- Initial US $500,000 Equity Draw Down to Commence Immediately
-
TORONTO, Nov. 9, 2017 /CNW/ - GeneNews Limited (TSX:GEN)
("GeneNews" or the "Company") announced today that it has concluded
the Milost Equity Subscription Agreement (MESA) with Milost Global
Inc. ("Milost" or the Purchaser") pursuant to which Milost will
invest up to US $10 million in
GeneNews. The initial Equity Draw Down of US $500,000 will be completed immediately.
The Common Share purchase will be priced at a 50% premium to the
20-day volume weighted average price of the common shares of
GeneNews on the Toronto Stock Exchange ("TSX") on the date of the
draw down notice.
The Equity Draw Down is expected to be completed within 10
business days of the draw down notice execution date, subject to
receipt of all necessary regulatory approvals. This initial US
$500,000 tranche is strategically
designed to fuel the Company's momentum while minimizing
dilution. This will be followed with successive tranches as
needed.
"We are very pleased to have Milost Global Inc., a US
$25 billion fund, in our corner as we
enter a period of significant growth," commented GeneNews' Chairman
and CEO, James R Howard-Tripp. "We are now 18 months post
acquisition of Innovative Diagnostic Laboratory (IDL) and corporate
restructuring. We are also gaining acceptance of our suite of early
cancer diagnostics by large healthcare systems through our
partnership with JTS Health and have multiple contracts nearing
signature. In addition, we continue to see growth among small,
independent practices, and among patients who want greater control
over healthcare decisions. This includes patients who are actively
seeking advanced molecular testing through new avenues, including
telemedicine.
Mandla J. Gwadiso, Managing Partner & CEO of Milost Global
Inc, stated, "We are excited by the opportunity to partner with Jim
on his trajectory towards making GeneNews cash generative in the
short-term. More importantly, we want to hold his hand as he
continues to build GeneNews to become a big player in the biotech
space. This is our very first transaction on the TSX and we are
thrilled that GeneNews has become our very foundation to our entry
into the Canadian market."
Milost Global Inc, Senior Partner & COO, Bernard B. Yaw, stated "We are convinced that
the Company is on the right path to market acceptance and
penetration in the early cancer diagnostic space and the Company is
at a point of inflection towards profitability. Investing in this
space involves lots of patience and Milost Global is a long-term
investor. An investment in GeneNews augurs well into our investment
mix and portfolio balance. We are proud to invest in this hidden
gem in GeneNews. It has been a pleasure working with Mr.
James Howard-Tripp and we thank him
and the Board for the opportunity."
The initial equity Draw Down forms part of an equity and debt
subscription agreement (the "MESA") entered into by GeneNews and
Milost for up to US $10 million in
total proceeds. The MESA includes up to US $4 million in Common Shares in GeneNews to be
drawn down ("Equity Draw Down"), at the Company's option, in
maximum installments of US $1
million, and up to US $6
million in unsecured convertible notes in tranches not to
exceed US $3 million.
Proceeds drawn down from the MESA will be used for working
capital and corporate growth purposes, including the continued
execution of the Company's growth strategy for its Virginia-based Innovative Diagnostic
Laboratory ("IDL") clinical reference lab business.
Should the market price of the Common Shares not be at or above
the Purchase Price on or before 180 business days from the date of
any Note or Equity Draw Down, then the Company will recognize to
the Purchaser, as its sole remedy, a discount of 20% against the
Purchase Price plus at the 180 business day mark, the variance
between the Purchase Price and the market price, to be paid by the
Company in Common Shares, provided however, that in no event shall
such combined discount exceed a 25% discount from the market price
at draw down, assuming market price at draw down is less than
Canadian $0.50; if the market price
at draw down is C$0.51-2.00, the
maximum discount is 20%, and if market price at draw down is
greater than C$2.00, the maximum
discount is 15%.
In connection with the transaction, GeneNews has agreed to pay a
commitment fee of four percent (4%) of the total Equity Component,
in common shares, as half upon draw of the first tranche, and half
upon draw of the second tranche, and three percent (3%) of the
total Note Component, to be paid in cash upon the first draw.
The MESA, including the Initial Draw Down and each draw down
under it, are subject to the approval of the TSX.
About GeneNews
GeneNews, an innovator in the liquid biopsy space, is committed
to becoming a leader in advanced diagnostics and personalized
medicine, serving as a strong commercialization outlet for early
detection of cancer and other chronic diseases. Our mission is to
identify, assess and make commercially available a comprehensive
menu of diagnostics that provide physicians and patients with
personalized clinical intelligence and actionable information to
improve health outcomes through the early diagnosis of disease. Our
Richmond, Virginia-based
Innovative Diagnostic Laboratory clinical reference lab specializes
in traditional and advanced clinical evidence-based blood testing
that helps find, understand, and address cancer risk in patient
populations. Currently, Innovative Diagnostic Laboratory ("IDL")
offers risk assessment blood tests for four prevalent cancer types
- colon, lung, prostate and breast. GeneNews' common shares trade
on the Toronto Stock Exchange under the symbol 'GEN'. More
information on GeneNews and IDL can be found at www.GeneNews.com
and www.myinnovativelab.com, respectively.
About MILOST GLOBAL, INC.
Milost Global, Inc. is an American Private Equity firm that is
headquartered in New York City.
With more than $25 billion in
committed capital, Milost is at the intersection of creative
investing and value creation. Milost is also a provider of
alternative capital, mezzanine finance and alternative lending to a
broad range of industries across the globe including Technology,
Transport, Cannabis, Education, Distribution, Mining, Oil &
Gas, Financial Services, Healthcare, Pharmaceuticals, Real Estate,
Alternative Energy and Infrastructure
Development. http://www.milostglobal.com/
Forward-Looking Statements
This press release contains forward-looking statements
identified by words such as "expects", "will" and similar
expressions, which reflect the Company's current expectations
regarding future events, including with respect to obtaining
regulatory approval and execution of a definitive subscription
agreement. The forward-looking statements involve risks and
uncertainties that could cause the Company's actual events to
differ materially from those projected herein. Investors should
consult the Company's ongoing quarterly filings and annual reports
for additional information on risks and uncertainties relating to
these forward-looking statements. The reader is cautioned not to
rely on these forward-looking statements. The Company disclaims any
obligation to update these forward-looking statements, except as
required by law.
SOURCE GeneNews Limited