NEW YORK (GenomeWeb News) – Toronto-based GeneNews said that it has issued five-year, 15 percent redeemable convertible secured debentures in the aggregate principal amount of C$1.1 million (US$900,000).
The issuance represents the initial closing of a private placement offering of debentures, under which the firm’s board of directors has authorized the sale of up to C$3.45 million in debentures. The 15 percent annual interest will be paid upon the earlier of maturity, conversion, or redemption of the debentures.
Each initial purchaser of a debenture also receives one warrant for every C$.25 of principal amount of their debenture. Each of the warrants is exercisable into common shares of the company for a period of 36 months following the date of issuance at a price of C$.25 per common share. The firm can accelerate the expiry date of the warrants if its common shares trade with a closing price of greater than C$2 per share for 20 consecutive trading days.
GeneNews’ shares are currently trading at C$.15 on the Toronto Stock Exchange.
“The issuance of these debentures will support our efforts to build on this momentum and prepare for the US commercialization of ColonSentry, planned for the second half of 2009,” Heiner Dreismann, lead director and interim CEO of GeneNews, said in a statement.