THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
TORONTO, Sept. 02, 2016 (GLOBE NEWSWIRE) -- GeneNews Limited (“GeneNews” or the “Company”) (TSX:GEN) today announced that it has accepted subscriptions for a non-brokered private placement offering (“Private Placement”) of 9,794,203 units ("Units"), at a price of $0.16 per Unit. Each Unit is comprised of one common share ("Common Share") and one-quarter of one common share purchase warrant (each whole common share purchase warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one common share (a "Warrant Share") at a price per Warrant Share of CAD $0.50 for a period ending August 15, 2018.
GeneNews intends to use the net proceeds from the offering for commercialization, working capital and general corporate purposes.
Of the approximately 9.8 million Units subscribed to, approximately 5.1 million were from new investors and, as described below, 2.5 million were used to retire CAD $400,000 in debt and 0.6 million were in lieu of making a CAD $100,000 cash payment for services rendered.
In lieu of making a cash payment by the Company, 2,500,000 of the Units issued with the Private Placement were used to make a partial payment of USD $305,344 to the USD $400,000 Demand Note issued by the Company in December 2015 to a major shareholder, who is also a director of the Company. Following the partial payment, the Company’s remaining principal under this December 2015 Demand Note is USD $94,656. The total principal Demand Notes remaining with this major shareholder, who is also a director of the Company is USD $244,656.
In addition, 3 directors of the Company participated in the Private placement, subscribing for 1,944,000 Units for gross proceeds of CAD $311,040, with CAD $100,000, in lieu of making a cash payment of amounts owed to one director for past services.
The participation of the Company’s directors in the Private Placement referenced above constitutes a “related party transaction” pursuant to Multilateral Instrument 61-101 (“MI 61-101”). However, the Private Placement is exempt from the formal valuation requirement and the minority shareholder approval requirement found in MI 61-101 on the basis that neither the fair market value of the Units nor the consideration paid by such directors for Units exceeds 25% of the market capitalization of GeneNews. The Company did not file a material change report more than 21 days in advance of the closing of the Private Placement as the closing date of the Private Placement had not been established at that time and the Company wished to complete the Private Placement in an expeditious manner.
The securities issued pursuant to the Private Placement are subject to the Canadian resale rules, which include a four-month restricted period before the Common Shares and the Warrant Shares may become freely-tradeable.
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 Units, 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 Units and the securities underlying the Units 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 focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. The Company's lead product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews can be found at www.GeneNews.com.
About IDL
Richmond, Virgina-based IDL is a national clinical reference lab specializing in personalized blood-based testing to help find, understand, and address cancer risk in patient populations. IDL’s mission is to provide a comprehensive menu of traditional and advanced clinical evidence-based blood tests that aid in early cancer detection. Currently IDL offers risk assessment blood tests for the three most prevalent cancer types including lung, colon and prostate. IDL is actively in-licensing and commercializing an array of DNA, RNA, protein and autoantibody blood-based cancer diagnostic tests to address early detection of all major types of cancer.
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 the restructuring of its business. These forward-looking statements involve risks and uncertainties and material assumptions - including those related to general business and economic conditions as well as our ability to complete an orderly restructuring of the Company's operations which may include a strategic financing, sale, merger, or other business combination - 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.