TORONTO, Dec. 7, 2012 (GLOBE NEWSWIRE) --
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
GeneNews Limited (TSX:GEN) ("GeneNews" or the "Company"), a molecular diagnostics company focused on developing blood-based biomarker tests for the early detection of diseases and personalized health management, today announced that it is proposing to complete a private placement (the "Private Placement") of up to 66,666,666 common shares from treasury at a price of $0.09 per share for total gross proceeds to the Company of up to $6,000,000. GeneNews will use the proceeds to accelerate commercialization of the ColonSentry® test in the United States, development and validation of pipeline products, and general working capital purposes.
Subsequent to the closing of the Private Placement, the board of directors intends to implement the six for one (6:1) consolidation of its common shares (the "Share Consolidation") previously approved by the shareholders of GeneNews on April 26, 2012. It is also the Company's intention to implement the listing of its common shares on the OTCQX International in the first quarter of 2013, subject to U.S. regulatory approval.
The closing of the Private Placement is anticipated to occur on or about December 14, 2012 or as soon as is practicable after that date. It is intended that the Share Consolidation will occur on or about December 18, 2012 and that the Company's common shares will commence trading on the Toronto Stock Exchange (the "TSX") on a consolidated basis on or about December 20, 2012.
The aggregate number of common shares to be issued pursuant to the Private Placement represents approximately 57% of the 116,122,645 currently issued and outstanding common shares of the Company on a non-diluted basis.
Certain insiders of the Company have indicated their support for the Private Placement and the company expects these insiders to acquire shares under the Private Placement. Any such participation would be a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") but will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transaction nor the consideration paid will exceed 25% of the Company's market capitalization.
The number of common shares potentially issuable to insiders of the Company pursuant to the Private Placement will represent not more than 10% of the Company's currently issued and outstanding common shares on a non-diluted basis.
The Company may pay compensation to agents consisting of a cash finder's fee in the amount of 8% for certain investors.
Pursuant to the terms of certain convertible debentures ("Debentures"), the principal amount of each Debenture together with any accrued and unpaid interest is convertible at the option of the Debenture holder into any common shares and/or warrants of the Company that may be offered for sale by the Company by way of any prospectus or private placement offering made during the term of the Debentures. The Company is seeking a waiver from the Debenture holders, in accordance with the terms of the Debentures, to confirm that no Debenture holders will be participating in this conversion.
The Private Placement and Share Consolidation are subject to the approval of the TSX.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the common shares, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, "U.S. persons," as such term is defined in Regulation S under the U.S. Securities Act, unless an exemption from such registration is available.
About GeneNews
GeneNews is a molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management based on disease-specific biomarkers. The Company has a patented core platform technology, the Sentinel Principle®, which has the power to detect and stage a range of diseases or medical conditions from a simple blood sample. GeneNews is currently applying the Sentinel Principle® in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews' lead product, ColonSentry®, is the world's first blood test to pre-screen and assess an individual's current risk for colorectal cancer. For more information on GeneNews and ColonSentry®, go to www.GeneNews.com or www.ColonSentry.com.
Forward-Looking Statements
This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events including with respect to the Company's ability to raise capital and complete the Private Placement when anticipated and subsequently proceed with the Share Consolidation and the Company's intention to list on the OTCQX International in the first quarter of 2013. The forward-looking statements involve risks and uncertainties including the failure to receive regulatory approvals for the OTCQX International listing, the Share Consolidation or the Private Placement or reach the targeted maximum of the Private Placement, or market reaction to the Share Consolidation and future liquidity of the consolidated shares. Actual events could 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. Subject to applicable law, the Company disclaims any obligation to update these forward-looking statements.