, will receive equity funding of as much as $16 million in a stock, credit and cash deal. The current Interleukin board of directors, except for Philip Reilly, the company's chief executive officer, tendered their resignations. Alticor will nominate and elect four new directors to the five-member board.
The Interleukin website lists the current board members as: Kenneth Kornman, Edward Blair Jr., Gary Crocker, John Garofalo, and Thomas Moore.
The alliance announced today ties the companies together to produce personalized consumer products, Interleukin said in a statement. Alticor produces nutritional supplements and skin care products.
"Our alliance with Interleukin Genetics will focus on developing nutritional supplements and skin care products that benefit individuals with certain genotypes," George Calvert, Alticor's vice president of R&D, said in a statement.
At the end of January, Interleukin, which produces therapeutics, diagnostics, and nutriceutical products targeting inflammation, announced a third tranche of $500,000 in interim funding in the form of a promissory note issued by Pyxis Innovations, a sister company to Amway, funding that Interleukin said would extend it through February.
The alliance includes an equity investment, a multi-year research and development agreement, licensing agreements with royalties on marketed products, the deferment of outstanding loan repayments and the refinancing of bridge financing obligations, such as the $500,000 promissory note sold to Pyxis, which was pegged to an interest rate of 15 percent annually.
Alticor will purchase 5 million shares of Interleukin Series A preferred stock for $1.40 a share, convertible into 28.1 million shares at a price of $0.25 - which amounts to 50.3 percent of the company's common stock. Upon reaching an undisclosed milestone, Alticor would contribute an additional $2 million. Alticor will also provide Interleukin with $5 million in funding, payable over the next 24 months, for research and development.
Alticor will also provide $1.5 million in working capital credit for Interleukin to initiate research agreements with third parties, pending board approval, as well as a $2.5 million refinancing of notes held previously by Alticor, extending maturity dates and reducing interest rates.
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