RedHawk to Acquire Needle Disintegrator(TM)

RedHawk Holdings Corp. (PINKSHEETS: IDNG) (“RedHawk” or the “Company”) announced today that its wholly-owned medical device subsidiary, RedHawk Medical Products & Services, LLC, has signed a non-binding Letter of Intent (“LOI”) to acquire all of the tangible and intangible property rights for the Disintegrator(TM) Insulin Needle Destruction Unit (“Disintegrator(TM)”), the only needle destruction device approved by the United States Food and Drug Administration (“FDA”). Closing is expected to be completed by December 31, 2015.
The Company also said that concurrent with the closing of the purchase of the Disintegrator(TM), Beechwood Properties, LLC (“Beechwood”) will inject up to $1 million into RedHawk for working capital purposes. Beechwood currently owns beneficially, 37.9% of RedHawk’s outstanding common stock. Mr. G. Darcy Klug, the Company’s Chief Financial Officer and Secretary, owns and controls Beechwood.
The Disintegrator(TM) is a portable, battery operated, insulin-needle destruction device for use at home primarily by diabetics. The device is intended for the destruction and environmentally friendly disposal of 27-30 guage insulin hypodermic needles that are 5/16 to 1/2 inch in length. It can be used with most insulin pens with disposable insulin syringes from 1/3 to 1 cubic centimeter in volume. The Disintegrator(TM) is used by diabetics for the safe and environmentally friendly disposal of needles following their use and is an effective alternative to hazardous waste needle disposal utilizing sharps containers.
The acquired assets will include, but will not be limited to, all matters subject to the Disintegrator(TM) original patent applications, including technical designs, drawings, trademarks, tradenames, FDA documents, clinical test data, and all manufacturing tooling and fixtures. The Company said it will also employ the product’s inventor in order to enhance the product’s original design, performance and use. The Company said the new design will broaden the product’s capabilities beyond home use by diabetics and will then include the use in commercial applications such as hospitals, clinics and non-acute healthcare facilities.
The Company expects to launch its Disintegrator(TM) marketing campaign in Europe and the Middle East starting in 2016 and will initially focus on the diabetic industry. RedHawk said it will utilize the marketing team from EcoGen – Europe in executing its marketing strategy where, in the United Kingdom alone, 700 people per day are diagnosed with diabetes. Since 1996, the number of diabetics in the United Kingdom has more than doubled from 1.4 million to 3.9 million. It is estimated that one in sixteen people in the United Kingdom have either diagnosed or undiagnosed diabetes. Approximately £10 billion annually, or 10% of the country’s healthcare budget, is spent on diabetes related costs. In addition, in the United Kingdom alone, over 100,000 needle stick injuries occur each year to healthcare workers resulting in an annual cost burden of over £300 million.
RedHawk will issue 60 million restricted shares of its common stock to acquire the Disintegrator(TM) tangible and intangible assets. The restricted shares will vest pursuant to certain agreed upon performance milestones including, but not limited to, the Company’s acceptance of new product design and engineering, manufacturing processes, defined gross profit margins, the issuance of final world-wide patent protection and agreed upon sales volumes.
Announcing the acquisition of the Disintegrator(TM), Daniel J. Schreiber, RedHawk’s Chief Executive Officer, said “The healthcare industry generates hundreds of millions of tons of hazardous waste each year with used needles, some of which find their way into landfills worldwide. The Disintegrator(TM) can save the healthcare industry many millions of dollars annually with this environmentally friendly method for disposing used needles, a hazardous waste product, while establishing a safer workplace for millions of healthcare workers.”
Schreiber continued, “Needle disposal and needlestick concerns are not isolated to the United Kingdom. OSHA estimates 5.6 million healthcare industry workers in the United States are at risk of occupational exposure to bloodborne pathogens via needlestick injuries. Each year 385,000 needlestick injuries and other sharps-related injuries are sustained by U.S. hospital based healthcare personnel. This equates to an average of around 1,000 sharps injuries per day in U.S. hospitals. Including other non-acute healthcare facilities, it is estimated that 600,000 healthcare personnel incur a needlestick injury each year in the U.S. 40% of injuries occur after use and before disposal of sharp devices, 41% of injuries occur during the use of sharp devices on patients, and 15% of injuries occur during or after disposal. Virtually all healthcare personnel worldwide are at risk of harm from occupational exposures such as needlestick injuries. While nurses sustain approximately half of all needlestick injuries, physicians, housekeeping and maintenance staff, technicians and administrators are also harmed. According to the American Hospital Association, one case of serious infection by bloodborne pathogens can soon add up to $1 million or more in expenditures for testing, follow-up, and disability payments. Costs that are harder to quantify include the emotional cost associated with fear and anxiety from worrying about the possible consequences of an exposure, direct and indirect costs associated with drug toxicities and lost time from work.”
Closing of the acquisition of the Disintegrator(TM) intellectual properties and related tangible assets is contingent upon, among other things, approval by RedHawk’s board of directors, negotiations and acceptance by both parties of a definitive purchase agreement, and the satisfactory completion of legal and financial due diligence.
This release may contain forward-looking statements. Forward-looking statements are all statements other than statements of historical fact. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. The words “anticipate,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be,” “potential” and any similar expressions are intended to identify those assertions as forward-looking statements.
Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties. In evaluating forward-looking statements, you should consider the various factors which may cause actual results to differ materially from any forward-looking statements including those listed in the “Risk Factors” section of our latest 10-K report. Further, the Company may make changes to its business plans that could or will affect its results. Investors are cautioned that the Company will undertake no obligation to update any forward-looking statements.
Media Contact:
Julie Calzone
(337) 235-2924
[email protected]
Company Contacts:
Daniel J. Schreiber, CEO
(858) 509-8800
[email protected]
G. Darcy Klug, CFO
(337) 269-5933
[email protected]
SOURCE: RedHawk Holdings Corp.