Vivione Biosciences Inc. Operational Update

CALGARY, ALBERTA--(Marketwired - Aug. 10, 2015) - Vivione Biosciences Inc. ("Vivione" or the "Corporation") (TSX VENTURE:VBI) wishes to provide an operations update. In connection with the diminished shareholder value that has occurred over the past six months and as a consequence of the anticipated difficulties in servicing the liabilities of the Corporation as they become due, the Corporation will be reviewing alternative financing solutions that would enable it to meet its financial obligations and fund the continued development of its products.

Vivione has undergone numerous financial and strategic setbacks over the past 12 months, the cumulative effect of which has contributed to its current depressed share price and financial situation. The value of the Class A common shares of the Corporation has fallen from $0.23 to $0.07 over the past 6 months, representing a decrease in value of approximately 70%. The events that have contributed to the drop in share price and the events that have added to the difficulties the Corporation has experienced in its attempts to obtain additional funding are summarized below.

Financing Setbacks

As of early September, 2014, Vivione has been engaged in an aggressive and ultimately unsuccessful financing program that was designed to provide ample working capital for the Corporation and capital to assist the Corporation in pursing strategic acquisitions. Over the course of the past 11 months Vivione pursued numerous financing alternatives, described below.

1. Vivione engaged three financial advisory firms, being Ardour Capital Investments, LLC, Paley Advisors, LLC and Young America Capital, LLC, to provide financial advisory and financing strategies. None of these engagements resulted in any successful financings.
2. As a consequence of these engagements, and as a result of its separate initiatives, the Corporation sent information to, met with and/or discussed potential financing alternatives with over 200 private equity firms, venture capital firms, family offices and potential strategic partners, all without success.
3. Vivione negotiated Term Sheets with two potential investors. The proposed financings ultimately failed as the proposed investors were unable to obtain or secure the necessary funding on their parts to advance to a definitive transaction.
4. On May 4, 2015 Vivione initiated a TSX Venture Exchange approved 30 day price amendment to the exercise price of the 12,000,000 common share purchase warrants (the "Warrants") issued to subscribers as part of the Corporation's prospectus financing which closed on April 19, 2013. The exercise price was reduced from CDN$0.35 to CDN$0.155 for a 30 day period ("Price Amendment"), running from May 5 to June 4, 2015 (the "Price Reduction Period") in an attempt to raise up to CDN$1,860,000 in gross proceeds. The objective of the Price Amendment was to provide the Corporation with a much needed infusion of capital while simultaneously providing shareholders with an opportunity to exercise their Warrants at a substantial discount. Upon expiry of the Price Reduction Period, only 295,000 of the potential 12,000,000 Warrants were exercised, providing the Corporation with only CDN$45,725 in proceeds.

Current Business Climate

Vivione has promoted and entered into numerous business relationships/partnerships that were anticipated to result with the development and increased sale of the Corporation's products. These business ventures have failed to generate appreciable revenue as intended.

1. Considerable time and expense was devoted to the proposed acquisition of all the capital stock of Trillium Diagnostics, which was announced January 28, 2015. Due to numerous setbacks and financial constraints, including the inability of the Corporation to secure the requisite financing, the Corporation was unable to complete the proposed acquisition, issuing a press release confirming the termination of the deal on May 12, 2015.
2. Vivione announced on February 17, 2015 that it had entered into a preferred vendor relationship with Ely and Associates to provide microbiology testing and equipment. Contrary to Vivione's expectations, the preferred vendor relationship failed to expand the opportunity for Vivione's RAPID-B bacterial testing platform and service in the oil and gas sector and has not resulted in any sales at this point.
3. As a result of the substantial reduction in the price of oil and the resulting downturn in the oil and gas market in Canada and USA over the past several months, numerous potential oil and gas clients for Vivione's products and testing services have reduced head count and capital budgets. As a consequence, adoption of the Corporation's technology for identification and quantification of SRBs and APBs in wells and fields has been stymied, and realized and projected sales of Vivione's oil and gas product line have not materialized.

Contributions and Sacrifices

Vivione's ability to address the economic and financial setbacks that have been encountered over the past 12 months is in large part due to the contributions of a certain director and shareholder of the Corporation and the sacrifices of employees and consultants of the Corporation.

1. Effective as of March 31, 2015, Glenn Smith, a director of Vivione, amended the termination date of the September 12, 2013 CDN$1,000,000 revolving line of credit facility he had previously entered into with the Corporation (the "Facility"), as Vivione would have been unable to repay the principal amount outstanding upon its original termination date. While the termination date has been extended for an additional two years, as a result of working capital shortages Vivione is at risk of defaulting under the Facility as it may be unable to service the monthly interest payments.
2. To assist Vivione in meeting its working capital requirements, Glenn Smith provided the Corporation with a revolving line of credit facility up to US$220,000 for a one year term. A press release describing the US$220,000 facility was disseminated on April 28, 2015.
3. To further assist Vivione in meeting its working capital requirements, Glenn Smith agreed to provide the Corporation with an additional revolving line of credit facility of up to US$200,000 for a one year term. A press release describing the US$200,000 facility was disseminated on August 5, 2015.
4. As of January, 2015, over 80% of employees and consultants of the Corporation agreed to defer payment of fees and/or all or a portion of the salaries that they are entitled to (the "Deferral"). The Deferral has reduced the general and administrative expense of the Corporation by 80% and conserved cash reserves, but has increased the liabilities disclosed on Vivione's financial statements and has resulted in a reduction of employees and consultants utilized by the Corporation as many individuals have been forced to find alternative sources of income. The obligation to repay the Deferral is presently in excess of US$500,000 and additional sums continue to accrue.

Vivione has experienced significant financial hardships which are in part attributable to the financing setbacks and current business climate issues discussed above. Contributions have been made by a certain director of the Corporation and significant sacrifices made by employees and contractors, however, there can be no assurance that the Corporation can continue to obtain contributions form directors, officers or employees to continue operations going forward.

About Vivione

Vivione's business is centered on the commercialization of the RAPID-B technology, which is an integrated system of hardware, software and chemical reagents that tests bacteria in key environments. This technology could have potentially diverse applicability from food safety to clinical diagnostics, by identifying and quantifying microorganism levels more rapidly and with greater precision than currently employed techniques.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws. Although Vivione believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based on factors and assumptions concerning future events that may prove to be inaccurate. These factors and assumptions are based upon currently available information to Vivione. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include the ability of the Corporation to pays its liabilities as they become due. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release and, except as required by applicable law, Vivione does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. Vivione undertakes no obligation to comment on expectations or statements made by third-parties in respect of Vivione, or its financial or operating results or (as applicable), their securities.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.