GeneNews (TSX:GEN) has executed a definitive financing agreement with Alumina Partners for a second tranche of a non-brokered private placement.
Under the accord, GeneNews will draw down on $10-million in structured, unsecured convertible notes, at the company’s option, in installments of $200,000 over a 24-month period. The initial draw will be limited to $200,000 within the first 120 days. The 12% notes will have a term of one year.
Beginning 120 days after issue of each note, the noteholder may convert all or part of the note into GeneNews common shares at a conversion price equal to a 25% discount to the five-day volume-weighted average price on the date of conversion. The conversion will become mandatory under certain conditions.
GeneNews also announced that it has elected not to continue negotiations for the issuance of up to a $2-million senior secured, collateralized convertible debenture as part of the offering. The aggregate number of common shares issued in the offering will not exceed 50 million.
“These financings have been structured to maximize GeneNews’ capital resources while, at the same time, limit dilution as much as possible,” James Howard-Tripp, executive chairman of GeneNews, said in a statement.
“We are very pleased with the strong level of support we have received from both new and existing investors, and remain committed to making good use of their proceeds to advance GeneNews’ leadership position in advanced cancer diagnostics and personalized medicine,” he added. “To this end, the new partnership with JTS is gaining momentum and is anticipated to bear fruit over the coming months.”