GeneNews arranges up to $10-million financing with Milost

GeneNews (TSX:GEN) has signed a binding commitment letter with Milost Global, which will initially purchase up to $3-million in unsecured convertible notes from GeneNews, as part of an equity and debt subscription agreement of up to $10-million.

The agreement includes the initial draw down of five-year, 5% notes; an investment from Milost of up to an additional $3-million in unsecured convertible notes to be drawn down at the company's option; and up to $4-million in common shares in GeneNews to be drawn down, also at the company's option, in maximum installments of $1-million.

The initial draw down is expected to be completed within the next 20 business days.

Proceeds 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.

In a statement, GeneNews chairman & CEO, James Howard-Tripp, said the accord was carefully structured to maximize GeneNews' capital resources and limit dilution as much as possible.

He said the financing puts GeneNews on a more solid financial footing to aggressively build out the IDL business via expanded marketing programs.