Zecotek Photonics Inc. (TSX VENTURE:ZMS)(FRANKFURT:W1I), a developer of leading-edge photonics technologies for medical, industrial and scientific markets, today announced it has received grant payments from the Malaysian Industrial Development Authority and the Singapore Economic Development Board (EDB). The Malaysian Industrial Development Authority (MIDA) incentive grants come as a product of Zecotek's relationship, established in 2007, with the Malaysian Institute for Micro-electronics Systems (MIMOS) to complete the development of the manufacturing process of Zecotek's new-generation MAPD solid-state photo detectors.
"We are pleased to receive such recognition and endorsement from the Malaysian Industrial Development Authority for our technology and its market potential," said Dr. A.F. Zerrouk, Chairman, President, and CEO of Zecotek. "We have been working closely with the Malaysian Institute for Micro-electronics Systems (MIMOS) for some time and we are happy with the levels of cooperation and flexibility they have shown in meeting our MAPD detector development requirements. We look forward to the continuing support from the Governments of Malaysia and Singapore as we strengthen our capabilities in the region."
MIDA offer grants and incentives to companies establishing technology development and manufacturing capabilities in the country. Zecotek has worked closely with MIDA and will receive matching grants for research and development and staff training, full tax exemption on statutory income for a period of ten years, and withholding tax exemption for royalties and licenses to non-residents and expatriate posts as required. MIDA requires specific levels of capital investment and production work to be carried out within Malaysia and that the terms of the agreement remain confidential. MIDA's continued support will assist Zecotek in expanding its imaging program within Malaysia and provides the Company with an economic advantage as Zecotek establishes a leadership position in new solid-state photo-detector technologies.
Zecotek also received another grant payment under the previously announced Government of Singapore Economic Development Board's (EDB) Research Incentive Scheme for Companies. This third payment covers a portion of Zecotek's operational expenses in research and development and under the terms of the agreement, grant details remain confidential.
Zecotek has also announced the closing of the previously announced non-brokered private placement consisting of 1,003,333 units of the Company at a price of $0.60 per unit for gross proceeds of $602,000.
Each unit consists of one common share and one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at an exercise price of $0.70 per common share at any time on or before the 18-months anniversary of the closing of the offering. The Warrant's exercise period will automatically accelerate if the common shares of the Company trade above $1.00 for a period of 10 consecutive trading days.
Net proceeds from the funds raised will be used for general working capital purposes including finalizing the commercial production of Zecotek's MAPD solid-state photo detectors, fiber and solid-state lasers, and high performance RFO vanadate laser crystals. The Company continues to work closely with joint venture partners including Fujikura Ltd., the Malaysian Institute of Microelectronic Systems, and U.S. and European based laser manufacturers. In light of current economic conditions, the Company has moved to reduce operating costs through the reduction of certain personnel and salaries.
Pursuant to the financing, the Company paid a finder's fee equal to 7% of the gross proceeds of the sale of the Shares and issued non-transferable finder's warrants to purchase common shares equal in number to 6% of the units sold under the private placement. Each finder's warrant entitles the holder to purchase one Share at $0.70 for a period of 18 months after the date the private placement closes. All shares and finders' warrants will be subject to a four-month hold period expiring on May 13, 2009.