NEW YORK (GenomeWeb News) – Nanogen today said that it would file for Chapter 11 bankruptcy and sell substantially all of its assets to Elitech for $25.7 million.
Nanogen said that the filing does not affect the operations of Nanogen Advanced Diagnostics, its affiliate based in Milan, Italy. Although that affiliate is not part of the filing, Nanogen said that Elitech would acquire ownership of NAD as well.
"The sale is subject to customary closing conditions, approval of the Bankruptcy Court and the auction process in which the Company will seek competing bids to achieve the highest price possible for the assets," Nanogen said in a statement.
Nanogen and Elitech had initially planned to merge last year in a deal that was valued at around $98.5 million at the time. However, that deal was called off in January after certain closing conditions could not be met.
Since then, cash-strapped Nanogen was de-listed by Nasdaq. The firm said today that it was "unable to secure sufficient working capital or alternative corporate transactions to enable the company to service its debt obligations and fund its operations."
Nanogen also cautioned that it "will not have sufficient proceeds to permit distributions of cash or other property to its holders of common stock unless the company succeeds in selling its assets for an amount significantly in excess of the amount contemplated by the asset purchase agreement with Elitech."